Monthly Archives: March 2008

Damac Properties signs 60 realty agents in India

NEW DELHI: Real Estate Developer Damac Properties announced on Monday that it has tied up with 60 agents in the country across metros and Tier I cities to market and sell their regional properties to the Indian investors.
“We are proud to have signed on 60 agents in India. As demand is high, we wanted to touch each corner of India through an experienced network of agents,” said the Damac Holding Founder and Chairman Mr Hussain Sajwani in a statement.
The company would provide training to the agents through its institute – Damac Agents Academy. “The main purpose of the training that we provide our agents is to equip the agents with product knowledge of Damac brand and its value, the sales process, luxury property selling skills; raising the bar and setting a service benchmark in the real estate market,” the Damac Properties CEO Mr Peter Riddoch said.
The company would market its Dubai-based Ocean Heights, Lotus Heights, Park Towers and the recently launched high-end residential properties through the agents, the statement said.
Damac Properties is a part of Damac Holdings, which is engaged in developing residential and commercial properties in Jordan, Lebanon, Qatar, Saudi Arabia, the Middle East and the Far East.

Real Estate Opportunities Swings To FY07 Profit

Real Estate Opportunities Ltd (REO.L) reported profit before tax for fiscal 2007 compared to pre-tax loss last year, mainly on higher interest receivable and similar income.

For fiscal 2007, the company reported that it swung to pre-tax profit of £25.59 million from year ago loss of £20.45 million, largely helped a jump in interest receivables and similar income. The property dealer’s earnings per share for the year was 8.1 pence versus a loss per share of 4.6 pence in 2006.

Total interest receivable and similar income for the year increased significantly to £56.89 million from £5.5 million last year, largely due to £52.07 million received in connection with two legal settlements. On March 15 2007, Real Estate Opportunities reached an agreement with Aberdeen Asset Management on a pending lawsuit. On May 16, REO reached a settlement with UBS regarding another claim.

REO’s group turnover from continuing operations for 2007 grew to £19.17 million, from £16.77 million in the preceding year, reflecting increase in revenues from the company’s portfolio of investment and development properties in and around Dublin. Property income from Ireland rose to £18.5 million from £16.61 million last year.

The Jersey based company ‘s net asset value or NAV rose to £559.66 million or 151.9 pence per share from £269.1 million or 104.5 pence per share in the prior year.

REO is also proposing a final dividend for 2007 of 1.5 pence per ordinary share to be paid on July 18.

Sayaji Hotels To Invest Rs 20 Crores In New Hotel At Indore

The Board of directors of Sayaji Hotels Ltd has approved to invest Rs. 20 crores for the project of budget hotel At Indore. It will be a 175 room’s mid segment budget hotel.

This 175 room Hotel will be operational from 2010 and will be developed and operated under the wholly owned Subsidiary Company named as “MALWA HOSPITALITY PVT LTD”.
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Yatra Capital Invests in Bangalore Real Estate Projects

Yatra Capital has invested nearly Rs 175 crore in Bengaluru-based property developments. It is Euronext listed real estate investment company. Yatra Capital has invested Rs 111.62 crore in Palladium Constructions for 30 percent stake. Palladium Constructions will develop a complex which will have both residential and retail buildings. It will develop a 1.9 million square.feet of mixed use complex. This development will comprise of 1.4 million square feet of retail space and 0.5 million square feet of residential space. This project will cost around Rs 950.12 crore. Read More »

Pacific Star to raise $2 Billion for Asian Real Estate

Pacific Star, a Singapore-based Asian Real Estate Investment house, says it is raising $2 billion for its new Asia Fund Select Concept Fund. The fund will be the first of its kind in real estate investment, being open-ended and targeted at institutional global investors.

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India- A preferred Real Estate market for Global Investor

According to a survey conducted by the Association of Foreign Investors in Real Estate (AFIRE) India is one of the most preferred property market among foreign investors globally.

This report is from January/February 2008 (AFIRE) news letter. India is preferred by 16.7 per cent of the respondents favoring the country as the most fancied place for real estate investments. In the survey, although the US was named the top ranking country, China and India placed a strong second and third.

Compared to 2006, China had the biggest improvement in investor’s perceptions, moving seven percentage points, while India slipped by almost two points. To be read along the lines is JP Morgan (One of the largest investment banks in US) plans to invest 1500 Crores in real estate projects in india.

