DLF, India’s biggest real estate company, seems to have forgotten its recent troubles. With some funding available to it, it has now decided to stay in some of the business that it had considered peripheral — hospitality included. DLF is gearing up for a second innings in the commercial space, thanks to an eased liquidity situation that has pumped some confidence in the real estate sector. The company has now revived its commercial projects, which were on hold for the last one year or so.
NDTV learnt from sources that DLF’s commercial expansion will be mainly centered around hospitality and retail, with an investment of Rs 4,000 crore to be funded through long term debt. Stake sale, if any, would be at project specific only. The company will initially focus on Delhi and plans to launch about 3 hotels and 7 malls in Delhi over the next couple of quarters. An office project is in the offing in West Delhi, adjacent to its proposed housing complex at Swatantra Bharat Mills.
Anshuman Magazine, chairman of CBRE India, said, “The rental market has shown some recovery in the last few months. Things have somewhat started to look up. The country’s largest realtor earmarking expansion plans in the commercial space will further help boost sentiment.” Experts opine that DLF’s approach seems to be much more subdued this time on. So, instead of the mega plans of 25,000 keys by 2010, it is now talking about a mere 350 keys across 3 properties in Delhi. D K Agarwal, MD of SMC Global, said, “We will still be more cautious on our outlook for commercial and hospitality. The past experience has not been very positive.” Although DLF has decided to revisit commercial projects, the company insiders say that residential projects, mainly affordable housing will continue to be the key growth driver, at least for the next few quarters.
Ref:http://www.indianrealtynews.com/real-estate-india/dlf-to-reconsider-on-hold-commercial-plans.html
Wednesday, August 12, 2009
QIPs Emerge as Saviors for Real Estate Developers
With money from private equity (PE) majors hard to come by for the real estate companies, the qualified institutional placement (QIP) route and the capital market have been a shot in the arm. This comes on the back of PE majors being cautious about investing in the real estate sector on account of having taken a hit on their investments in the past. In 2009 so far, real estate companies have raised Rs 9,762 crore only through QIPs with at least half-a-dozen others such as Godrej Properties and Lodha Developers outlining their intention to go public by the year-end. As much as $2.5 billion from six companies is expected to be raised through the capital market route.
By comparison, this year has seen just one private equity deal in the real estate sector. In May, Sun Apollo India Real Estate fund made an investment of Rs 300 crore in Mumbai-based Keystone Realtors. According to Kamal Khetan, MD of Sunteck Realty, another Mumbai-based realty company, it makes better sense to go to the capital market than looking for a PE investor. “It is difficult to get in the right kind of investor. We are looking at a Rs 500-crore QIP to expand our operations.” Understandably, the large number of companies in the real estate sector, which have taken the QIP route, are the trigger for others in the sector. Said Amber Maheshwari, director, investments, DTZ, an international property consultant: “In the present situation, companies in the sector have had a good experience with QIPs and will now look at the capital markets as well. With PE money not easily available, options are limited.”
Industry trackers point out that stringent rules for investments have been the reason for a lack of common ground between PE investors and the real estate companies. “Now, most of the PE funds demand that the investment in an SPV be made in tranches and be directly proportional to the developers’ capacity to finish projects in time,” said Biren Parekh, partner, (Real Estate), Ernst & Young. It is gathered that in some instances, the option of bringing in PE investors as well as going public is also being considered. According to a senior official at Bangalore-based Nitesh Estates, which is looking to raise Rs 1,200 crore, half of the amount will come through IPO, while the rest through potential PE investors.
Ref:http://www.indianrealtynews.com/real-estate-developers/qips-emerge-as-saviors-for-real-estate-developers.html
By comparison, this year has seen just one private equity deal in the real estate sector. In May, Sun Apollo India Real Estate fund made an investment of Rs 300 crore in Mumbai-based Keystone Realtors. According to Kamal Khetan, MD of Sunteck Realty, another Mumbai-based realty company, it makes better sense to go to the capital market than looking for a PE investor. “It is difficult to get in the right kind of investor. We are looking at a Rs 500-crore QIP to expand our operations.” Understandably, the large number of companies in the real estate sector, which have taken the QIP route, are the trigger for others in the sector. Said Amber Maheshwari, director, investments, DTZ, an international property consultant: “In the present situation, companies in the sector have had a good experience with QIPs and will now look at the capital markets as well. With PE money not easily available, options are limited.”
