Monthly Archives: May 2008

Boulder Hills Golf And Country Club By Emaar MGF In Hyderabad

Emaar MGF Land Ltd, one of the leading real estate developers in the country has launched ‘Boulder Hills Golf & Country Club’- an integrated world class leisure and residential community in Hyderabad. The Rs 5,610-crore project will have residential, commercial and retail space, IT parks and special economic zones, luxury and boutique hotels. It will be constructed by Multiplex Construction India Pvt Ltd, a 50:50 joint venture company floated by Emaar MGF and Multiplex Ltd.
Talking at a press conference during the launch of the project here, W. R. Rattazi, chief executive officer of the company, said, “It is a landmark project for the company in south India.” This project, which is spread across five hundred thirty one acres of land, is south India’s first integrated world class leisure and residential community with an eighteen hole golf course. The one hundred ninety two acre golf course has been designed by Peter Harradine – a third generation golf course architect. It is a championship golf course.
“Plans are on to host the European PGA Men’s and Ladies events at the world class golf course,” he said.
In the first phase of the project, the company would be developing seven hundred three residential units with a mix of single and multi family units. It is likely to be ready within the next three years.
The project has already been well received in the market, so much so that the premium apartments and luxury villas that are being planned within the project have already been sold out, he added.
The company is presently doing eight different projects in the South. “Over the next few years, we plan to develop 31 million sq ft across ten locations in south India with a planned investment of three billion dollar. Already the company has a land bank of 1,500 acres in the south in places like Hyderabad, Tirupathi, Chennai, Coimbatore, Kochi, Mysore and Mangalore”, he said adding all over India, the company has a land holding of 13,000 acres.
In the next 4-5 years, Emaar MGF will spread its wings to 40 cities from 26 cities right now.

Realty Scrips Have A Long Way Ahead To Recovery

For all the talk about a slowdown in the economy, real estate prices in most parts of the country have not corrected as much as most prospective buyers would have liked them to. But, shares of most real estate companies are not finding any takers even after falling nearly 50% from their record highs in January this year. Read More »

Adidas Will Expand Business In India In 2008

Sports brand Adidas has pronounced strategy to add One hundred twenty five franchise outlets to its India retail network in 2008.

As said by Andreas Gellner, managing director at Adidas India Marketing, the count is set to rise to four hundred fifty by the end of the year, from the existing count of three hundred twenty five and will come up both in small towns as well as bigger cities.

Gellner also confessed that strengthening real estate prices have impacted Adidas’ plans in India, and that the prevailing rentals were nowhere near realistic.

The retail industry can support a maximum rental cost of around 15-17 % of its return per square feet.

However, existing rentals are over the 20 % per square feet, going up to 40 % per square feet in some cases. Therefore several retailers have shelved or scaled back their expansion plans, for want of cost effective retail space.

Adidas’ sales in India have developed at 30 % yearly for the last 4 yrs, and Gellner said the company is hopeful of the sales rising 30-% this year.

Property Investors Look To India

As house prices in the West Midlands fall at double the UK average during the credit crunch, local property investors are looking to new markets for opportunities.

One of these markets is India, which is being tipped by many as an emerging property hot spot. Merrill Lynch has predicted a 700 % increase in the Indian property market by 2015.

A seminar at the Hotel Ibis in Birmingham city centre on Wednesday will provide a glimpse into the opportunities which could become available. The seminar, which begins at 7pm, is being hosted by – a company that highlights investment opportunities in the most up-and-coming areas of India to the UK.

It will offer potential investors advice on how they could benefit from investing in India’s thriving housing sector.
Information will be provided on the Indian economy and the sustainable factors driving its rapid growth. Also highlighted will be the areas likely to give the greatest capital appreciation on investment.

India’s strong economic growth reflects the profound changes occurring in society. Over half of India’s current population is under 25, giving it the world’s largest population of workers and consumers by 2020.

Increased urbanization and modern young Indians preferring to live on their own means demand for housing has never been higher. Mortgage lending increased tenfold between 2000 and 2005 yet the ratio of mortgages to GDP remains low, a significant factor in the massive potential which could be available. managing director Andrew Fassnidge said: “The seminar will show both UK investors and Birmingham’s 55,000 non-resident Indians how easy, effective and profitable investing in India can be.

“All the economic indicators project a bright, sustainable future for India. In the last 2yrs alone, property prices in India increased by 70 %.”

