Lanco To Move Out Of Real Estate

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

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.

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.

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...

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