Category: General

Realtors Shift Focus To Around Rs 15-20 Lakh Segment

General | By mahendra | 2008 Trackbacks (0) Add comment   

Low cost housing that had almost become a bad word for real estate companies is the latest buzzword in the business now hit by an economic slowdown. Companies, which prided in building luxury villas and houses for higher segments, have suddenly started chanting the mantra of ‘affordable housing.’ “Villas for Rs 55 lakh are out, now-a-days apartments for Rs 20 lakh are in. We are targeting young professionals who may not have been affected by the recession (read: non-IT professional) and want their own home,” says an industry observer. Companies now rushing into the Rs 20-22 lakh range include Janapriya Engineers Syndicate, Puravankara Projects, Golden Gate and Modi Builders among others. Analysts, of course, point out that there is no definition of affordable housing and aver: “It’s just that builders think a home that’s priced around Rs 20 lakh is within the reach of more buyers.” A developer reputed for lowcost housing here explains the rationale for many builders now rushing into this segment.

“When considering an expensive home, a buyer will definitely wait a few months for the prices to drop, but this does not happen with affordable homes, because prices are quite low already,” he says, adding, “the effective EMIs on home loans for this category come around Rs 15000-18000 per month, which many can afford.” Real estate companies also think that cheaper affordable houses will draw not only more but also younger customers. Bhanumurthy PVS, deputy general manager of Golden Gate Properties, says, “by keeping the prices low, we are trying to bring down the average age of the home buyer from 25-35 years to 25-30 years.” The company recently ventured to offer 960 sft 2BHK apartments at Rs 19.9 lakh. Nitish Ranjan, a 26-year old says, “Together, my wife and I earn Rs 80,000 per month. It wasn’t difficult to get a home loan since we could convince the banker that we could pay the EMI,” adding that he is not sure if he would have got a loan for a higher amount that a luxury home requires. Apart from the young, retirees are also drawn to houses at this level.

“Even pensioners can afford these homes, when they come with frills like ‘Book now, pay on possession’, life-time guarantees on title deeds and other lucrative warranties,” says V P Arvind, a retiree who recently booked an apartment at Miyapur. Real estate developers are also buoyed by volumes. “Thinner profitability spread over a larger volume will result in large profits,” explains a builder. India’s housing shortage increased from 19.4 million units in 2004 to 22.4 million in 2005-06 and “there has been a steady 25% year on year growth for the past five years in this segment,” says Ravinder Reddy, CMD of Janapriya Engineers Syndicate, adding, “we have already developed 21,000 such apartments, including 12,000 in the last five years.” This unwavering demand has led to a steady price rise in this segment that has never seen a ‘correction’, not even during the current slowdown. “It’s the Rs 50 lakh plus segment that has the jitters; the Rs 15-20 lakh range is still selling fine,” say observers.

In fact, Puravankara Projects recently announced an investment of Rs 80 billion for affordable housing. It plans to develop 64,500 homes and a built-up area over 59.80 million square feet in major cities, including Hyderabad, in the next five years. City-based players are also increasing projects around Madinaguda, Miyapur, Patancheru, University of Hyderabad and Nagole which are either industry hubs or close to the MMTS and metro zones.

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Realty Blues Hit Foreign Hotel Majors' India Plans

General | By mahendra | 2008 Trackbacks (0) Comments (1)   

International hotel chains like Hilton, Accor, Carlson and Starwood are concerned about the viability of their India plans. Many of these hotel chains have tied up with real estate developers like DLF, Emaar MGF, Unitech and Parsvanath to set up five-star hotels. However, fund-starved developers, who are trying to raise money for their core activities like residential and commercial property projects, are understood to have put the hotel ventures on the back burner. A drop in occupancy and room rates, inflow of business travellers and tourists to India have also raised concerns on the viability of these projects, industry sources say.“Out of a total of 1.14 lakh proposed room supply, only 58% or about 66,000 rooms, will actually be developed over the next few years.