Market analysts have said that investors looking to escape the slowdown of the US and Europe then the sub-continent could be their best option.

Around 300 million middle class people are expected to be living in India by 2010 – higher than the US – while economic growth is expected to grow by eight per cent until 2020.

Airport Upgrade To Open Up Mega Retail Space

The Mumbai airport’s upgradation will open up a humungous 5.7 crore square feet or about 132 acres of real estate, exclusively for non-aeronautical purposes like retail, commercial and hospitality. The area is mainly around Sahar village, Kurla and Kalina.

According to a Cushman & Wakefield report on Airport Realty, the modernisation and upgradation of 47 airport projects across the country is expected to generate 78 million square feet (1,790 acres) for commercial purposes by 2015. Read More »

Sub-prime crisis to lower investment in Asia’s property sector

The global sub-prime crisis will this year have the greatest impact on “mature” property markets in the Asia-Pacific region, leading to an overall decline in investments, international property consultant Jones Lang LaSalle predicted Tuesday. Direct commercial real estate investment in Asia Pacific reached a new high of 121 billion dollars in 2007, up 27 per cent on 2006, but prospects for 2008 are less rosy, said Jones Lang LaSalle.
Fallout from the sub-prime crisis, which started in the US, has been most evident during the first quarter of 2008 in more mature markets in the Asia-Pacific, such as Tokyo, Singapore, Sydney and Melbourne, where office capital values appear to have peaked, while a slowing in price growth is also likely for Hong Kong.
“As these markets account for the lion’s share of investment activity, we expect a decline in overall transaction volumes in Asia Pacific this year following the record result in 2007,” said Jane Murray, Head of Research – Asia Pacific at Jones Lang LaSalle.
But the sub-prime crisis will have a varied impact on the region’s property sector this year, said the real estate consultant.
In the office sector, a sharp slowing in rental growth is under way in Tokyo, while Singapore is seeing the beginnings of a softening in pre-let rates, and Shanghai has begun to brace itself for slowing demand in Pudong amongst its vital financial services tenants, said Jones Lang LaSalle.
But on the other end of the spectrum, the Manila office market has seen strong growth in business process outsourcing due to the increased emphasis by multinational corporations (MNCs) on lowering operational costs, it noted.
Another trend noted was that of MNCs moving their offices from central business locations to “cheaper peripheral sites.”
Singapore, for example, is seeing strong enquiry levels for built-to-suit options in business park locations, driving up rental levels in these districts.

Saffron Group Wants Foremost Place In Realty Funding

Real estate private equity firm Saffron Group on 25th may said it has chalked out a two-sided plan to become a leading player in the market staying put for a minimum 5 yrs in upcoming properties and buying out properties with assured rental income.
The Group, a brainchild of Ajoy Veer Kapoor and his peers from the banking society, is the promoter of Euronext listed Yatra Capital, an India-focused real estate fund. It has also launched Saffron India Real Estate Fund-1.
“Our plan is to be a foremost player in the field. We don’t have any short-term view. The industry is rising and it will yield better results for another 10-15 years,” Kapoor said.
Yatra Capital has already raised two hundred twenty million euro through two public offers and has invested almost 75 % of that in the Indian real estate market.
The Saffron India Real Estate Fund I, launched in Feb 2008, is raising a USD 350-450 million unlisted fund, with a hard cap of USD 500 million. It has done a first close on 3 Apr 08 with an anchor investment of USD 75 million from Standard Life UK. It is expected to close by the end of 2008.

VCFs, FVCIs Ready For Real Estate Sector

The real estate sector has hogged the attention among favored investment avenues for a host of venture capital funds (VCFs) and foreign venture capital investors (FVCI) during the preceding fiscal. Amongst different sectors, together with IT and telecom, real estate alone attracted twenty percent of the total investments made by both VCFs and FVCIs during previous fiscal. Read More »

RETV Has Appointed New CEO

On 21st many Real Estate TV (RETV), a round the clock channel committed to infrastructure & realty had appointed Prem Kumar Menon as a its CEO
Menon having twenty seven years of prosperous media and marketing experience and prior to joining Real Estate TV, he was working as COO of a media group in Chennai, the channel informed in a release.
In addition Menon, A. Nair has also joined the group as its News Head. Before this appointment A. Nair was working as business journalist in the Indian Express Group.
Real Estate TV is the Ist channel in the country comprehensively engaged in tracking developments in real estate & infrastructure.

