 |
|
| 1. | | 2. | | 3. | | 4. | | 5. | | 6. | | 7. | | 8. | | 9. | | 10. |
| [03 Aug 09] :: Rs 13 cr Decline in Sobha Developers Q1 Profit |
Realty major Sobha Developers has seen its net profit nosedive for the first quarter ended June 30, 2009, at Rs 12.7 crore, against Rs 50.5 crore for the same period in FY09. Income from operations stood at Rs 177.1 crore (Rs 346.8 crore). Sobha, which bore the aftershocks of the global economic slowdown, has seen a revival in fortunes in the first quarter compared with the fourth quarter ended March 31, 2009. Net profit in the first quarter increased 76.4% to Rs 12.7 crore from the fourth quarter, while total income was sequentially up 15.6% at Rs 178.6 crore.
“The real estate industry has seen clear signals of revival in demand during the first quarter. With the Indian economy growing at 6-7% and expected to achieve a higher growth rate in the next couple of years, real estate infrastructure industries are poised to play a more significant role. It will be a domestic-driven industry, growing at a much faster pace,” a company filing made with the bourses added. On its part, Sobha Developers has realigned debt, brought on board a private equity partner, besides successfully completing a qualified institutional placement (QIP) raising Rs 500 crore.
These steps, the filing goes on to say, have added the much-needed comfort in operations and have helped the company focus on progress in various projects across key cities, including Bangalore. The company intends to focus on debt reduction and cost optimisation and believes it is well-equipped to capitalise on the early revival in the Indian economy. As of June 30, 2009, Sobha Developers has completed 50 residential / commercial in-house projects and 146 contractual projects covering 31.9 million sq ft of built-up space.
Sobha Developers has currently 31 residential / commercial ongoing projects totalling 9.2 million sq ft. The company has contractual projects in several states like Karnataka, Kerala, Andhra Pradesh, Orissa, Tamil Nadu, Punjab, Haryana, the NCR, besides Maharashtra. On the bourses, the Sobha scrip was down 1.2% at Rs 219, with 3.5 lakh shares changing hands on BSE. |
| [03 Aug 09] :: 43% Drop in Foreign Direct Investment |
India received $2.2 billion foreign direct investments (FDI) in May this year, department of industrial policy & promotion (DIPP) secretary Ajay Shankar said. There is a 43% drop in the FDI inflow in May 2009 compared to $3.9 billion received in the same month of the previous year. The inflow of foreign capital into the country will improve now, as the country’s industrial output in June looks “promising,” Mr Shankar said on the sidelines of a seminar by Confederation of Indian Industry (CII). “We think, with liquidity improving and confidence in the economy rising, these (FDI) numbers should pick up,” he said. The government had scaled down the FDI target by $5 billion from $35 billion last fiscal.
In April 2009, FDI inflow had fallen by 38% to $2.34 billion from $3.74 billion a year ago. In the calendar year 2009 up to April, FDI inflow into the country slipped by nearly 46% from the year-ago period to $8.5 billion, as per the latest figures released by DIPP. Inflow of foreign capital dried up as foreign investors were reluctant to put their money in risky emerging markets but India’s 6.7% growth in 2008-09 when developed countries struggled with recession is expected to bring foreign investors back. In the first six months of 2008-09, FDI inflow was $27.3 billion compared to $24.5 billion in 2007-08. Cumulative FDI inflow from April 2000 to March 2009 was about $90 billion, as per DIPP data.
The department collects data on foreign investment from the RBI and releases monthly updates. Mauritius, with which India has a double taxation avoidance agreement, is the largest contributor of FDI into India, followed by Singapore and the USA. Services sector attracts the largest share of foreign capital, followed by computer software and hardware, telecommuniation, housing and real estate. Mr Shankar expressed confidence that there would be “continuous improvement” in industrial output. Official data released earlier this month had shown industrial output rising for the second straight month in May, fueling hopes of faster economic growth. Led by the consumer durable sector, the Index of Industrial Production (IIP) rose by 2.7%, its biggest increase since October 2008. |
| [03 Aug 09] :: IREO to pump in US $ billion committed capital in its Real Estate Projects |
IREO, the first and the largest global investment fund dedicated to the Indian real estate sector, today announced its foray into real estate development with a portfolio of 13 projects located in prime locations around the country.