DLF will invest $5 Billion to Build Hotels in India

March 28 –DLF Ltd, India’s biggest developer, will spend $5 billion in the next seven years to build about 125 hotels in the world’s fastest-growing tourist destination.
In Delhi Rajiv Singh vice chairman of DLF Ltd. said in an interview that DLF plans to build 25,000 rooms including 4,000 in the first three years.
Spending and investment on travel and tourism will rise 9.4 percent annually in the next decade, according to the World Travel and Tourism Council of India, Asia’s third-largest economy, needs 100,000 rooms and 10,000 to 15,000 are being developed each year, U.K.-based Hogg Robinson Group Plc said last month.
“There is tremendous opportunity because there is a very large shortage today,” Singh said.
DLF has a joint venture with Hilton Hotels Corp., the second-largest U.S. lodging company, to develop 75 properties. DLF purchased Aman Resorts Group in November, giving it control of more than 22 properties in 12 countries. Aman Resorts will open a hotel in New Delhi this year.
The number of five-star luxury rooms will increase to 58,000 in India’s 12 biggest cities in five years from 27,500, Crisil Ltd.’s research division estimates. The average occupancy will drop to 64 percent from 75 percent, it said.
Room tariffs at luxury hotels will rise to 11,700 rupees ($300) a night by the year ending March 31, 2012, from 3,960 rupees in the year ended March 31, 2003, Crisil said.
Building hotels also raises the value of real-estate developments.
“It seeks to enhance the value of our other asset classes,” Singh said.”

“We find that a hotel in an office park or luxury housing around it actually makes that product work better.”

Pay More For A Dream House In Goa

To fulfill a dream to own a beach-side home in Goa has just become costlier. In the budget for 2008-09, the state government has increased stamp duty on property from the average 2 percent to varying rates depending on the value of the property. Read More »

Noida Invites bids near Taj Expressway

Bids have been invited by the Noida Authority To set up nine hotels nears the Taj -Agra expressway. The authority has a plan to set up three 5-star, four 3-star, and two 4-star hotels in this project.

This bid is going to open on April 24 with a reserve price fixed by the authority of 77,000 rupees($1,919) a square meter (10.76 square feet). The plots for five-star hotels have an area of 24,000 sq meter.
As the economic growth and rising salaries of individuals and companies are on the boost, demand for the houses, hotels and offices are expanding as well. The NCR regions of New Delhi such as Noida, Gurgoan, Ghaziabad and Faridabad are expanding as the lower prices are attracting a lot of buyers.
Developers BPTP Ltd won a bid for 95 acres of land for shops and offices at Noida for 50.1 billion rupees earlier this month. They offered to pay 130, 207 rupees a sq meter as compared to the reserve prices set by the Noida Authority of 77,000 Sq Meter.India’s two biggest real estate companies such as DLF Ltd and Unitech Ltd developers announced to build houses along with hotels, shops and malls. DLF are planning to open 75 hotels in India in five years.

Realtors’ New Business Strategy-Luxury Homes

As home sales continuously going downward, real estate developers are changing their strategy and showing more interest in luxury home segment by targeting non-resident Indians and high net worth individuals keen on buying that exclusive villa in India. Such business strategy also seems to be supported by market as demand in the luxury home segment is growing sharply. Read More »

Deteriorating IT Boom Affects Real Estate

Slowdown in IT/ ITeS sectors is effecting real estate firms. Lease of office space to software and BPO firms have fallen by over 30 percent. The trend is particularly bound to affect firms like DLF and Unitech which are building several software SEZs (special economic zones) across the country. Unitech executive said that till just eighteen months ago, software firms booked additional space two years in advance. Now, they are not even occupying the space booked a year ago. A DLF excutive, in charge of selling space to IT firms says: The premium in lease rentals has evaporated and if the situation continues, rentals could actually weaken. Read More »

Buying Property In Goa Might Be Difficult For Foreigners.

Chief Minister of Goa, Mr. Digamber Kamat said that his government is seriously considering regulating the sale of property to foreign nationals in the state. The Goa government is working out on a bill to tense up the control on sale of land to foreigners. On this issue, Mr. Kamat said, “It’s not yet a cabinet decision but we are all concerned about how the image of Goa is being ruined in the wake of certain incidents involving foreign nationals”.

While Law Minister Dayanand Narvekar has announced that the government has decided to ban foreigners from buying properties in Goa, the ground reality may be different.

Mr. Narvekar told in a press conference,“The government has decided to bring in the Legislative Assembly an amendment to Section 22 of the Registration Act, which will empower the State government to ban the sale as part of its public policy”. But he elaborated by saying that registration of sale of land to any foreigner henceforth will require clearance from the Reserve Bank of India. However, Foreign Exchange Management Act (FEMA) does not mention that an NOC is necessary for buying property.
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Vishal Retail to enter Real Estate

Vishal Retail is planning to enter real estate sector. Confirming this development Manmohan Aggarwal, CEO, Corporate Affairs, Vishal Retail told Business Standard that the new venture would be launched either in the second half of the current year or early next year.
He revealed that company is also planning to acquire 1 crore sq ft area in next three years which would partly be used for expanding the retail businesses and rest for real estate purposes.
The project is in formulation stage and would take time before it is launched. Meanwhile, Vishal Retail today also announced opening of its 92nd retail store at Pinjore today.
The company aims to open 100 stores in the FY07-08 with new stores in Chandigarh, Mohali and Manimajra.
Having achieved a growth of 100 per cent in the current financial year, Bajaj said that Vishal Retail was looking forward to acquire 25 lakh sq ft area by December 2008 to expand its retail chains. The Vishal Retail at present has 20 lakh sq ft areas in which it operates its different retail operations. The retail operations are spread in 62 cities across India. At present it has 90 hypermarkets and 3 Fashion Marts.