So, we feel many announced projects may not take off as planned,” said Manav Thadani, MD, HVS International, a hospitality consulting firm. “Now, debt raising is a difficult process,” says Homi Aibara of Aibara Consultants. Lemon Tree Hotels CMD Petu Keswani said: “Only developer-led hotel projects will face a problem as their priorities are different.” However, when contacted by ET, real estate developers insisted that projects were on track.According to the latest HVS report, cities like Bangalore, Chennai, Delhi-NCR, Hyderabad, Mumbai and Pune, where massive new room capacities are planned with real estate operators, are seeing trouble. In Bangalore not more than 60% of the new capacity is likely to come up. The same goes with Chennai, Delhi, Hyderabad, Mumbai and Pune. However, cities like Agra, Hyderabad, Jaipur and Mumbai saw a negative growth in room supply in 2007-08 as compared to 2006-07.The last few months have seen a demand-supply mismatch in tier II cities like Bangalore, Pune, Hyderabad and Chennai. Room rates too have fallen steeply in these markets, making it unviable for real estate developers to go ahead with the planned hotel projects.

This is happening at a time when there is a severe shortage of branded hotel rooms. Unitech MD Sanjay Chandra said: “We have management tie-up with the Marriott Group for three projects, and one of them will be commissioned in January. Other two projects are very much on.” Recent media reports had suggested that DLF’s hotel JV with Hilton had hit a rough patch. However, DLF clarified to the stock exchanges that “DLF’s JV with Hilton is on a firm footing and all plans for the development of hotels stand as originally envisaged”. However, industry sources said DLF has put the hotel project on the back burner for at least a year. An Emaar-MGF spokesperson said there were no change in the hotel plans of the real estate firm and its tie-up with Accor. Says Uttam Dave, president and CEO, Interglobe Hotels and head of development, Accor Hotels India (Accor has tied up with Emaar MGF to launch Formule 1, a budget hotel): “Most of our projects are on track, and so far at least none of our projects have been either cancelled or put on hold, and this includes both managed and investment projects. There have been some delays in the actual development and commissioning of projects, and this has been on account of obtaining development approvals from municipal authorities and not due to real estate values.”

Hyderabad's Richie Rich Beat The Meltdown

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Despite an economic slowdown, the super rich in Hyderabad are buying homes as expensive as Rs 15 crore.In the city of the Nizams, a privileged few live life kingsize. So despite an economic slowdown, job layoffs and a crisis of confidence, ultra luxury homes that cost between Rs 12 and 15 crore each, are finding ready takers. Among the buyers are not just industrialists and IT czars but many traditionally rich people as well like a tobacco farmer from coastal Andhra and another person who runs a chain of educational institutions."Everyone gets taken care of in the boom period. So during the boom period, these people actually feel left out.

They realise that the period of slowdown of economic activity is when they are kings. So they get all the attention. And they are really liking it," said Amit Bagaria, a real estate consultant. The first of such super luxury projects coming up in Hyderabad is an exclusive gated community of 31 homes, each with a built-up area of 11,800 square feet.Its USP -- it will have no roads and it is the first of its kind car-free locality."The cars have been put below the podium level and on the podium level is a series of homes that do not have fences. So it is a beautiful community space," said Andrew Maynard, an architect.Experts say even though the real estate sector is hit badly by the economic slowdown, the ultra premium segment is bucking the trend.

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Slowdown In Real Estate Business Due To Hike In Steel Price

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As the dark clouds of an economic slowdown gather over the world, prices of construction materials have started to slide in the city. A few months earlier, prices of key commodities like sand, bricks, steel and wood had reached dizzy heights, now they are in a free fall. Sales of all these products have also come down from 25 to 40 per cent. However, the cost and sale of cement cont inues to remain stable even after mounting demand from contractors involved in construction of various irrigation projects across the State. Analysts attribute this to slowdown in real estate business in the State capital as well as in Vijayawada, Tirupati and Visakhapatnam. The meltdown has indeed slowed the construction activity with several Real estate developers hesitating to take up new ventures.