Speaking to the media on this occasion, Mr. Anurag Bhargava, Chairman, said “Our vision is to be the most respected real estate and infrastructure developer in India by consistently delivering superior value to our customers, investors, business associates and employees in all our endeavors”.
Mr. Bhargava further added that “as a global investment fund, IREO has been present in India since 2003 and has steadily built a portfolio of high quality executable projects in prime locations across 3,000 acres of owned land with a national footprint. IREO has now evolved as a fully integrated real estate organization that is both the financier and the developer of its projects”.
IREO’s Vice Chairman and Managing Director Mr. Lalit Goyal, added “We are in strong financial condition and have cash to invest. Having already invested US$1.5 billion, we still have another US$500 million available in cash for further investments in our projects”.
Mr. Goyal further stated that “our team consists of internationally experienced and accomplished expatriate and Indian professionals from various backgrounds to lead our initiatives and to deliver best in class products and services to our customers”.
“We have already commenced construction and leasing of a 5 million square feet IT SEZ and the sale and construction on 3 million square feet of housing. We are poised to launch a number of projects that will entail development of more than 8 million square feet of housing in the coming 12 months”.
Mr. Steven Wisch, Partner, informed the media that “IREO’s investor base consists of blue chip globally renowned and respected financial institutions such as: JPMorgan Chase, TPG – Axon, Citadel Investment Group, sovereign wealth funds, endowments such as Stanford University, University of Notre Dame and University of Rochester, major global real estate developers like Stephen Ross, the Taubman Family and the Reichmann Family and some very high net worth individuals. The blue chip nature of our investor base is proof of the immense faith our investors have in India and also their confidence in IREO’s capabilities to manage the funds and projects at such large levels”.
Commenting on IREO’s philosophy, Mr. Madhukar Tulsi, President, said “Currently we have 13 projects under various stages of development and implementation in NCR, Haryana, Punjab, Tamil Nadu and Maharashtra. We are committed to delivering superior product quality, investment value and a level of satisfaction never before experienced by real estate buyers in India”. |
| [03 Aug 09] :: Making a Smart Property Deal |
Is it a good time to buy or sell in the real estate market right now? Chances are that as a prospective buyer or a property owner, you may be facing a serious dilemma. Industry players feel that while it may be a good decision to buy in certain locations, a sell off needs to be given a few more months till the market picks up completely. So which are the best places to buy in right now? According to global real estate consultancy Cushman & Wakefield (C&W), in Delhi NCR, it is Noida, Greater Noida Expressway and areas in Gurgaon along the Golf Course Extension Road. In Mumbai, central Mumbai and western suburbs such as Bandra, Kalina and JVLR are good bets. New emerging destinations in Bangalore such as Sarjapur Road, North and central Bangalore, apart from a few projects within the city can be considered.
Aditi Vijayakar, executive director, residential services India, C&W, says that this is a good time to buy a property for self use as prices have corrected considerably over their peak in 2007-08. “Buyers at this time can take advantage of lucrative interest rates on home loans. However, for investors entering the market, this time should be evaluated keeping the various arbitrage options that they can take advantage of in the current scenario. As far as selling is concerned, this is not a sellers market. The decision should be taken when the owner is confident of achieving the expected appreciation of the capital value of that property.”
While developers such as Vipul, Realtech, Raheja Developers and SVP Group say the market is picking up and one should look at buying, they don’t sound equally enthusiastic about selling off one’s property at this time. The fact that prices have corrected to far more realistic levels today makes buying a much better bet in these times, feel many developers. Says Punit Beriwala, MD, Vipul, “Whatever correction was possible has already happened and the properties are available at best prices today. From the investment view point, buying a property and holding it for few years is a good option. The demand for housing in mid and affordable segment is on the rise and definitely is an appropriate buying option in these times.”
However, on selling the property at this juncture, many are of the view that it’s better to hold on for some time. Harinder Dhillon, GM, marketing, Raheja Developers, says one should refrain from selling right now as the market is bouncing back. “A lot of projects recently launched have generated a fantastic response in the market. Rates have already started climbing up in select areas, and the rest are poised for growth in the next few weeks. One should wait, as in a few months’ time, a seller will get a much better rate for the property.” Agrees Vijay Jindal, CMD, SVP Group. He says that to reap the benefits in the seller’s market, one should wait as the market is really down. “It is better to wait. The reason is that property in the primary market is much cheaper than property in the secondary market. People are preferring to invest in new projects rather than going for the secondary market.”