Industry trackers point out that stringent rules for investments have been the reason for a lack of common ground between PE investors and the real estate companies. “Now, most of the PE funds demand that the investment in an SPV be made in tranches and be directly proportional to the developers’ capacity to finish projects in time,” said Biren Parekh, partner, (Real Estate), Ernst & Young. It is gathered that in some instances, the option of bringing in PE investors as well as going public is also being considered. According to a senior official at Bangalore-based Nitesh Estates, which is looking to raise Rs 1,200 crore, half of the amount will come through IPO, while the rest through potential PE investors.
Ref:http://www.indianrealtynews.com/real-estate-developers/qips-emerge-as-saviors-for-real-estate-developers.html
Realty Regulators a Necessity at State Level: HDFC Chairman
Housing Development Finance Corporation (HDFC) chairman Deepak Parekh has said there is a compelling need to have real estate regulators at state level to deal with issues concerning the housing sector. “There is a compelling need for state-level real estate regulators,” Parekh said in an annual report of the company sent to shareholders. Discussing various aspects of real estate, he said, “It would be a missed opportunity if the government were not able to lay out an institutional framework for a real estate regulator”.
According to Parekh, regulators’ role would be to monitor the affordable housing agenda, promote real estate reforms and ensure transparency especially by mandating that flats be sold only on carpet area and act as a platform to protect buyers from real estate fraud. Referring to the affordable housing, Parekh observed that affordable housing is not about box-sized , budget homes in far-flung places where there is no connectivity to work places and little surrounding infrastructure. “Affordable housing has to be able to cut across all income segments and has to make economic sense in terms of proximity to work place”, he said.
About challenges being faced in rural housing, he sid challenges of rural housing are vastly different from urban housing and key reform like permitting the mortgage of agricultural land for residential purpose was needed. Parekh has also criticised tendency of state housing boards to make profits by selling lands. He said,”many housing boards have shifted their focus to merely selling land for profit and sitting on cash surpluses. Such profits should be mandatorily ring fenced and deployed only for affordable housing,” he said.
Ref:http://www.indianrealtynews.com/real-estate-india/realty-regulators-a-necessity-at-state-level-hdfc-chairman.html
According to Parekh, regulators’ role would be to monitor the affordable housing agenda, promote real estate reforms and ensure transparency especially by mandating that flats be sold only on carpet area and act as a platform to protect buyers from real estate fraud. Referring to the affordable housing, Parekh observed that affordable housing is not about box-sized , budget homes in far-flung places where there is no connectivity to work places and little surrounding infrastructure. “Affordable housing has to be able to cut across all income segments and has to make economic sense in terms of proximity to work place”, he said.
About challenges being faced in rural housing, he sid challenges of rural housing are vastly different from urban housing and key reform like permitting the mortgage of agricultural land for residential purpose was needed. Parekh has also criticised tendency of state housing boards to make profits by selling lands. He said,”many housing boards have shifted their focus to merely selling land for profit and sitting on cash surpluses. Such profits should be mandatorily ring fenced and deployed only for affordable housing,” he said.
Ref:http://www.indianrealtynews.com/real-estate-india/realty-regulators-a-necessity-at-state-level-hdfc-chairman.html
Monday, August 10, 2009
Govt Offers 1% Loan Subsidy to Encourage Affordable Housing in Tier II & III Cities
Govt has offered 1% subsidy on loans up to Rs 10 lakh & doled out tax sops for developers. But this will mainly boost affordable housing projects in Tier II & III cities. Metros will be missing from the list. At a time when low cost is the clearly the buzzword in the real estate sector, Union finance minister Pranab Mukherjee’s move to offer 1% interest subsidy on housing loans up to Rs 10 lakh can be seen as a positive development for the middle income group. The condition being that the price of the house should not exceed Rs 20 lakh. So what does this really mean for buyers who want to own their dream house? Is it really as good as it looks?
Avinash Narvekar, partner, Real Estate Practice, E&Y says the latest incentives are targeted at benefiting buyers of affordable homes. But there are some pros and cons. “The interest subsidy scheme would only apply to houses in the sub Rs 20 lakh category. This would automatically rule out most properties in a city like Mumbai, except for properties in distant suburbs. Secondly, the interest subsidy is only for the first year. Housing loans are inherently long-term borrowings (of 5-20 years), and therefore the benefit of the scheme may not be significant,” he says. So let’s take a look at what this can do for your EMI. According to Kaustuv Roy, executive director, India, Cushman & Wakefield (C&W), for a Rs 20-lakh apartment, the sanctioned loan amount is generally around Rs 15 lakh. So for a Rs 15-lakh housing loan, at 10% interest rate per annum and a 20-year tenure, the EMI comes to Rs 14,476 per month. Of this, if Rs 10 lakh is at 9% per annum interest rate, and the balance Rs 5 lakh is at the same interest rate, the EMI comes to Rs 13,824 per month.