Tata Group’s retail company to expand in tier-II, III cities via franchises

The delay in opening of malls, closure of retail complexes and surging property rentals, among others, have prompted Trent, the Tata Group’s retail company, to opt for the franchise route to open its Wesbside chain of department stores in tier II and III cities. Under the franchise deal, Trent will own and provide the stock to the franchises.

Trent has 30 company-owned Wesbside stores in Mumbai, Delhi, Kolkata, Lucknow, Baroda, among other cities. The stores, which sell womenswear, menswear, kidswear and cutlery, range from 15,000 to 30,000 sq ft each in size.

The company plans to open nearly 30 stores under franchisee route in the next couple of years in smaller cities, such as Allahabad, Patna, Guwahati, Madurai, Aligarh and Jammu. The franchise-run stores will be half the size of the company-owned stores at 8,000 to 12,000 sq ft, a Wesbside release said.

Neeti Chopra, head of marketing, Trent, said, “The company will own stores in top 30 cities and open stores under the franchise route in the rest of the cities. The franchise route will help us to overcome the property challenge in these cities and scale up our operations quickly. We will also get the first mover advantage in these cities, which do not have much retail presence”.

Trent and franchise holders will share profits from the stores at an agreed percentage. The company is expecting Rs 6 crore to 10 crore sales per store from the franchise stores.

Oversupply May Bring Home Prices Down

Knight Frank India, a real estate consultant company, predicts more correction in house prices if the existing slowdown in residential property sales keeps on, Chairman Pranay Vakil said. Read More »

Khaleeji raises $164m for India venture

Khaleeji Commercial Bank has collected $163.5 million of equity from investors across GCC for Danat India Investment Company.

Danat will invest in a real estate development project near New Delhi, targeted at the expanding middle class of India.

India, presently one of the foremost rising markets is predicted to be the world’s 3rd biggest economy by 2050, ahead of Japan, the UK and Germany.

In a statement Khaleeji Commercial Bank chief executive officer Ebrahim H Ebrahim said that theyt are extremely delighted with the response to Danat, which is their first foray into the Indian Sub-continent.

“With a target return on investment of 83pc over a 3-year period, Danat wants to fullfill the requirement of middle income residential properties driven by increasing urbanization, rising disposable income and trouble-free financing alternatives. It offers our investors a chance to potentially advantage from the continued growth of the Indian economy, specially the demand from its burgeoning middle class.”

DTZ Appoints New CEO

Global real estate consultant DTZ announced on 21st may that it has appointed Anshul Jain the CEO of India operations with effect from August 1.
“As we continue to successfully grow our India business, I am delighted to welcome Anshul to guide the team. The move demonstrates DTZ’s promise to the India story as we continue to build our team to deliver comprehensive real estate services across India and the region,” DTZ CEO (Asia Pacific) David Steventon said in an announcement.
Anshul is presently working for DTZ’s international investment team in London where he focuses on cross border investment into central and eastern European regions.

Milestone Capital To Invest In Tamil Nadu Real Estate

Milestone Capital Advisors will raise a fund of ten billion rupees to invest in the real estate sector in tier-II and tier-III cities of Tamil Nadu (TN).
The amount would be raised from high net worth individuals and financial institutions.

This fund would be primarily used for the construction and development of low-cost and green housing and also large warehousing across Tamil Nadu.

The company had so far floated two funds. The first one was for Rs 2.5 billion and the amount was disbursed for fourteen projects, of which nine were in Chennai.

The second one was for ten billion rupees, which was invested in readily available properties such as warehousing and office complexes.

Stock To Watch

MUMBAI: Equities are seen opening flat-to-negative on Tuesday amid quiet global cues. Crude oil’s record high spike to the $127 mark will weigh on sentiment.