While some of them are only focusing on completing the ongoing projects, others are in a quandary over launching new projects. Steel erodes For instance, the cost of steel had touched Rs.40,000 to Rs.50,000 per tonne a few months ago, while sand and bricks zoomed up to Rs.6,000 and Rs.26,000 per lorry load respectively. These were all-time highs and gave jitters to middle-class families in accomplishing their dream of owning a house. The prices and sales of these products have now tumbled drastically. At present, the price of steel range from Rs.35,000 to Rs.37,000 per tonne, and sand and bricks stood at Rs.5,000 and Rs.18,000 per lorry load respectively. “Steep rise in fuel prices coupled with drop in sales led to the decrease in prices of sand and bricks”, said a supplier Vinay Kumar Yadav in Secunderabad. At least three lorry loads of sand used to be delivered everyday and now it is hardly one lorry load for every three days. “It’s a double blow for us with prices and sales decreasing”, he lamented. With sales of timber also coming down almost by 50 per cent, traders are requesting the government to reduce 12.5 sales tax to four per cent.

“As wood is most commonly used product, we appeal to the government to reduce sales tax to overcome losses”, said Sridhar Malani of Padma Timber Agencies in Bowenpally. Cement prices, however, remain stable. In Hyderabad, the retail premium brand cement range from Rs.230 to Rs.240 per bag and Rs.215 to Rs.222 per bag in Vijayawada. “Cost of the cement did not increase because there has been no substantial rise in its prices in the international market”, said Ramesh Chandro, Managing Director of Coramandel Cements Ltd. Another factor for present ‘precarious’ situation in real estate business is increasing demand for separate Statehood for Telangana region. As the leaders of all the main political parties declared support for Telangana, developers are now adopting a ‘wait and watch’ policy until next general elections. Some of them are not coming forward to develop independent houses into apartments with 60:40 per cent profit in even well developed colonies like East and West Marredpally, Sindhi Colony Begumpet and Sainikpuri.

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RAKIA Signs MoU With AP Govt To Develop Hyderabad Economic City

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Ras Al Khaimah Investment Authority (RAKIA), the government body responsible for the socioeconomic growth of the emirate, has announced that it has recently signed a memorandum of understanding (MoU) with the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) to establish the US$ 5 billion Hyderabad Economic City, an integrated financial hub and health care city.

The MoU was signed by Wahid Attalla, Member of the Board, Rakeen, the real estate development arm of Ras Al Khaimah Investment Authority (RAKIA), and APIIC Chairman and Managing Director B P Acharya, in the presence of Andhra Pradesh Chief Minister Y S Rajasekhara Reddy. The financial component of the mega project will include infrastructure facilities to support a full range of financial services, while the state-of-the-art health care city will provide complete facilities for clinical and non-clinical services. Hyderabad Economic City is part of several large-scale satellite townships being developed by RAKIA and master developer Rakeen in several key cities across India.

Commenting on the MoU, Dr Khater Massaad, CEO, RAKIA said: "The partnership with the Andhra Pradesh government for the development of the Hyderabad Economic City is in line with RAKIA's strategy to fortify its portfolio of global investments. India's fast-growing economy has opened a wide range of business opportunities, and we intend to build on this momentum to further expand our activities in the country and across the region. Furthermore, we believe that this new development will strongly support India's continued economic progress and open more opportunities for growth and prosperity.

" Hyderabad Economic City's financial sector will provide essential infrastructure to support back-office operations for banking, insurance and asset management companies. It will also provide key facilities to host corporate centres for financial services, product markets, capital market and trading operations, IT services, business processing operations, plug-and-play intelligent buildings and IT parks. The integrated health care component of the mega project will incorporate world-class hospitals, medical colleges, research services for clinical trials, a comprehensive drug delivery system, and facilities for stem cell research and genetic research, among others.

RAKIA is also developing several other townships across the country through RAKINDO, RAKIA's joint venture company in India. Over 3,000 acres of land has been earmarked for various projects in Coimbatore, Chennai, Kumarakom, Hosur and Cochin, each with a projected cost of US$ 2 billion.

AP Gets Re 1 Trillion Domestic Investment

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Andhra Pradesh and West Bengal have emerged as the country’s top two investment destinations for domestic private sector firms. The southern state is the only one to have attracted capital expansion (capex) plan commitments in excess of Rs 1 trillion in the first half of 2008.

Andhra Pradesh which attracted Rs 1,08,559 crore investment is followed by West Bengal with over Rs 93,000 crore during the same period, according to a survey by industry chamber Assocham. The figures are for the period before the Tatas pulled out their ambitious Rs 1,500-crore Nano car project from the state.