The savings thus is Rs 652 per month, only for the first year, translating to Rs 7,824 as savings due to this scheme. This translates to a savings of 5% of EMI in the first year, and over the entire tenure of the loan, it works out to 0.25% savings of the total EMI paid. Besides savings on your EMI, the second incentive doled out for developers may also help. Tax holidays given to developers for projects approved between April 1, 2007, and March 31, 2008, with a completion deadline on or before March 31, 2012, is likely to have an indirect benefit for the consumer. So if the developer chooses to pass on this advantage to the buyer, it could mean a lower price for them.
While developers do not say anything much about how they plan to pass on this benefit, they agree that it is mostly consumers in Tier-II and Tier-III cities who would benefit from the latest incentives announced by the government. “Metro cities would generally miss out from this list owing to high Floor Space Index (FSI) costs. But the overall affordable segment is bound to witness an increased activity post this initiative,” feels Rajeev Rai, vice-president, corporate, Assotech. The developer has its Windsor Hills project in Gwalior and The Metropolis in Rudrapur, where consumers can opt for a home below Rs 20 lakh. Similarly, BPTP too has projects in this category such as the Park Elite Floors starting at Rs 16.08 lakh that was launched in May 2009. They recently also launched the Park Elite Premium at Rs 17.98 lakh that caters to the middle income group. “The given scheme will indeed help end consumers investing in budget housing projects make way for lesser EMI and more affordability,” says Amit Raj Jain, vice-president – marketing, BPTP.
Some, however, are of the view that although the 1% interest rate cut will help, it should be extended to the Rs 30-lakh bracket. “In metros there are hardly any projects that cost less than Rs 20 lakh. This is primarily going to help buyers interested in a Tier III city. For metros this step almost amounts to nothing,” asserts Vijay Jindal, CMD, SVP Group. The developer has recently launched Gulmohur Garden phase II at Raj Nagar Extention NH-58 starting at Rs 16.53 lakh. Mr Narvekar of E&Y adds that although the options in Tier I cities for Rs 20 lakh homes would be limited, there are some renowned developers such as Tata Housing that have come up with low cost projects like the Shubha Griha for homes in the sub Rs 10 lakh category. He, however, exercises a word of caution for the buyer. “Though there will be a lot of choices, most of the upcoming projects are likely to be on city outskirts with a fair degree of travel involved in getting to the central business district. Also, consumers will need to be aware that most of the cost reduction on affordable housing has been achieved through reduction in the unit size and a cut-back on various frills that had become a part of most projects launched in the last 2-3 years.”
Ref:http://www.indianrealtynews.com/real-estate-developers/govt-offers-1-loan-subsidy-to-encourage-affordable-housing-in-tier-ii-iii-cities.html
Avinash Narvekar, partner, Real Estate Practice, E&Y says the latest incentives are targeted at benefiting buyers of affordable homes. But there are some pros and cons. “The interest subsidy scheme would only apply to houses in the sub Rs 20 lakh category. This would automatically rule out most properties in a city like Mumbai, except for properties in distant suburbs. Secondly, the interest subsidy is only for the first year. Housing loans are inherently long-term borrowings (of 5-20 years), and therefore the benefit of the scheme may not be significant,” he says. So let’s take a look at what this can do for your EMI. According to Kaustuv Roy, executive director, India, Cushman & Wakefield (C&W), for a Rs 20-lakh apartment, the sanctioned loan amount is generally around Rs 15 lakh. So for a Rs 15-lakh housing loan, at 10% interest rate per annum and a 20-year tenure, the EMI comes to Rs 14,476 per month. Of this, if Rs 10 lakh is at 9% per annum interest rate, and the balance Rs 5 lakh is at the same interest rate, the EMI comes to Rs 13,824 per month.
The savings thus is Rs 652 per month, only for the first year, translating to Rs 7,824 as savings due to this scheme. This translates to a savings of 5% of EMI in the first year, and over the entire tenure of the loan, it works out to 0.25% savings of the total EMI paid. Besides savings on your EMI, the second incentive doled out for developers may also help. Tax holidays given to developers for projects approved between April 1, 2007, and March 31, 2008, with a completion deadline on or before March 31, 2012, is likely to have an indirect benefit for the consumer. So if the developer chooses to pass on this advantage to the buyer, it could mean a lower price for them.
