Monthly Archives: April 2008

JP Infrastructure Pvt Ltd Is Ready To Issue Public Offer

Ahmedabad-based realty player JP Infrastructure Pvt Ltd (JPIPL) is in initial phase of talks with a foremost PE fund to raise around two hundred crore. The company is also planning to come out with an initial public offer and had selected Cushman & Wakefield in December preceding year for valuation of its assets.
According to a source the realtor is seeks to divest about ten per cent. The company will have 6 months to one year time to come out with an IPO while making way for the PE firm to exit. In the meantime, it is planning a big township project in Ahmedabad, retail malls in Vadodara and Surat, corporate park in Lower Parel in Mumbai.

Super luxury apartment complex planned in Kochi

KOCHI: Dewa Projects Private Ltd., a venture promoted by a group of NRIs based in Kuwait, will build a super luxury apartment complex on Marine Drive in Kochi. K. Venugoplan Nair, chairman of the company, said the project would set new benchmarks for residential property.

The apartments will have a 10-year warranty. Kitchen, bathroom fittings, doors and other fittings would be provided by top companies in Germany, Italy, Australia and Canada. The complex will have six towers comprising 400 apartments surrounded by four acres of landscaped garden. It will have a quake-resistant structure. The price of a three-bedroom apartment will be more than Rs.3 crore.

The company has substantial real estate holding in major cities including Bangalore, Chennai, Thiruvananthapuram and in the Andaman & Nicobar Islands.

The company was investing Rs.3,000 crore for the Kochi project. , which would be completed by 2011. It had conducted a study which revealed that Kochi had high potential in the real estate sector. Luxury apartments were in short supply, Mr. Nair said.

Indian regulator allows fund houses to start real estate mutual funds

MUMBAI – Indian market regulator, the Securities and Exchange Board of India (SEBI), said it has amended the regulations to allow domestic fund houses to start real estate mutual funds (REMF) in the country.
In a release, the regulator said however that existing mutual funds have to fulfill certain conditions, such as having an sufficient number of specialized key personnel on the board of directors and a lock-in period for these funds to stay invested in the real estate fund business.
According to the guidelines issued by SEBI, the funds have to invest a minimum of 35 percent of the net assets of the scheme directly in real estate assets while the balance can be invested in mortgage backed securities, real-estate company issued securities and other securities.
Taken together, investments in real estate assets, real estate related securities — including mortgage backed securities — shall not be less than 75 percent of the net assets of the scheme, the regulator added.
SEBI also said the REMFs would not be allowed to invest into any real estate asset owned by a sponsor or the asset management company or its associate company during the five year lock-in period.
There will also be a limit on the investment in a single city, project or securities issued by the sponsor or associate companies, the regulator added.

Kolkata to host Oliver Kahn’s farewell match

NEW DELHI, April 24: Kolkata based Real Estate major, Bengal Peerless Housing Development Company Limited on 24th April 2008 got the permission from Indian Football Association to organize a Grand Football match between FC Bayern Munich and Mohan Bagan Club on 27th May, 2008 at Salt Lake Stadium, Kolkata.

Oliver Rolf Kahn, the famous German football goalkeeper, will be playing his farewell match on the same day making it one of the greatest matches in the History of International Football.

On this occasion Mr. Kumar Shankar Bagchi, Managing Director, Bengal Peerless Housing Development Company Limited, said,” We are privileged to partner with the IFA to bring in the FC Bayern Munich team for the first time in India to play with Mohan Bagan, one of the oldest clubs in India.”

Talking at the event Mr. Utpal Ganguli, Secretary, Indian Football Association added, “We consider it to be an honour for Indian Football Association to be a part of the Farewell football match of Oliver Kahn to be held in Kolkata. We really look forward to make this match one of the Greatest ever played in the entire Football history.”

Free education for kids of construction workers

Zirakpur, Chandigarh, April 24 : The Piya Charitable Trust and Foundation, Chandigarh, has taken the initiative of providing at no cost primary education to the children of construction workers in Savitri Enclave at Zirakpur.
In addition primary education, it also make available healthcare facilities, nutritious diet, study material, uniform and vocational training for the rehabilitation of street and slum children. H I S Grewal, Deputy commissioner, S A S Nagar, announced a grant of one lakh to the NGO.
Sudha Sharma, Chief commissioner of income tax (retd) had taken the initiative of forming a trust in the name of her younger daughter, Piya, who lost her life in a road mishap, at the age of nine. She is being aided by her elder daughter, Puja Sharma and the wife of DGP (retd), Jagat, Kiran Jagat in running the NGO since the last 9 years.
Project director, Puja Sharma said the flourishing real estate business has provided jobs to migrant labourers in abundance.
The NGO provides benefit to nearly One hundred fifty slum children in Panchkula and thirty children in the Silver City. She said the trust has fifteen paid staff members besides dozens of friends who help voluntarily.