However, keeping a few basics in mind will work well in this scenario. Rohit Malhotra, CEO, Realtech, feels that in both the cases one should consider key factors. “For those buying, it is prudent to look for better prices (as liquidity is still an issue) and they can drive better bargains. For sellers, depending upon the need to liquidate the assets, it is better to hold on for another six months and take it from there.” Be sure not to overlook the primary do’s and don’ts whether you are buying or selling off in this market. In the case of buying activity, analyse your requirement before going in for any transaction in the market, adds Mr Dhillon of Raheja Developers. According to him, if the requirement is for a ready-to-move-in property at a prime location, prices have already started firming up so it is better not to delay any further.
Legal issues together with well drafted documents relating to broker agreements must be thorough. Varied financing options must also be explored completely before finalising a property deal. Apart from the location, an important aspect to look into is the project, adds Vijayakar of C&W. “Factors such as credentials of the developer, construction time line and actual location vis-a-vis surrounding infrastructure should be taken into consideration before finalising any purchase. This is especially true in the case of purchase for investment purposes.” Make your decision after careful consideration of all the factors in play. As long as your judgement to buy or sell is a well thought out one, it is bound to give you a profitable edge. |
| [03 Aug 09] :: Real estate Market, people start buying once again |
The booming real estate market that received a jolt during the slowdown last October-November seems to be recovering. People are slowly purchasing, but only for personal use. Not for investment purposes.
“In the last few months the real estate market has undergone major changes. The slowdown that migrated from the US has got corrected in India now. The prices have got corrected. And whatever pent up demand was there in the market has started getting converted into business,” Santosh Rungta, president Confederation of Real Estate Developer’s Associations of India (CREDAI), said.
With 4,000 members, CREDAI is the apex body of the organised real estate developers and builders across India, representing pan-India associations of real estate and housing developers. People were virtually not buying during the slowdown as the real estate price was high and insecurity gripped buyers.
“The government made an appeal to us that the prices should be brought down and we (CREDAI) made an appeal to our fellow developers that they should try and bring down prices, and they acted accordingly,” Rungta said. The pan-India price reduction was to the tune of 15-35 per cent depending on various categories and geographies, he said.
“Today flats are being sold, but the pace could be better. Generally things have reversed. In Mumbai also, rightly priced projects have been sold. The major contributor to this is the government policy to generate demand. It brought in stimulus packages, ensured availability of liquidity to the home buyers, interest rates softened,” he said. Another real estate player Indrajit De, chairman of Eden, also said housing loan lending rates cut may attract a few more buyers into the market.
“If the lending rate falls further by 50 basis points, the sales figure will climb up,” he said, adding, “Certainly the market is looking up now. Sales have also improved. “We are selling around 25-30 units (flats) per month. But it was much higher in the range of 55-60 units per month before the recession actually hit India.”
Harshavardhan Neotia, chairman, Ambuja Realty Group, told IANS: “Sales have picked up in the last two-three months. There is more offtake now than what it was six months back. But now the buyers are genuine users and not just investors. These are the people who really need housing. They are lot more quality conscious and they look for the right products.”
He said there was a drop of 10-15 per cent in the price during the recession period. In the last two-three months the company has sold around 200 flats, he said. Reacting to the recent announcement by union Finance Minister Pranab Mukherjee on interest subsidy on new home loans and extension of deadline in tax holidays on projects approved by March 2008 if they are completed by March 2012, Rungta said: “One must understand that extending the tax holiday under 80 I B (10) for a mere one year to projects approved by March 2008 will fail to create a significant positive impact on the real estate market. It will only benefit a few micro markets with a handful of projects.”
CREDAI has suggested the centre consider extending the dateline to March 2012 for providing tax holidays to projects irrespective of the date of approval. “This will be of greater benefit to the sector and encourage developers to take up new projects and expedite ongoing projects as well.” Rungta further said: “Even the proposed interest subsidy of one per cent to home loan borrowers for loan taken for houses costing up to Rs 20 lakh is also not justified.”
CREDAI has proposed that the centre increase the subsidy to home loan interest rates by another one per cent to two per cent and extend the scheme for houses costing upto Rs 30 lakh from the currently proposed valuation of Rs 20 lakh. |
| [03 Aug 09] :: Lower Interest Rates cheers Gurgaon real estate market |
Encouraged by price correction and lowering of interest rates, the real estate market, after a period of relative inactivity lasting the first few months of the year, witnessed improved levels of activity on the part of retail investors in the residential sector, especially in the low to mid-end housing segment, said experts as well as market analysis reports of the second quarter in 2009.