While developers do not say anything much about how they plan to pass on this benefit, they agree that it is mostly consumers in Tier-II and Tier-III cities who would benefit from the latest incentives announced by the government. “Metro cities would generally miss out from this list owing to high Floor Space Index (FSI) costs. But the overall affordable segment is bound to witness an increased activity post this initiative,” feels Rajeev Rai, vice-president, corporate, Assotech. The developer has its Windsor Hills project in Gwalior and The Metropolis in Rudrapur, where consumers can opt for a home below Rs 20 lakh. Similarly, BPTP too has projects in this category such as the Park Elite Floors starting at Rs 16.08 lakh that was launched in May 2009. They recently also launched the Park Elite Premium at Rs 17.98 lakh that caters to the middle income group. “The given scheme will indeed help end consumers investing in budget housing projects make way for lesser EMI and more affordability,” says Amit Raj Jain, vice-president – marketing, BPTP.
Some, however, are of the view that although the 1% interest rate cut will help, it should be extended to the Rs 30-lakh bracket. “In metros there are hardly any projects that cost less than Rs 20 lakh. This is primarily going to help buyers interested in a Tier III city. For metros this step almost amounts to nothing,” asserts Vijay Jindal, CMD, SVP Group. The developer has recently launched Gulmohur Garden phase II at Raj Nagar Extention NH-58 starting at Rs 16.53 lakh. Mr Narvekar of E&Y adds that although the options in Tier I cities for Rs 20 lakh homes would be limited, there are some renowned developers such as Tata Housing that have come up with low cost projects like the Shubha Griha for homes in the sub Rs 10 lakh category. He, however, exercises a word of caution for the buyer. “Though there will be a lot of choices, most of the upcoming projects are likely to be on city outskirts with a fair degree of travel involved in getting to the central business district. Also, consumers will need to be aware that most of the cost reduction on affordable housing has been achieved through reduction in the unit size and a cut-back on various frills that had become a part of most projects launched in the last 2-3 years.”
Ref:http://www.indianrealtynews.com/real-estate-developers/govt-offers-1-loan-subsidy-to-encourage-affordable-housing-in-tier-ii-iii-cities.html
UK’s Hotel Chain Premier Inn Plans to Set up 80 Hotels in India
United Kingdom’s hotel chain Premier Inn is planning to open about 80 hotels in the country in the next 10 years. The hotel chain will invest Rs 4,000 crore to build 3-star hotels at various locations in the country with a combined capacity of 9,700 rooms.
“We have planned 18 hotels in the first five years and 80 in 10 years with a total investment of Rs 3500-4000 crore,” Premier Inn India Managing Director Aly Shariff told media. He said the company has formed a joint venture with real estate player Emaar MGF, which will bring in the initial investment. “Our JV partner will bring in the investment initially, However, we will raise money through debt later,” Shariff said. The hotel chain would begin with the metros and gradually expand to cover leisure destinations as well.
Ref:http://www.indianrealtynews.com/hotel-industry/uks-hotel-chain-premier-inn-plans-to-set-up-80-hotels-in-india.html
“We have planned 18 hotels in the first five years and 80 in 10 years with a total investment of Rs 3500-4000 crore,” Premier Inn India Managing Director Aly Shariff told media. He said the company has formed a joint venture with real estate player Emaar MGF, which will bring in the initial investment. “Our JV partner will bring in the investment initially, However, we will raise money through debt later,” Shariff said. The hotel chain would begin with the metros and gradually expand to cover leisure destinations as well.
Ref:http://www.indianrealtynews.com/hotel-industry/uks-hotel-chain-premier-inn-plans-to-set-up-80-hotels-in-india.html
Chennai Metro Rail can Escalate Real Estate Prices in the City
The Chennai Metro Rail has become a buzzword not only among people awaiting to commute in the comfort of the air-conditioned trains, but also amidst the real estate sector, which pins its hope on this multi -crore project for a revival. Real estate developers reeling under the pressure of the global recession, confirm that the Metro Rail project has become a determining factor in the escalation of real estate prices in the city.
Land prices around the Chennai Metro Rail project skyrocketed as developers flocked in to invest in these prime locations. Buyers are finding it a lucrative option owing to easy accessibility and development that is expected to take place once the project materialises. “The Metro rail project has given a new lease of life to the real estate sector, which has been experiencing a lull due to the recession. It has generated lot of interest among the developers and buyers. Despite the project being in the initial stages of construction, the land prices have considerably gone up since the works began,” said S Vasudevan, Chairman, Ozonegroup.