Double whammy for high-end luxury realty market

The high-end luxury real estate market is facing a double whammy. The demand from domestic buyers has already dried down and now even non-resident Indians (NRIs), who constituted a significant market for luxury real estate developers, are developing cold feet.

With the US property market witnessing a correction due to subprime crisis, the NRIs are expecting the same to happen in India and are holding back on their purchases. Read More »

Real Estate Management Course In Kolkata

KOLKATA, April 23: With the real estate boom in the country, St Xavier’s College in alliance with CREDAI(Confederation of Real Estate Developer’s Associations of India), Bengal is planning to launch a one year post graduate diploma course in real estate management very soon. The college previously runs a six-month certificate course on real estate management.
This is the first time that St Xavier’s has launched such a course in the city catering to the requirement of people from different occupations. With an reasonable fee structure of Rs 15,000 one can get the certificate course. The fee for the post graduate diploma course would be announced in the first week of May.
“The first batch contain 19 students in the certificate course, who seek to enter this sector and we are planning to enlarge the batch size up to 30 in the next session scheduled to start in July,” said Prof Ashish Mitra, a faculty member of the certificate course.

Mahindra To Develop Mahindra World City, near Chennai

Mahindra Lifespace Developers, the real estate company of the Rs 18,000 crore Mahindra group, has entered into a joint venture with private equity fund ARCH Capital Asian Partners to develop a residential township at the Mahindra group’s special economic zone, Mahindra World City, near Chennai.
The Mahindra group will have a 51 % stake in Mahindra Residential Development, the JV company and ARCH Capital will hold 49 %.
The project, on fifty acres, will have seven hundred fifty residential apartments apart from retail and recreational facilities. It did not disclose financial details, pending the announcement of its financial results.
Mahindra World City, being developed by the Mahindra group and the Tamil Nadu Industrial Development Corporation (TIDCO), has three sector-specific SEZs for information technology, auto ancillaries, and apparel & fashion accessories.
Mahindra Lifespace recently signed an agreement with the Board of Investments of Sri Lanka to develop a sixty five acre SEZ in Sri Lanka.
Mahindra Lifespace has a land bank of nearly five million sq ft and is developing two other Mahindra World Cities at Pune and Jaipur.

Lodha SPV gets 250 crore from HDFC funds

The Mumbai-based real estate developer Lodha group said on Thursday it has received Rs. 250 crore investment from the HDFC sponsored real estate fund in one of its special purpose vehicle (SPV) in Hyderabad.

Under the transaction, the HDFC funds will buy 45% in Lodha’s SPV for development of the group’s luxury residential and commercial project in Hyderabad. This will be the fourth investment in the group by PE funds who have so far invested in excess of Rs 2,400 crore. Trustcap, a Mumbai based investment banking firm acted as the sole advisor to this transaction. Read More »

Hilton Group is coming back to India

Mumbai, Apr 16 With the end of its association with The Oberoi group, Hilton Hotels Corporation is on top gear to make a comeback in the Indian market. The company today has not even a single property in the country courtesy the fallen apart tie-up with The Oberoi Group. Now, left all alone in the burgeoning industry, Hilton is firing from all cylinders.

The hospitality group is not only looking at bringing a full bouquet of hotels, better called – The Hilton Family of Hotels – to India but also partnering with more than one real estate company. “We are in negotiations with real estate players in the country,” said a source close to the development. Hilton has a joint venture with real estate company DLF Limited for setting up hotels in the country called DLF-Hilton Hotels, which became the reason behind the end of a four-year-long relationship between the Oberoi Group and  the Hilton.. The alliance between The Oberoi Group and  the Hilton came to an end on April 1, 2008.

Hiranandani Constructions Is Ready For Hospital Project

Niranjan Hiranandani owner of Hiranandani Constructions, is planning to set up a chain of hospitals in the country.
The total investment in these projects could be approximately five hundred crore. The company plans to become a foremost healthcare player in the next five years, sources said.
The real estate foremost is planning to set up new hospitals at its forthcoming townships in Chennai, Pune, Nasik, Panvel and Kolkata among others. The hospitals, all with over a one hundred bed capacity, will be called Hiranandani Hospitals.
According to market sources, the Hiranandanis are planning to take on corporate hospital chains like Wockhardt, Apollo and Fortis.
However, the company’s managing director, Niranjan Hiranandani, said they are still assessing whether to set up corporate hospitals or to position them as charitable ones.
“Our idea is to set up five hospitals at our townships in the subsequent five years,” Hiranandani said. The company has also coupled up with Fortis group: According to the deal, Hiranandani will build hospitals for the group. Fortis, to mark its entry in Mumbai, took over the group’s hospital in Vashi a few months ago.
Dr L H Hiranandani hospital, set up by the group at Hiranandani’s Powai township, is currently undergoing expansion, to double its capacity from the existing one hundred thirty five beds to over two hundred thirty beds. The development will involve investments between approx hundred crore, sources said.
Sources also said the success of the Powai hospital prompted the group to consider a nation-wide presence. The Hiranandanis also have a hospital in Thane.