CBRE Market View, India Office , published for the second quarter, said: “Level of enquiries went up and, more significantly, transaction velocity also increased marginally as compared to Q1 (first quarter) of 2009… However with most of the activity confined to smaller format offices, vacancy levels remain high. Most developers deferred plans for launching any new projects, the focus being on deploying the scarce resources on completing projects in hand.” |
| [03 Aug 09] :: Western Names New trend in Residential properties |
What’s in a name, you may ask. Lots, if you believe the nation’s property developers and go by the latest trend in the real estate industry as well. Gone are the days when residential properties in India used to have names in Hindi or other Indian languages, such as Ekta Garden, Dhruva Apartment and Tara Apartment . Now more than 80% apartments and residential towns, basically those built by builders, have western names such as Hamilton Heights, C a s a Essenza, Mayfield Garden and Panache Homes, among others.
So, is this just for the sake of name change or is there more than meets the eye? Industry experts believe this shift is apparently more by design than just for the sake of changing names, primarily to reflect western lifestyle and modernity.
Brotin Banerjee, CEO and MD of Tata Housing Development Company Ltd, thinks along similar lines. According to him, consumer aspirations and psychographics in India have, over the years, undergone a seminal change. With increased consumerism and other cultural changes, India is also changing - from Hindi to Hinglish, from ethnic wear to fusion dressing, from joint families to nuclear ones, from arranged marriages to arranged ‘love’ marriages, to name a few.
“In the real estate sector, this is depicted through western-sounding names and to a large extent in the design and architecture of various residential , commercial and retail spaces. Depending on the type of property, the project name is developed. For premium properties, since the design and master planning is primarily done by international architects , project names also need to reflect and compliment the same,” he says.
Citing an example, Banerjee says, “Our premium residential property in Gurgaon is developed on the theme of ‘art and culture’ and that is the reason for it being named ‘Raisina Residency’ , as it is located on the foothills of Raisina ridges.” Palnitkar agrees. “The names of residential projects today also tend to align with the architecture of the building which are rendered in a more westernized manner, ie, tall apartment blocks with spires, arches, alcoves etc, or low height villas based on Spanish, Venetian, Italian themes,” he says.
This is, however, just the beginning and many new trends are likely to be witnessed in the future. For instance , the concept of branding or brand associations with a name is prevalent in the international real estate market - for instance, ‘Donald Trump Residences’ is a brand associated with luxury housing, which could be franchised by the brand owner to a developer for a franchisee fee.
“A similar trend is imminent in the Indian real estate with celebrity endorsements already catching up in the construction industry. We could even expect a transformation in names associated with the ‘parts’ or ‘blocks’ in a building. Hence, a trend of a block simply identified with an alphabet or numeral ‘A , B, C’ or ‘1, 2, 3′ being replaced with the names of international cities/ towns/flowers is fast catching up,” says Gupta. |
| [03 Aug 09] :: Indian banks hiked exposure to realty |
Despite the global financial meltdown owing to overexposure to the housing sector, Indian banks were quite bullish in their investments to the real estate. The total outstanding credit to the real estate sector by Indian banks, both government-owned and private, at the end of March 2009 was Rs 91,500 crore as against Rs 63,000 crore till March 2008. This was not only an increase of 45% over the previous year but was more than double the amount of Rs 44,000 crore exposure of these banks during the boom period of 2007.
The major portion of this huge lending came from government-owned banks. This despite the fact that RBI had prescribed regulatory limits on banks’ exposure to individual and group borrowers as a preventive measure given the sub-prime crisis in the western world. As if it was out to reap the best out of the crisis, Punjab National Bank (PNB) lent more than Rs 11,000 crore from June 2008 to May 2009, registering an increase of at least 389% over the previous year when its total outstanding credit to real estate sector was merely Rs 2,255 crore.
PNB was closely followed by the State Bank of India which extended credit of Rs 10,467 crore till May 2009 as against its Rs 6,062 crore outstanding till May 2008, an increase of 73%, according to finance ministry data.