With the Metro project connecting places like Chennai Central, EVR Periyar Salai, Vepery, Aminjikarai, Shenoy Nagar, Anna Nagar, Tirumangalam, Koyambedu, Vadapalani, Ashok Nagar Alandur, St. Thomas Mount the land prices in these regions were going up. “These are already prime areas sought after for both commercial and residential purposes. The services of suburban trains or MRTS are not available in these areas and this has always been a negative factor for developers,” he added. Sohail Sarooshi, member of the Chennai Rail Estate Agents Association (CREAA) said: “Connectivity is a main factor in real estate. The projects on OMR or the six lane IT Corridor failed to be a hit with people, as there are no train services and proper public transportation.”
According to him, there is a big demand for flats and refurbished flats in the city. The developers would focus on where the Metro stations would come up. The project has just begun. “The real estate sector is waiting to get a better picture of the route and the stations of the Metro trains and also the accessibility to these places,” he added.
Ref:http://www.indianrealtynews.com/property-prices/chennai-metro-rail-can-escalate-real-estate-prices-in-the-city.html
Land prices around the Chennai Metro Rail project skyrocketed as developers flocked in to invest in these prime locations. Buyers are finding it a lucrative option owing to easy accessibility and development that is expected to take place once the project materialises. “The Metro rail project has given a new lease of life to the real estate sector, which has been experiencing a lull due to the recession. It has generated lot of interest among the developers and buyers. Despite the project being in the initial stages of construction, the land prices have considerably gone up since the works began,” said S Vasudevan, Chairman, Ozonegroup.
With the Metro project connecting places like Chennai Central, EVR Periyar Salai, Vepery, Aminjikarai, Shenoy Nagar, Anna Nagar, Tirumangalam, Koyambedu, Vadapalani, Ashok Nagar Alandur, St. Thomas Mount the land prices in these regions were going up. “These are already prime areas sought after for both commercial and residential purposes. The services of suburban trains or MRTS are not available in these areas and this has always been a negative factor for developers,” he added. Sohail Sarooshi, member of the Chennai Rail Estate Agents Association (CREAA) said: “Connectivity is a main factor in real estate. The projects on OMR or the six lane IT Corridor failed to be a hit with people, as there are no train services and proper public transportation.”
According to him, there is a big demand for flats and refurbished flats in the city. The developers would focus on where the Metro stations would come up. The project has just begun. “The real estate sector is waiting to get a better picture of the route and the stations of the Metro trains and also the accessibility to these places,” he added.
Ref:http://www.indianrealtynews.com/property-prices/chennai-metro-rail-can-escalate-real-estate-prices-in-the-city.html
Deterred by Real Estate Downturn Farmers Get Back to Agriculture
Deterred by the downturn in the real estate sector and encouraged by a good price for paddy, farmers in the southern suburbs of Chennai have given up their dreams of striking gold by selling their holdings and have reverted to agriculture in the recent months. According to Agricultural Officer, Chitlapakkam Block, Kanchipuram district, R Venkatasubramanian, cultivation of paddy varieties has come up again at many villages in the past few months. This includes Nanmangalam Medavakkam, Ottiyambakkam, Gowrivakkam, Sittalapakkam, Agaremthen and Vengaivasal - all on the fringes of Chennai.
“Farming is back in over 150 acres of land in these areas and paddy is the main crop,” the official said. The land now being used again for agriculture was originally planned for sale by the owners. However, following ‘unattractive’ land prices, they had given up their idea of selling land. “We hope that more farmers who have land and allowed it to remain barren with hopes of selling it will take up farming again,” Venkatasubramanian expressed hope, adding steps were being taken by the district administration to support and encourage agriculturists to take up farming again.
N Sripathi, a farmer of Paduvancherri about 8 km from Camp Road, Selaiyur, said he abandoned his idea of selling 2.5 acres of his land. ADP 43 variety of paddy was sown in that land and the cultivation was just getting over. J Venkatesan, another agriculturist of the same village, said most people had given up the idea of parting with their holdings because of the continuing slump in the real estate sector. “We are glad that now we get about Rs 1000 for a bag of paddy and we hope the authorities will look into our other troubles as well so that more and more people will start farming in the lands that were set apart (lying in disuse) for sale,” he said.
Ref:http://www.indianrealtynews.com/real-estate-india/deterred-by-real-estate-downturn-farmers-get-back-to-agriculture.html
“Farming is back in over 150 acres of land in these areas and paddy is the main crop,” the official said. The land now being used again for agriculture was originally planned for sale by the owners. However, following ‘unattractive’ land prices, they had given up their idea of selling land. “We hope that more farmers who have land and allowed it to remain barren with hopes of selling it will take up farming again,” Venkatasubramanian expressed hope, adding steps were being taken by the district administration to support and encourage agriculturists to take up farming again.