LnT To Develop Bombay Dyeing Complexes

Larsen & Toubro is planning develop nine million square feet at Bombay Dyeing & Manufacturing Company’s Textile Mills and Spring Mills complexes at Worli and Wadala at a cost of Rs two thousand crore.
Mr K.V. Rangaswami, Director and President (Construction), L&T, said that it would be an all-commercial project, comprising retail, IT and hospitality space, with no residential component in it. Read More »

Realty Majors Adopt New Technologies for Affordable Housing.

To make their project affordable, real estate developers are applying new techniques everyday. For example, tunnel form technique, table form technique, fly ash technique and so on.

Read More »

India Top Destination for Retail World

In a fresh survey, three hundred global retailers, representing a global portfolio of around twenty five thousand stores, who are looking to expand outside their domestic markets, have recognized India as the most sought-after retail destination..
The survey was conducted by London-based C B Richard Ellis, a leading real estate services firm, to get latest insight into retailer attitudes towards the world’s emerging retail destinations.
The report suggest that forty percent of the surveyed retailers believe emerging markets to provide their main source of growth over the coming five years. India is considered particularly attractive due to the size of its market compared to its low presence of international retailers.
‘With foreign rights rules being gradually relaxed, foreign investment is also now probable allowing single-brand retailers to own up to 51% of their India operations,’ notes the report.
Ukraine, Russia, Malaysia and Turkey followed India in this ranking. 27% of the surveyed retailers opened their first store in India last year or are planning to do so soon.
Neighboring China and Pakistan were ranked 8th (11%) and 11th (6%) on the list.

Real Estate Developers Want Steel Price Hike Probed

Mumbai Real estate developers on Friday demanded an inquiry into the rise in steel prices and warned that if the prices were unchecked, plans for the Commonwealth Games 2010 would be hindered and would hit the residential construction business. Members of the Builders Association of India (BAI) met here and sought a probe by the directorate general of commercial intelligence wing to ascertain the reasons behind the “unprecedented steel price increase from 2004 till March 2008 and more specifically after the Union Budget 2008″. Read More »

Impact Of Rising Interest Rates On Real Estate

Growing real estate prices are resulting in a decline in the demand for home loans. The rising interest rate is a additional factor.
Even though Indian realty market is observing a compounding growth, owning a home is still a tough dream for a lot of middle class Indians. Previously (2002-2006), the trouble-free availability of home loans was accelerating the realty growth drive. But, there is now considerable decline in the demand for home loans in India. Main banks have blamed the rising property rates as a cause for this cut. According to the current survey, the prices of furnished and semi-furnished houses in the metros and upcoming metros are becoming sky scrapping day by day.
The increasing real estate prices are not the only factor for this decline. However, the decline has been attributed further to the home loan interest rates that have been increasing incessantly for the earlier couple of months. As per the current details of Associated Chambers of Commerce (ASSOCHAM), rise in these loan rates severely affect the housing sector.

The growth of this sector has droped to 26.6 percent in 2006-07 from 29.1 per cent in 2005-06. The interest rates on home loans rose from 7 percent in 2002 to 12-14 per cent in 2007. This rate has made both lending and borrowing largely unaffordable.

Munjal Family Ready For Real Estate Business

NEW DELHI: The Munjal family, known for the two-wheeler business, is planning for real estate business. After announcing a tieup with the world’s largest commercial vehicle maker Daimler, the company has lined up major plans in the real estate sector that comprise developing residential townships, industrial parks, hotels, resorts and leisure centers all over the country.

According to the group head Brij Mohan Munjal his revenues exceeding $3 billion. “We are working on several projects around the country in the real estate area and plan to enlarge in a big way,” Sunil Kant Munjal, son of Brij Mohan, told TOI.

According to one member of group the initial investments in the real estate venture will come from the Munjal family. It has been observed that potential investors , bankers and private equity players are very much interested in the plan.

A new project of the real estate diversification is coming up around Hero Honda’s new Haridwar factory. Arrow Infrastructure, a new company, will develop township and industrial park around the plant, and this is one of the many projects that are in the pipeline.