Yoo By Starck And Panchshil Realty To Develop Prestigious Yoo Project in Pune

European real estate giant Yoo by Starck expands into Indian real estate market, designing their first project for India, which will be developed by Panchshil Realty. The proposed condominium project will locate in Pune, which is on a few hours drive from Mumbai, India’s commercial and financial capital. In India, luxury projects are high on demand and property buyers and investors interested in branded projects can now enjoy international brands and lifestyle.

New GOI guidelines for FDI duck Real Estate

The government today issued guiding principle on big-ticket transforms to the foreign direct investment (FDI) norms that were decided by the Union Cabinet on January 30.

It, however, remained quiet on clarifying a change in rules for FDI in real estate, maybe due to fear of larger capital inflows.

The move to delink the FDI provisions from investments by foreign institutional investors (FII) in real estate under the portfolio investment scheme was predictable to lead to better stock market play in real estate scrips.

A press note could not be issued. An official told that it is not clear why the Cabinet has not cleared the proposal to de-link FDI and FII norms (in real estate).

Interestingly, on the day the Cabinet met to grant the changes, a plain-paper background note distributed by the government said the Cabinet had approved a explanation that FII investments would be distinct from FDI and be outside the purview of press note 2 (2005).The de-linking conditions were suggested by the DIPP.

BPTP Bags India’s Biggest Land Deal In Noida

Delhi-based Business Parks and Town Planners (BPTP) bagged a 95-acre commercial plot at Sector 94 in Noida for incredible Rs 5006 crore from the Noida authority. It is strategically located close to Delhi. It will be around 16 km from Connaught Place and around 10 km from south Delhi via the DND flyover. Read More »

Heat Of Rising Interest Rates

New Delhi, Mar 10, 2008. When finance minister Mr. P Chidambaram has decided for decreasing home loan rates for the loan of less than Rs. twenty lakhs, many other sectors facing the heat of rising interest rates.

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Harvard eyes Indian realty sector with corporate programme

Eyeing the “explosive” realty market in India, the Harvard Business School (HBS) is set to offer a short duration certificate programme to top executives of real estate industry – but at a stiff fee of Rs.297,000 ($7,310). The Ivy League university will offer the four-day-long programme at Hyderabad Convention Centre beginning June 17.

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ASSOCHAM for at least 3 SEZs in Goa

Margao, March 7 The Associated Chambers of Commerce and Industry of India requested the State government to reconsider its decision on Special Economic Zones and advocated creation of at least of three SEZs, in Goa.

Three SEZs in bio and nano-technology, food processing and solar energy will help Goa attract investments up to Rs 50,000 crore and generate jobs for at least 20,000 youth, in next three years, ASSOCHAM said.

Addressing a press conference, on Friday, ASSOCHAM president, Mr Venugopal Dhoot said that SEZs in bio and nano-technology, food processing and solar energy would not require much land. Secondly it would help the state to prosper economically by attracting huge investments besides providing employment to the youth.

Mr Dhoot said that the controversy on SEZs on IT seems to be justified, as large amount of land was sought to be acquired in the name of IT. But if SEZs in bio, nano and food processing was created it would benefit the state, he added.

The ASSOCHAM president, who is also the chairman of Videocon Industries Ltd, further disclosed that Videocon has purchased around 35 acre of land in the state, near Karmali railway station, at Old Goa.

He said his company was planning to set up a knowledge based industry and a manufacturing unit, in the state.

Omaxe defers mega fund-raising plan

Delhi-based real estate developer Omaxe has postponed its plan to raise Rs 1,500 crore through private placement until a favourable time.

This follows Unitech’s decision to put on hold $1.5-billion qualified institutional placement (QIP), and Emaar MGF’s initial public offer (IPO), which was withdrawn midway. Industry insiders say the delay in fund-raising plans is unlikely to have any immediate impact on earnings.

Mr. Vipin Aggarwal, Executive director, Omaxe, said “We are waiting for the market to stabilize before we go in for private placement. We may not get the right valuation in the present situation”. Omaxe had originally planned to raise Rs 1,500 crore by issuing fresh equity to institutional investors.