N Sripathi, a farmer of Paduvancherri about 8 km from Camp Road, Selaiyur, said he abandoned his idea of selling 2.5 acres of his land. ADP 43 variety of paddy was sown in that land and the cultivation was just getting over. J Venkatesan, another agriculturist of the same village, said most people had given up the idea of parting with their holdings because of the continuing slump in the real estate sector. “We are glad that now we get about Rs 1000 for a bag of paddy and we hope the authorities will look into our other troubles as well so that more and more people will start farming in the lands that were set apart (lying in disuse) for sale,” he said.
Ref:http://www.indianrealtynews.com/real-estate-india/deterred-by-real-estate-downturn-farmers-get-back-to-agriculture.html
Bangalore-Based Realty Developer Plans to Raise Rs 1,200 cr
Nitesh Estates, a Bangalore-based realty major, is on private equity trail after Citigroup snapped a $350-million funding last year, citing the deteriorating economic environment. The firm has now opened talks with Farallon Capital, JP Morgan and TPG Capital, among others, for raising capital through equity sale at entity and project levels, said multiple sources familiar with the development. It is planning to raise Rs 1,200 crore through a combination of PE deals and a possible initial public offering (IPO) during the fourth quarter of this fiscal. The company is in the process of raising around Rs 600 crore through PE placement, while the IPO size could be Rs 500-600 crore. Morgan Stanley is advising Nitesh Estates on the private equity fund raising, which kicked off nearly two months back. Promoter Nitesh Shetty has a 85% stake in the company, while Och-Ziff holds the remaining. When contacted, Nitesh Estates declined to comment.
While investors, like JP Morgan and Farallon, have been scouting for real estate portfolios, TPG Capital’s interest in the sector is relatively new. A banking source confirmed that TPG Capital has been holding preliminary discussions with a few realty players to book assets that are coming in at discounted valuations. Till now, TPG’s realty exposure was mainly through a $10-billion hedge fund TPG-Axon Capital Management. Sources said Nitesh has approached PE players for funding its realty plans in Bangalore, Chennai and Kochi — the projects into which Citigroup funding was expected to flow in. Citigroup Property Investors rolled back operations in emerging markets, following last year’s financial turmoil. The global financial giant’s real estate arm limited its exposure to $55 million investment in Nitesh Estates’ upcoming Ritz Carlton hotel in Bangalore, and discontinued its financing for other projects.
In the past, Nitesh Estates has claimed that it has 8-9 million sq ft development in the pipeline, mainly across the four southern cities and Goa. “The funds would be raised through PE transaction and IPO. We hope to first finalise the PE placement, which will be an equity level as well as special purpose vehicle level. The investment bank has brought a few potential investors on the table,” said a source with direct knowledge of the development. While the company has tied up financing for India’s first Ritz Carlton, some of its other large projects, including a mixed use development near Bolgatty in Kochi, a villa project at Devanahalli in Bangalore and a city center development in Chennai require funding.
Ref:http://www.indianrealtynews.com/real-estate-india/bangalore/bangalore-based-realty-developer-plans-to-raise-rs-1200-cr.html
While investors, like JP Morgan and Farallon, have been scouting for real estate portfolios, TPG Capital’s interest in the sector is relatively new. A banking source confirmed that TPG Capital has been holding preliminary discussions with a few realty players to book assets that are coming in at discounted valuations. Till now, TPG’s realty exposure was mainly through a $10-billion hedge fund TPG-Axon Capital Management. Sources said Nitesh has approached PE players for funding its realty plans in Bangalore, Chennai and Kochi — the projects into which Citigroup funding was expected to flow in. Citigroup Property Investors rolled back operations in emerging markets, following last year’s financial turmoil. The global financial giant’s real estate arm limited its exposure to $55 million investment in Nitesh Estates’ upcoming Ritz Carlton hotel in Bangalore, and discontinued its financing for other projects.
In the past, Nitesh Estates has claimed that it has 8-9 million sq ft development in the pipeline, mainly across the four southern cities and Goa. “The funds would be raised through PE transaction and IPO. We hope to first finalise the PE placement, which will be an equity level as well as special purpose vehicle level. The investment bank has brought a few potential investors on the table,” said a source with direct knowledge of the development. While the company has tied up financing for India’s first Ritz Carlton, some of its other large projects, including a mixed use development near Bolgatty in Kochi, a villa project at Devanahalli in Bangalore and a city center development in Chennai require funding.