In its study titled ’Regional Investment Ann-ouncements’, Assocham said the eastern region came on the top for attracting private sector investment announcements, followed by southern and western regions. “One-time vibrant northern India for investors has slipped to a poor position number four in terms of luring investments by the private players,” it said.

The central region, comprising Madhya Pradesh and Chhattisgarh, was ranked last with the minimum share of 8.87 per cent in the total investment announcements. The western region ranked third and Rajasthan (Rs 80,776 crore) outpaced Maharashtra (Rs 65,632 crore). Northern states attracted investments to the tune of Rs 123,905 crore. Haryana and the NCR grabbed Rs 50,595 crore and Rs 38,237 crore.

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HMDA To Sell 82 More Plots In Hyderabad

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Unperturbed by the poor response to its earlier auction drives, the Hyderabad Metropolitan Development Authority is preparing for a fresh round of auctions. This time the HMDA has decided to auction a few more sites along with those which were not bought earlier. In September, the HMDA put up as many as 99 plots for e-auction of which tenders only 17 were finalised.

Now, HMDA is planning to sell 82 plots, including some new plots in hyderabad. The new sites have been added to the list as a special attraction to woo builders and developers who have not been evincing keen interest in investing in real estate sector off late. Plots up for grabs are located at Nandgiri Hills layout, Asifnagar new layout, Huda Techno Enclave, Madhapur (SectorI), Ramchandrapuram (chandanagar), Tellapur Residential Complex, Nallagandla Residential Complex, Vansthalipuram Residential Complex, Miyapur Residential Complex, Asifnagar(old) Residential complex and Mushk Mahal Residential Complex.

“This time we are adding additional infrastructure features to the land area and auctioning those plots so that people can apply tenders in large numbers. Earlier, plots were auctioned without any infrastructure specifications which yielded a very poor response. The formalities of on-line auctioning will be completed in two days before opening on-line auction in the coming week.

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Townships Have No Land

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Twenty-two satellite townships planned to be set up around the Outer Ring Road have remained on paper three years after the erstwhile Hyderabad Urban Development Authority announced them. The reasons are said to be many: Slump in the real estate market; problems in land acquisition and widespread agitations by farmers and political parties.Efforts by the government to rope in private parties and get the townships started in the public private partnership mode also fell through, with real estate giants keeping away. The HMDA, the successor of Huda, tried its best to raise money by auctioning land but builders and developers stayed away.

The townships were planned at Medchal, Goudavelli, Dommara Pochampally, Bowrampet, Aliyapur, Sultanpur, Khardanur, Paatighanpur, Edulanagulapalli, Kollur, Balapur, Nadargul, Thorrur, Munaganuru, Kuntluru, Korremul, Rampalli, Cheryala, Dharmaram and Shamirpet. With land owners, particularly farmers, objecting to land acquisition by the HMDA, the officials announced a change in some sites. The new sites are at Mankhal, Adibatla, Raviryal, Srinagar, Turka-yamjal, Injapur, Tellapur and Gacchibowli where the government has acquired about 3,000 acres of land.

Work was supposed to start on these projects within six months after they were announced but not a brick has been set till date. The government announced that it will come up with a township policy which would propose handsome compensation to land owners, particularly farmers, from the benefits to be accrued out of township projects."The government is sitting on the policy. Unless the government announces the policy, townships cannot be started," sources said. Mr Sridhar Chitturi, officer on special duty (OSD), on the Outer Ring Road, HMDA, told this correspondent that it would be feasible to start work on townships after the new policy is announced. According to him, the policy is likely to offer land owners 50 per cent share in the benefits accruing from townships.