ICICI Bank was the third in the list of top 10 banks as per their exposure having lent a little more than Rs 4,900 crore till May this year. It, however, registered a negative growth of 14% as in the previous year its total lending to this sector exceeded Rs 5,700 crore. Other banks that figured in the list of top 10 were: Indian Overseas Bank, Oriental Bank of Commerce, Axis Bank, Bank of India, Indian Bank, Central Bank of India and Union Bank of India.
HDFC Bank seemed quite cautious in taking risk, especially during the downturn period. The bank’s total lending till May 2009 was Rs 757 crore as against Rs 250 crore till May 2008. |
| [23 Jun 09] :: 23 SEZ Proposals Get BOA Approval |
The Board of Approvals (BoA), chaired by Commerce Secretary Rahul Khullar, today approved K Raheja Universal’s request to scrap its Navi Mumbai SEZ and also allowed 23 developers more time to develop the tax-free industrial enclaves. In addition, the board also gave its nod to partially scrap another special economic zone (SEZ) developed by the Mumbai-based realtor K Raheja Universal. The company cited economic slowdown as the reason for its inability to develop both the zones, which were notified by the commerce ministry. Though there are no provisions for denotification of zones in the SEZ Act or rules till now, the law ministry had told its commerce counterpart that the board has the power to denotify SEZs with the condition that the developer will have to give back the government all the benefits it availed while constructing it.
K Raheja Universal’s told the board that it had not developed the zones and hence, had not availed any duty benefits. In its earlier meeting on June 2, the board had given conditional approval to DLF for scrapping four of its notified SEZs. In today’s meeting, which took up the leftover agenda of the previous meeting, the board also gave additional time of one year to 23 developers to build the SEZs. These include three SEZs proposed to be developed by fraud-hit Satyam Computer Services that has been recently acquired by Tech Mahindra. The pace of development of the zones have slowed down considerably, owing to lesser demand for SEZ space, high cost of borrowing and land acquisition problems. Prospective clients of the zones have put their expansion plans in the back burner, which has made developers go slow on their construction. The board also approved proposals by Shyam Steel Industries and Limitless Properties for building two zones related to information technology in West Bengal.
At the moment, there are 90 functional zones out of about 570 SEZs, which have been formally approved since February, 2006. The BoA today gave its nod to a proposal by DLF Ltd, the Delhi-based realtor, to let the metro corridor from National highway-8 to Sikandarpur to pass through the Cyber City SEZ in Gurgaon. The corridor will be built through a public-private partnership by the Haryana Urban Development Authority (HUDA) and a consortium of ITNL ENSO Rail Systems Ltd. (IERS), IL&FS Transportation Networks (India) Limited (ITNL) and DLF. The developer has assured that no tax benefits will be availed while building the elevated corridor through the zone. Moreover, the corridor will not lead to problem in contiguity — a mandatory condition for SEZs — because of its elevated status. |
| [23 Jun 09] :: ICAI to Unveil Accounting Norms for SEZs to Increase Transparency |
The Institute of Chartered Accountants of India (ICAI) will soon unveil accounting norms for special economic zones (SEZs) in the country. The new norms will standardise financial disclosure of SEZs as well as bring about greater transparency. The guidance note which is now open to the public for their suggestions seeks to bring uniformity in the manner land allotted to SEZ’s is to be treated. The various other aspects of accounting that are being aimed at uniformity is on the project development costs, rehabilitation and resettlement costs and of activities performed after a zone is notified. With huge investments going into SEZ projects, the new norms will ensure that the developers are made to follow standardised norms of accounting for their investments and revenue earned, and will provide them greater clarity in maintaining their accounts, said an ICAI official, who did not wish to be named.
The objective of this technical guide is to provide guidance to developers on accounting treatment of various SEZ development activities in their financial statements. The accounting guide comes at a time when the entire concept of SEZ is being discussed with the developers demanding further incentives. |
|
|
Advertisements |
| |
| | | | | |
| Properties in Chennai |
| Find Properties for Sale and rent at Velachery, madipakkam, Nanganallur, Adambakkam, and all the major areas in Chennai. |
| Chennai |
|
| | |
| Hyderabad Properties |
| Hyderabad realty Services - Buy sell rent properties in Gachibowli, Tellapur, etc.. |
| Gachibowli |
|
|
|
|
|
|
|
|
|
|
 |
|
|
QUICK LINKS |
| |
|
|
|
|
|
|
|
|
|
|
CITY REAL ESTATE |
| |
|
|
|
|
|
|
|
|
|
|
|