Ref:http://www.indianrealtynews.com/real-estate-india/bangalore/bangalore-based-realty-developer-plans-to-raise-rs-1200-cr.html
Omaxe Launches Integrated Township Project in Allahabad
Omaxe Ltd has launched Omaxe Sangam City, an integrated township in Allahabad, according to a press release. The 96-acre Omaxe Sangam City offers plots ranging from 86 sq. yards to 671 sq. yd available at competitive price of Rs 5,200 per sq.yd. Set in a green environment and recreational and entertainment facilities, the project value of Omaxe Sangam City is about Rs 100 crores. Omaxe, through its subsidiary, had earlier entered into an agreement with Allahabad Development Authority for the development of Omaxe Waterfront, a hi-tech township, to be built over 1,535 acres with a total investment of around Rs 1,800 crore.
Located on the bank of the holy Ganga, Sangam City offers a view of Sangam Triveni of three holy rivers — the Ganga, the Yamuna and the Saraswati. The release quoting Mr Rohtas Goel, CMD, Omaxe Ltd, said, “Omaxe Sangam City will be Allahabad’s first self-contained township on the banks of the holy Ganges, a very first initiative catering to the multifarious needs of the residents.” With limited edition villas, Sangam City will be a self-sufficient township with healthcare support, a prominent educational institute, office spaces and retail opportunities. With technical approvals received, the possession of the Omaxe Sangam city plots will be offered in 30 months.
Ref:http://www.indianrealtynews.com/real-estate-trends/omaxe-launches-integrated-township-project-in-allahabad.html
Located on the bank of the holy Ganga, Sangam City offers a view of Sangam Triveni of three holy rivers — the Ganga, the Yamuna and the Saraswati. The release quoting Mr Rohtas Goel, CMD, Omaxe Ltd, said, “Omaxe Sangam City will be Allahabad’s first self-contained township on the banks of the holy Ganges, a very first initiative catering to the multifarious needs of the residents.” With limited edition villas, Sangam City will be a self-sufficient township with healthcare support, a prominent educational institute, office spaces and retail opportunities. With technical approvals received, the possession of the Omaxe Sangam city plots will be offered in 30 months.
Ref:http://www.indianrealtynews.com/real-estate-trends/omaxe-launches-integrated-township-project-in-allahabad.html
Rising Home Sales Brings Hope for Developers
After a long hiatus, home sales are finally back on track. Sales of major real estate developers have more than trebled in the June quarter compared to the preceding three months, amid growing expectations that the good times will continue to roll. DLF, the country’s largest real estate developer by market value, has sold 2,500 apartments in the first quarter of the current fiscal, compared to nearly 600 in the quarter ended March 2009. In the preceding quarter, DLF had sold just about 120 apartments.
Unitech, the country’s second largest property developer, went a step further and sold 5,000 units in the first quarter, compared to 300 to 400 apartments in the preceding quarter. Delhi-based Parsvnath Developers did 100-odd transactions against 25 to 30 in the previous quarters, and Omaxe reported sales of 700 units, compared to 200 in the same period. “After a few difficult quarters last fiscal, we have seen a fairly good first quarter of the current fiscal. The economy on the whole has been showing signs of recovery, and activity in real estate has picked up,’’ DLF Vice-Chairman Rajiv Singh said. Almost all of them are convinced that the future looks bright. While DLF’s Singh said he expected the market to improve, a Unitech spokesperson said the market would pick up in the second quarter, though demand would be mainly for affordable products.
“It is a good time to bargain-pick now,” said Ravi Ramu, director of Bangalore-based Puravankara Projects. That the first-quarter sales are no flash in the pan is reflected in the fact that developers have lined up around 60 million square feet of new launches this year, more than double last fiscal’s bookings. DLF plans to launch 8 to 9 million sq ft of city centre projects in Chennai, Kochi, Delhi and Gurgaon and 5 to 8 million sq ft of mid-income housing projects in the National Capital Region and southern cities. Unitech has launched buildings covering 15 million sq ft since April and plans to launch an additional 15 million by March 2010.
Apart from lower interest rates and affordable housing, the reduction in the number of fence-sitters has helped in a major way. ICICI Bank Chief Financial Officer N S Kannan said buyers had been postponing their purchase decisions in the hope that prices would fall further. “There is a general sense now that prices have stabilised,” he said, adding “our disbursements, month-on-month, have increased and we would like to play in that market based on our current strategy on pricing”. Though Kannan was not willing to comment on a specific number, sources in the bank said it was expecting a 20 per cent growth in disbursals in the second quarter. SBI, the country’s largest bank, has set a monthly home loan disbursal target at Rs 2,500 crore compared to Rs 1,500 crore disbursed over the last few months. The bank is targeting a home loan growth of 30 per cent in the current fiscal against 21 per cent in 2008-09.