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Reliance Infra Plans To Raise Funds In Phases

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In a tight credit market where real estate developers are scurrying for funds to launch their projects on time, Reliance Infrastructure Ltd plans to raise funds in multiple rounds for its 100-storeyed trade tower and business district project on the outskirts of Hyderabad. A new player in real estate, Reliance Infrastructure, part of the Reliance-Anil Dhirubhai Ambani Group, needs about Rs4,000 crore in the first phase to pull off a large part of the project, which will be executed at a cumulative cost of Rs8,000 crore in the next three-five years.“We will have to raise the money in two-three phases from banks, though we intend to develop the project in one go,” said a senior official of Reliance Infrastructure in charge of the Hyderabad project, who is not authorized to speak to the press. Last November, Reliance Infra, which is a two-thirds partner in the project that is to be implemented through a special purpose vehicle (SPV), won the bid. The other stakeholders in the venture are Bangalore-based Sobha Developers Ltd (technical partners) and Andhra Pradesh Industrial Development Corp.

with 23% and 11% stake, respectively. The project is the business group’s first venture into the real estate, with the second being a mixed-use project planned on about 220 acres, which it got by winning the contract to build a metro rail line between the New Delhi railway station and the international airport. Considering the current market downturn, the SPV has decided to lease, rather than sell, the tower, which will be the central attraction in the 77-acre project. “Leasing out space is much more flexible when property prices are on a downward slope and you don’t relinquish ownership rights. However, we will lease out the space in phases in the next few years,” said the same official. With capital values per square foot touching Rs6,000, building residences in the tower has been ruled out. Hospitality and commercial office space will be built instead. Construction costs will also double from the 60th floor upwards. These will be resistant to high wind velocity. Superior quality of steel is required to construct such buildings.

However, 10 months after winning the bid, construction is yet to start and the project is still at the planning stage finalizing the design and appointing project consultants. There is no hint at when construction will take off. An August office space report by Cushman and Wakefield Inc., a property advisory firm, said Hyderabad witnessed fresh office space supply of 755,000 sq. ft in the second quarter, about 12.5% of the expected 6 million sq. ft supply this year. Deferred pre-commitments, primarily attributed to supply overleaping absorption during the quarter, indicated a situation of oversupply. Though vacancy rates in the city have been low, there are areas with large unleased concentration of grade B stock of office space, the report said. Pawan Swamy, managing director (markets) of Jones Lang LaSalle Meghraj, a property consultancy firm, said, “Hyderabad will be over-built in the next six-eight months with a lot of fresh supply coming in. Though leasing offers better returns, selling is easier in the current market. Only developers who can hold on to their properties can afford to lease out space, but the good part is that the value of a property is higher after you lease it.” “It is a challenge to put up 4 million sq. ft of space for lease in the current market situation because of a demand-supply disbalance. Hyderabad is also going to face a problem of over-supply soon, with a lot of development happening,” said Santosh Martin, chief executive officer of Bangalore-based Divyasree Developers Pvt. Ltd, which is primarily into office space and has a hospitality venture coming up in Hyderabad.

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HMDA Needs Time For Zonal Offices

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The Hyderabad Metropolitan Development Authority’s proposal to set up zonal offices at different parts of the city to provide better access to the citizens will take more time to take shape. The plan includes five zonal offices in Hyderabad for easy access to the HMDA. The offices have been proposed to be set up at Ghatkeshar, Kompally, Kokapet and Shamshabad. One is yet to be decided, though the HMDA officials said it may be set up at Narshingi. “We have recently visited Kompally and Ghatkeshar. The buildings are still under construction and it may take more than a week to set up the centres,” the officials added The offices will include various departments like planning, engineering, accounts and estate. A committee will soon visit Chevella, Sangareddy, Bhuvanagiri, Ibrahimpatnam, Pochampally, Narsapur, Shamirpet, Keesara, Maheshwaram and Kothur to inspect the buildings and finalise them for the proposed offices.

The expanded jurisdiction under the HMDA include 16 mandals of Hyderabad, 10 of Medak district, 22 of Ranga Reddy district, two of Mahabubnagar and four mandals of Nalgonda district. Meanwhile, the HMDA office at Madhapur could take another two years to be completed. Rs 50 crore has been sanctioned for the complex. It will come up near the National Academy of Construction. The design of the offices will be finalised in two weeks, said the HMDA chief engineer, Mr Vivek Deshmukh.

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House That: Builders Plan SRZ

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Planning experts and real estate majors say that the state government should encourage Special Residential Zones on the lines of Special Economic Zones in Hyderabad outskirts. They also urged the government to develop social infrastructure in the suburbs to decongest the core city. The Confederation of Real Estate Developers Association of India (CREDAI) recently suggested that SRZs would solve the housing problem in urban areas and would bring real estate within the reach of all and not just the privileged.