The company intended to use the sale proceeds to buy land. On that issue, Mr. Aggarwal said, “The stake sold through this process could have been close to 15%”. At this rate, the transactions could have given Omaxe a valuation of Rs 10,000 crore, close to the company’s market capitalization during mid-December.

The Omaxe stock price had touched a high of Rs 613 on December 13, 2007, on BSE. It has lost almost two-thirds of its market cap since then. Omaxe scrip closed at Rs 221.60 on Wednesday on BSE, 5% down from the previous day’s close.

The promoters, Rohtas Goel and family, hold 89.3% stake in the company. Last December, the promoters pledged their 15% stake to Indiabulls for Rs 300 crore.

The company is engaged in developing several group housing, integrated townships, shopping malls, multi-product SEZ and hotels. It has recently won the bid to develop 393-acre township at Naya Raipur, Chhattisgarh, at a cost of Rs 1,800 crore.

Asipac to launch real estate fund

BANGALORE: Realty marketing and consultancy firm Asipac Projects is close to putting together a real estate fund, in association with a few institutional investors. The move by the company , aimed at widening the scope of the company’s services is part of a series of initiatives that will roll out in the coming months.

According to Bangalore-based Company, the first fund will have an initial amount of Rs 50 crore and will invest in real estate SPVs across the country. “The first fund should be in place in six months. We intend to invest small amounts into SPVs, picking up a 2-3% stake in specific projects,” said Asipac Project’s chairman Amit Bagaria.

Year 2008 will see the company launch two new strategic business units (SBUs) — an investment advisory services group and a construction management consultancy division. “The idea is to be an end-to-end consultancy services company, helping clients (realty firms) raise funds for as well as help reduce material procurement costs,” said Mr Bagaria.

As on date, Asipac Projects represents about 18 real estate firms. The company is also seeming to expand its services to Indian business houses that are in the process of unlocking value from their land holdings.

The Paul Hotels and Resorts to develop South Indian hotel

The Paul Hotels and Resorts plans to develop a five star hotel chain in South India. As part of the first stage, the group will develop business class hotels or resorts across Karnataka, in locations such as Bengaluru, Mysore, Hampi and Coorg.

According to Shelly Thayil, Director – Operations, The Paul Hotels and Resorts, the group wants to tap the state’s immense tourism potential. In addition to this, the Karnataka Government is keen on providing the investors with incentives.

The group has acquired five acres of land for a 180 room hotel in Mysore. It will be developed with an investment of Rs 150 crore. The group is in the process of sourcing 30 acres of land for its 75 suite heritage property in Hampi. It will be developed near the Tungabhadra river at a cost of Rs 30 crore (in the first phase).

The Paul Hotels expects both these properties to be operational within the next two years. “We develop all our properties in phases, as this gives us enough time for trials. This model also helps us to work on our guests’ feedback, after which we make the necessary changes,” offers Thayil. Commenting on the tax holiday for hotels in UNESCO-certified heritage sites in India, Thayil feels that this announcement has come at the right time. The Hampi property is in the drawing board stages.

DLF plans to invest up to Rs 4,100 cr

Leading real estate firm DLF on Wednesday said it plans to make investments up to Rs 4,100 crore, including Rs 200 crores for setting up an asset management company.

The firm would be investing Rs 1,550 crores in DLF Limitless Developers Pvt Ltd, it said in a filing to the BSE.

Further, an investment of Rs 200 crore each would be made in the proposed asset management firm and a trustee company. Read More »

Mega property Show At Hyderabad

Real estate in Hyderabad is witnessing a boom and the demand for residential & commercial properties has taken a quantum leap. Hyderabad is fastest growing cities in India is experiencing a rapid need for enhancement in infrastructure.

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Acacia buys $69m stake

MANAMA: Acacia Real Estate Limited has obtained 49 % of an Information Technology Park in India.
Logix TechnoPark is located in Noida – a master planned city adjacent to Delhi. Acacia is the real estate company that Bahrain-based TAIB Bank spearheaded in December 2006.
Total acquisition cost was $69 million. With a projected internal rate of return of over 24pc per annum, the deal was structured to provide investors with downside protection and an average cash coupon of 8pc per annum over a three-year holding period.
TAIB Bank is the exclusive placement agent for the project.
The property, along the Greater Noida Expressway, consists of four newly built 100pc occupied office towers with a total gross leasable area of 461,120sq/ft. It is currently leased to such strong tenants as Oracle, Mentor Graphics, Conexant Systems and SafeNet InfoTech.
“We are proud to be able to offer our clients this unique opportunity to invest in India’s real estate market,” said Acacia executive committee board member and TAIB Bank chief executive and vice-chairman Iqbal Mamdani.