HDFC, the country’s largest home loan lender, saw its disbursals rise 22 per cent in the first quarter and expects the trend to continue. While several property developers have ventured aggressively into Rs 20-Rs 60 lakh apartments and launched properties that were 20 to 30 per cent lower than the prevailing rates, interest rates have also softened in the last six months, which eased the monthly loan pay-outs of home buyers. In December, the Indian Banks’ Association (IBA) and its members in December had announced new rates, under which loans up to Rs 5 lakh was offered at 8.5 per cent and those between Rs 5 lakh and Rs 20 lakh at 9.25 per cent. Private sector banks have also reduced their retail lending rates 50 to 100 basis points in the December 2008-June 2009 period. Analysts are also gung-ho. Pankaj Kapoor, chief executive of Liases Foras, a real estate research firm, said the momentum would increase after Diwali. “Now we are seeing a momentum for some time, lull for the next few days and then momentum. This will change as the economic recovery gathers steam,’’ he said
Ref:http://www.indianrealtynews.com/real-estate-developers/rising-home-sales-brings-hope-for-developers.html
Unitech, the country’s second largest property developer, went a step further and sold 5,000 units in the first quarter, compared to 300 to 400 apartments in the preceding quarter. Delhi-based Parsvnath Developers did 100-odd transactions against 25 to 30 in the previous quarters, and Omaxe reported sales of 700 units, compared to 200 in the same period. “After a few difficult quarters last fiscal, we have seen a fairly good first quarter of the current fiscal. The economy on the whole has been showing signs of recovery, and activity in real estate has picked up,’’ DLF Vice-Chairman Rajiv Singh said. Almost all of them are convinced that the future looks bright. While DLF’s Singh said he expected the market to improve, a Unitech spokesperson said the market would pick up in the second quarter, though demand would be mainly for affordable products.
“It is a good time to bargain-pick now,” said Ravi Ramu, director of Bangalore-based Puravankara Projects. That the first-quarter sales are no flash in the pan is reflected in the fact that developers have lined up around 60 million square feet of new launches this year, more than double last fiscal’s bookings. DLF plans to launch 8 to 9 million sq ft of city centre projects in Chennai, Kochi, Delhi and Gurgaon and 5 to 8 million sq ft of mid-income housing projects in the National Capital Region and southern cities. Unitech has launched buildings covering 15 million sq ft since April and plans to launch an additional 15 million by March 2010.
Apart from lower interest rates and affordable housing, the reduction in the number of fence-sitters has helped in a major way. ICICI Bank Chief Financial Officer N S Kannan said buyers had been postponing their purchase decisions in the hope that prices would fall further. “There is a general sense now that prices have stabilised,” he said, adding “our disbursements, month-on-month, have increased and we would like to play in that market based on our current strategy on pricing”. Though Kannan was not willing to comment on a specific number, sources in the bank said it was expecting a 20 per cent growth in disbursals in the second quarter. SBI, the country’s largest bank, has set a monthly home loan disbursal target at Rs 2,500 crore compared to Rs 1,500 crore disbursed over the last few months. The bank is targeting a home loan growth of 30 per cent in the current fiscal against 21 per cent in 2008-09.
HDFC, the country’s largest home loan lender, saw its disbursals rise 22 per cent in the first quarter and expects the trend to continue. While several property developers have ventured aggressively into Rs 20-Rs 60 lakh apartments and launched properties that were 20 to 30 per cent lower than the prevailing rates, interest rates have also softened in the last six months, which eased the monthly loan pay-outs of home buyers. In December, the Indian Banks’ Association (IBA) and its members in December had announced new rates, under which loans up to Rs 5 lakh was offered at 8.5 per cent and those between Rs 5 lakh and Rs 20 lakh at 9.25 per cent. Private sector banks have also reduced their retail lending rates 50 to 100 basis points in the December 2008-June 2009 period. Analysts are also gung-ho. Pankaj Kapoor, chief executive of Liases Foras, a real estate research firm, said the momentum would increase after Diwali. “Now we are seeing a momentum for some time, lull for the next few days and then momentum. This will change as the economic recovery gathers steam,’’ he said
Ref:http://www.indianrealtynews.com/real-estate-developers/rising-home-sales-brings-hope-for-developers.html
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