SRZs may be given special incentives and tax breaks like SEZs and this would encourage real estate developers to foray into the segment of affordable housing in a big way. "Rich people are able to purchase homes in cities and the government is taking care of the poor through Indiramma houses," said Mr Ramakant Dande, director of SLV Estates. "Middle class sections are totally neglected." He urged the Chief Minister, Dr Y.S. Rajasekhar Reddy to look into the SRZ proposal, to solve this problem.

"It is high time the government improved social infrastructure such as hospitals and educational institutes in the outskirts where construction activities are taking place in a big way," said Mr G. Yoganand, secretary of the AP Builders Forum. The GHMC commissioner, Mr S.P. Singh, told this correspondent that it would take at least two years for the improvement of amenities in the outskirts on par with the core city. "We are giving top priority for developing a drainage system with Rs 1,500 crore," he said.

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Shamirpet Road India’S Longest

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The state government on Thursday approved the construction of a 30-km elevated expressway from Parade Grounds to Shamirpet at a cost of Rs 500 crore. The construction of the elevated expressway will be the part of the conversion of the Rajiv Rahadari (Hyderabad to Karimnagar) two-lane highway into a four-lane road. This will be one of the longest elevated expressways in the country. At present, the 12-km P.V. Narasimha Rao Expressway connecting the city with the Rajiv Gandhi International Airport road is the longest such construction. The Chief Minister, Dr Y.S. Rajasekhar Reddy, who approved the expressway project, also cleared the construction of three four-lane roads after discussions with the Roads and Buildings Minister, Mr T. Jeevan Reddy and officials.

Apart from the Rajiv Rahadari which would be made four-lane at a cost of Rs 1,085 crore, Dr Reddy approved the conversion of Potullapattu-Naidupet Road into four-lane at Rs 450 crore and Narkatpally to Addanki road at Rs 910 crore. The government also decided collect toll tax only from commercial vehicles henceforth and allow vehicles belonging to medical services, agriculture and local residents to move freely. Mr Jeevan Reddy said the Chief Minister directed officials to prepare a detailed project report of the expressway and start works at the earliest. The minister added that roads which were damaged in recent heavy rains and floods would be repaired on war footing.

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Real Estate Firms Shun Leasing, Prefer To Sell

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Reputed real estate developers in Mumbai and many parts of the country have started selling their commercial real estate which includes office, retail and hotels, rather than leasing them out. The developers are ready to sell properties at a rate which is seen attractive by the buyers today. The appetite is to purchase, build and sell off projects, with the prospect of gaining immediate returns, according to experts. Raheja Corporation, which has huge office spaces in multiple projects spread across Pune, Hyderabad and Navi Mumbai, have started selling their office spaces. Not only that, various other subsidiaries of the Raheja Group have actually started the process of selling their office spaces across the country, including Mumbai, according to a company source.

Indiabulls Real Estate has recently started selling their office spaces based in Tulsi Pipe Road, Jupiter Mills and Elphinstone Mills. According to sources, “Indiabulls Center, which was leasing out office spaces, has now started the process of selling the office space completely.” Ashok Piramal group’s realty company Peninsula Land Ltd (PLL), which is developing commercial buildings in Ashok Gardens – a premium residential project comprising 2-, 3-, 4- and 5-bhk (bedroom, hall, kitchen) apartments located at upper Parel in Mumbai - is selling off the commercial building instead of leasing the property. Peninsula Land, which had sold off 5 lakh sq ft of Dawn Mills, is now in the process of selling complete 19 lakh sq ft. Realty major, DLF too is in the process of selling a part of its big commercial establishments instead of leasing. Competitor, Hiranandani Constructions is understood to have not entered into a single land deal since the past few months.

Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj, has cited various reasons behind real estate developers wanting to sell properties instead of leasing them. He said, “There are owner occupiers wanting to take the benefit increasingly of the properties on lease and wanting to buy. The lease rates are still high while there has been softening of the sale price and the builders need some cash flow.” When contacted, Sanjay Dutt, MD, Cushman & Wakefield said, “Today, real estate developers are willing to enter only those projects which can be purchased, built and sold off quickly and make money. Developers have started believing in futuristic games. Real estate market is here to continue very strongly in the long term. Real estate developers should also ensure to take steps.

