Maytas Customers Caught In A Bind

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

When customers of Maytas Hill County, the flagship real estate project of Ramalinga Raju promoted Maytas Properties, met with the fund-strapped firm's management including Rama Raju Jr last month, they were assured that work on the project that had stopped over the last few months would commence in April. The assurance has now fallen flat with not an inch of movement at the project site in Bachupally. But now it is not only the customers but even banks with considerable exposure in this housing-SEZ project that are worried about the crores blocked in this venture.

The high-end Rs 710-crore Hill County township that comprises apartments and villas ranging from Rs 40 lakh to Rs 3.5 crore was the only project kept alive by Maytas Properties after Raju's confession on January 7. Several customers have already made 90 per cent of the payment so far. The down payment amount notwithstanding, all customers asked their banks to hold back funds to Maytas until work begins at the site again. There are an estimated 1,000 customers of the Hill County project and the apartments were to be handed over to them by October and a second set in March. But these promises were made prior to the devastating scam Raju confessed to.

Now, the liquidity crunch at Maytas Properties is severe and observers say it is unlikely that the  company would be able to manage funds as things stand now. The government appointed Maytas Properties director, Ved Jain, says that liquidity remains its most serious problem. "We are in talks with both lenders and vendors. Arrangements are being made so that things start moving on,'' he said, adding that the board was working on it (resolving the problem). According to sources, Maytas Properties has contracted the work to one Prasad & Co. and representatives of this contractual firm have met owners of villas seeking money to complete the remaining work against a credit note. "The idea faced a lot of resistance initially. But owners of some villas where just about 10 per cent of the work is remaining have somewhat agreed to this deal. Obviously, they do not think they will get this money back and the credit note would be of no use,'' said the owner of an apartment, adding that owners were realising it was better not to depend on the Maytas management. Customers say they do not know which wa



Decline In Office Rentals Continues

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Office markets across the country continued to show a downward trend as most markets recorded negative growth in rental values after supply across eight major cities in India outstripped absorption by 45 per cent.Mumbai, the financial capital of India, witnessed the sharpest decline in rental values in the first quarter of 2009 while the National Capital Region witnessed significant decline in rental values in central business district in the first quarter of 2009, according to Cushman & Wakefield’s latest office market report.

Micro markets of Mumbai including those of Lower Parel and Worli recorded drops of 37 per cent and 29 per cent respectively from a three per cent and 13 per cent drop respectively in the preceding three months. Rentals in central business district of Nariman Point fell by 13 per cent in the first quarter of this year compared to 20 per cent in the previous quarter. Rentals in NCR’s CBD, mainly Connaught Place dropped by 17 per cent, the highest in the last 3 years, the property consultant said in the report. The drop comes after a 14 per cent decline in the previous quarter. Bangalore rentals fell in the manageable range of three to seven per cent in key markets.

“The first quarter of the year can be termed as the weakest so far in terms of commercial office take up across major cities in India as compared to a similar period for the last 2/3 years,’’ said Kaustuv Roy, Executive Director, Cushman & Wakefield. Bangalore witnessed the highest new office space supply of approximately 2.81 million square feet and also the highest demand of 1.29 million square feet. NCR and Mumbai witnessed fresh office space supply of 2.6 million square feet and 2.47 million square feet respectively and absorption of 0.8 square feet and 0.9 square feet respectively. Chennai, which had been reeling under over supply pressures saw moderate supply 0.98 square feet and absorption of 0.9 square feet. Hyderabad and Ahmedabad saw no addition to the current stock.

Vacancy levels had remained largely consistent to last quarter with most IT/ITeS destinations witnessing high vacancy levels. Chennai’s peripheral location (Rajiv Gandhi Salai) recorded the highest vacancy of approximately 42% while the city average was at approximately 18%. The lowest vacancy was recorded in Ahmedabad at five to six percent due to limited leasing activities and no new supply in the market.Mumbai recorded a vacancy of approximately 11-12 per cent while vacancy levels in NCR stayed at a manageable 8 -10 per cent. Bangalore, Pune and Kolkata remained at an average of 16 -18 per cent. Hyderabad saw some slackness in activities and therefore recorded a reasonably high vacancy of 23% of which prime suburban region comprising of Banjara Hills and Jubilee Hills recorded a higher 35% vacancy.

"Re- negotiations and migration to more cost effective locations has been the norm for the cautiously advancing corporate sector. However going forward we are likely to see supply contraction,"said Roy."Acutely affected areas like IT/ITES and certain corporate office destinations will see deferment of projects to bridge the gap between supply and demand. While rental values are expected to be under pressure in short to medium term, going forward lower rentals are likely to have a more positive impact on the absorption numbers," he added.



Hyderabad Real Estate Prices Down By 40 Percent

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

The recession has taken its toll on Hyderabad Real Estate market where land prices and apartment prices are down by 40 percent. The job losses specially in IT/BPO sector and speculations over more job cuts lead to this down trend. Though this is good times for new buyers, it is really going tough for builders and resellers. Builders are coming forward and willing to negotiate prices with the customers. And some builders are even advertising with ‘buy one and get one’ tag in order to dispose their properties as early as possible.The residential land prices near Manikonda, Gachibowli and Kokapeta which were going for Rs.20,000 - Rs.25,000 per Sq.Yard before are now Rs.12,000 - Rs.15,000 per Sq.Yard.

Most of the apartments which were sold for Rs.3500 per Sq. Ft before are now going for Rs.2000 per Sq. Ft. or even less. A two-bed room flat in Nizampet road, Kukatpally is costing around Rs. 20 lac now. And the prices for independent house/villas also fallen down by more than 35%, an Independent house of 2700 Sq.Ft area in locations close (< 5Km) to Hitech city is costing now around Rs.50 lac. And also builders are more open and flexible now with respect to instalment payments.Reserve Bank of India (RBI) today announced that it is further cutting repo, reverse repo rates by 0.25 percent. A cut in reverse repo will have a direct impact on home loans that will become cheaper and this certainly brings good cheer amongst consumers.

For more updates http://www.maaproperties.com



Hyderabad Now A Hotspot For Infra Investments

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

Southern metros led by Bangalore, Hyderabad and Chennai have become the most favoured destinations for attracting infrastructure investments from corporates ahead of Mumbai , Delhi and Kolkata, an Assocham study said.The report "Indian Metros : pulling infrastructure investment" pointed out that the three southern capitals accounted for 70% of total private investments in infrastructure projects among six metros in India. Kolkata, Mumbai and Delhi accounted for the remaining 30%. As per the Assocham study, the private sector has bet Rs 33,161 crore on the southern metros compared to Rs 14,240 crore in other tier-I cities.

The southern metropolitan cities are less urbanized with a combined urban population of about 16 million compared to Mumbai (18 million), Delhi (18.7 million) and Kolkata (15 million), the Assocham study said. Assocham president Sajjan Jindal said: "Southern cities are attracting private attention towards infrastructure projects primarily due to better state policies, availability of talent due to engineering and business institutes , high literacy rates and rising per capita income ." The study said that even when the real estate sector across the country is facing problems, investments in realty projects have acquired highest share in overall infrastructure investments in the southern tier I cities.

Around 12 projects were announced by the private sector during last six months amounting to Rs 12,990 crore. Bangalore had a maximum of six realty projects while Hyderabad and Chennai had five and one respectively . The second highest investments are lined up for SEZs. As much as Rs 12,150 crore would be spent in developing five SEZs by the corporate sector in southern metropolitan cities.



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