Apart from the project at Haridwar, the group is developing an IT park at Gurgaon while looking at resorts development in Himachal Pradesh and residential townships in Punjab.

Elaborating on township plans, one member of the group said the company would provide housing options across price points. “Our idea is to provide mid-level to high-end housing and price points on the lower side could be even less than Rs 20 lakh.”

How To Find Right Price Of Your Dream Home

It is the fact that land price varies with locality but the extent it is varying, is unbelievable. The price of a house at Malad, a Mumbai suburb, is Rs 3000 to 6000 per square feet; whereas, the price of the same at Vasant Vihar (Delhi) is Rs. 19500-32000. It is enough for confusing buyers and sellers. Read More »

K Raheja Corp Forms JV With US Based Trologis

Real estate developer K Raheja Corp and US-based Trologis said on Wednesday that they had formed an equal joint-venture to develop warehousing and logistics infrastructure in India.

Both companies said after joint venture that the JV will invest Rs 23 billion to develop 7.5 million square-feet over three years for this business and will initially focus on projects in the four metros, Bangalore and Pune.

Big Dreams Stifle Small Nests

For prospective real estate buyers in the state capital, thinking big seems to be the guiding light, at least when buying apartments is concerned.

The new concept of one-BHK flats in Ranchi has failed to attract customers, leading developers to shelve many such projects. The “revolutionary” projects were supposed to provide reasonably good accommodation at a reasonable price of Rs 5-7 lakhs. Initial surveys pegged a good demand of these kind of housing, more so when the state capital has of late been witnessing a boom in finance, private banking and the industry sector with company executives expected to buy these temporary accommodations instead of preferring the rented ones. Read More »

Forbes Predication For Real Estate

“Forbes” states that although the global real estate market is softening as credit reservoirs dry, a few spots are poised for growth.” The magazine rated Israel as the world’s most “up-and-coming” real estate market.
“Forbes” notes, “Israel’s real estate market struggled in the late 1990s and early 2000s as the country struggled with deflation. As late as 2006, market weakness had pushed prices down four percent, according to Knight Frank, a London-based real estate research company. But previous year prices climbed two percent. That is expected to continue, given the country’s robust five percent growth in gross domestic product and approx four percent projection for this year, according to the International Monetary Fund.”

Country Club Pride of Hyderabad acquiring properties in Dubai, Bangkok

Hyderabad-based Country club ltd. is now ready to expand its horizon through getting hold of properties in Dubai and Bangkok.
People close to the deal told Business Line that Country Club is in advanced stages of negotiation to buy an existing hotel property in Dubai. The sources said that the price of property will be near about Two Hundred crore. For the same the company may seek loans from local banks for up to Seventy five percent of the cost.
However, when contacted, Mr Y. Rajeev Reddy, Chairman and Managing Director of the company, refused to comment on the development, saying, “We are in an acquisition spree, and that is all I can say at present.”
The company recently mobilised Rs 486 crore through GDR/QIP issue priced at Rs 770 per share. Institutions such as Fidelity Investment, Goldman Sachs and New Vernon picked up 9.88, 6.59 and 4.94 per cent stake respectively. Of the mobilised funds, it has so far spent around One hundred twenty five crore on acquiring properties in various cities in the last couple of months, with the recent one being a three-acre property with a built-up area of 40,000 sq.ft on East Coast Road in Chennai for a consideration of  sixteen crore.
Prior to that, it took over an existing club at Khandivili West in Mumbai for Rs 25 crore. The company is also scheduling to invest another Thirty crore in developing and modernising these properties.

Prozone sells 27% to Realty Fund

MUMBAI: City based real estate developer Prozone Enterprises has sold a 27% stake in its subsidiary to Triangle Real Estate India Fund for a total consideration of Rs 457 crore. The subsidiary holds stake in four projects that are being developed in Aurangabad, Indore, Nagpur and Jaipur covering approximately 16 million sq.ft.

Prozone Enterprises, is a joint venture between apparel maker Provogue (India) and UK-based Liberty International. Prozone’s arm is developing commercial complexes which would include retail, entertainment, food courts, cafes, restaurants, fine dining, hotels and convention centres.

There have been concerns that the high real estate prices in the country is a bubble. Yet, this deal highlights that investments from foreign companies including real estate funds are continuing unabated. Triangle Real Estate India Fund is co-promoted by ICS group and Old Mutual Investment Group Property Investments, the property division of Old Mutual. In India, Old Mutual is well known as Kotak Mahindra’s partner in the insurance business.

ICS, on the other hand, offers a range of property services together with architectural design services, mall management services and car park management.