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Maytas Metro Signs Concession Agreement With Govt Of AP

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Maytas Metro Limited, the Special Project Vehicle floated by Maytas Infra for Hyderabad Metro project, represented by Mr. B Teja Raju, Vice Chairman, Maytas Infra, today signed the Concession Agreement with Hyderabad Metro Rail Limited, Government of Andhra Pradesh represented by CVSK Sarma. The GoAP has awarded the Concession to the Consortium for undertaking the development of Hyderabad Metro Rail Project (MRTS) on Design, Build, Finance, Operate and Transfer (DBFOT) basis in the presence of Honourable Chief Minister of Andhra Pradesh, Dr Y S Rajasekhara Reddy. Maytas Infra Limited would be executing this project in a Consortium comprising Navabharat Ventures Limited, Ital Thai Development Public Company Limited and Infrastructure Leasing and Financial Services Limited (‘NMII Consortium’).

The project cost as per Government of AP (GoAP) estimate is around Rs. 12,000 crores and will comprise 3 lines totaling 71km – Line 1: Miyapur to L.B. Nagar, approx length being 30 Km which will have 28 stations along the route; Line 2: Jubiliee Bus Station to Falaknuma, approx length of 15 Km with 15 stations along the route; Line 3: Nagole to Shilparamam, approx length being 26 Km with 23 stations. Additionally, GoAP is also providing development rights to the Consortium for 18.5 million sq. ft. Commenting on the development, Mr. Mohan Gurunath, CEO, Maytas Infra Assets Limited said, “We are very proud to be working on one of the biggest projects in the country.

Hyderabad Metro will be a world-class project, and will have a widespread impact on the city’s landscape and business scenario. Now with the Concession Agreement being signed, Maytas Infra along with the Consortium partners will be gearing up to execute the project on schedule and with high standards of safety and environmental norms.” The Consortium will be paying an amount to GoAP, which has a net present value equal to Rs. 1240 crores over a 34 year period – based on a discount rate used by GoAP of 13.5%. The Concession Agreement between GoAP and the Consortium is based on an initial Concession Period of 35 years (incl. construction period), and a possible extension in Concession Period of 25 years. As per the draft Concession Agreement, the project has to be constructed over a five and a half year development period. GoAP would subscribe to equity of Rs.250 crores, while various financing options are looked at for the project.

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GHMC Tax Target: Rs 1,200 Crore

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The Greater Hyderabad Municipal Corporation has set the process in motion to collect a whopping Rs 1,200 crore from building owners and citizens in the current financial year. This will be done by improving tax collection, revising the lease and rental amounts of its property, bring unassessed property under tax net and ensure maximum collection of tax from under-assessed property and other sources. The GHMC commissioner, Mr S.P. Singh, said the corporation has fixed the targets for each of the sections. He added that the revenue will be increased substantially without effecting any hike in the existing tax structure.

The GHMC chief wants to collect Rs 750 crore towards property tax . A large number of new residential buildings have come up in the corporation limits which can earn more revenue for the corporation. "The GHMC can take up better infrastructure facilities for the convenience of citizens with increased revenue," Mr Singh said. Officials have been asked to form special teams and identify top tax defaulters and find the tax evaders.

As the main revenue of the corporation is from the property tax, the additional commissioner (finance), Mr Ramesh Babu, said there were 10.46 lakh tax payers in March 2008 which increased to 10.83 lakh in August 2008. In the previous financial year, Rs 322 crore was collected under property tax. Collection of advertisement tax, revenue on rents and leases on corporation estates and real estate property, entertainment and building permission fee and trade licenses should touch at least Rs 30 crore during the current financial year against Rs 6.62 crore in the last fiscal. "There is every possibility for a substantial increase in the advertisement revenue," the GHMC commissioner said. He added that the corporation had fixed a target of Rs 70 crore against Rs 14.58 crore collected last year. The corporation also plans to collect Rs 250 crore for building permission fee compared to Rs 118 crore collected last year. Besides, the GHMA plans to raise Rs 50 crore from trade licenses against Rs 9.89 crore collected last year.

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