Essar Oil’s refinery expansion project at Vadinar may turn out to be the only such upcoming project to be denied a 100% tax holiday available to refinery projects. This follows the finance ministry’s decision which allows refinery projects to enjoy the tax holiday only if they have a joint venture with a public sector company that holds a 49 per cent stake. Shares of Essar Oil ended at Rs 257.75 on the BSE. Read More »

BSEL to float Malaysian arm to execute projects

Mumbai-based firm will invest Rs 18,000 crore in next twelve years. BSEL Infrastructure Realty plans to set up a company in Malaysia to execute its operations in that country.
The Mumbai-based company has signed a memorandum of understanding (MOU) with Malaysia’s Iskandar Regional Development Authority (IRDA) to develop properties in Johar Bharu region of Malaysia. The company has plans to invest Rs 18,000 crore in the next twelve years.
The new company will be either made a supplementary of BSEL Infrastructure Realty, or its UAE subsidiary BSEL Infrastructure Realty FZE.
Dharmendra Raichura, managing director, BSEL, said that the company will use the proceeds from UAE projects to finance the Malaysian projects. The company generated revenues of three hundred crore rupees in 2007-08 from the UAE operations and expects to make seven hundred crore rupees in the recent financial year. BSEL will borrow funds to finance the projects.
The company will develop seventy million sq ft of space in three phases with ten million sq ft in the first phase and double in every subsequent phase. It will invest Rs 2,500 crore in the first phase and Rs 5,000 crore in the next phase.
Raichura said the company expects returns of 35- 40 % from the project. Private equity companies invest in realty projects in India with expectations of 25-30 % rate on investment.
“Johar Bharu is a 25-minute drive from Central Singapore, where property prices are 25 times more than the rest of the country. The authority plans to transform Johar Bharu into the next hot spot after Singapore in five to seven years. That is why we chose that city,” Raichura said.
BSEL will get a tax holiday on land sales and premises sales till 2015 and exemption on rental income till 2020.

Shree Precoated To Separate Its Steel Business Into Separate Company

MUMBAI: The Ajmera group-controlled Shree Precoated Steels, which has interests in real estate and steel, has taken a decision to hive off its steel business into a separate company. This will be a reverse merger as the Mumbai-based group had earlier merged its real estate assets with Shree Precoated Steels.
The group will rename Shree Precoated Steels as Ajmera Real Estate and Infrastructure, while the demerged entity will be known as Shree Precoated Steels, said Shree Precoated Steels CFO OP Gandhi. The group had mandated PricewaterhouseCoopers to advise it on the demerger, he told ET. The Ajmera family owns 62.5 per cent in Shree Precoated Steels, according to BSE data.
Post-demerger, Ajmera Real Estate and Infrastructure will hold the group’s five real estate projects — three in Mumbai (Wadala, Kanjur Marg and Ghatkopar) and one each in Bangalore and Bahrain. Shree Precoated Steel will continue to make colour coated galvanised steel sheets. On 16th may, the stock closed marginally down at Rs 189.20 on BSE. “The demerger will help the group give exact focus to both steel and real estate businesses,” Mr Gandhi said. The group is developing residential and commercial projects in Wadala and Kanjur Marg, while it is developing a residential project in Ghatkopar.
Mr Gandhi said the Kanjur Marg project is the biggest among its existing real estate developments. The project is being developed under a special purpose vehicle named Jolly Brothers.
The group also plans to develop a two thousand five hundred crore rupees, residential-cum hospitality-cum-commercial area in Kanjur Marg, comprising residential space of twenty six lakh sq ft and commercial space of fifty four lakh sq ft. The company intends to pump in Rs 500 crore and raise Rs 1,000 crore by way of debt.
Ajmera group has already developed 170 lakh sq ft in Mumbai, besides large format projects in Pune, Rajkot, Ahmedabad and Surat.

ICICI Venture May Raise Three Billion Dollar

ICICI Venture, the private equity wing of ICICI Bank, plans to raise three billion dollar from its 2 funds including equity and a real estate fund.
A senior ICICI Venture executive told that they will raise $1.5 billion from both these funds.
The ICICI Venture executive said the company expects to generate most of the investment for the fund from the US, Europe, Canada and West Asia.
“The equity fund will invest in all vital knowledge economy sectors. The real estate fund will invest in residential in addition to commercial properties,” he said.
The $1.5 billion real estate fund is the 2nd such offering from ICICI. The company has just closed a five hundred fifty million dollar real estate fund, the first in a proposed series of real estate funds by the firm.
Real estate is the hottest sector for private equity investment in the country, and accounts for 30- 40 % of the deals. At present, Goldman Sachs one billion dollar real estate fund is the largest fund investing in real estate in India. The US investment banking firm had set up this fund in 2006.
Credit Suisse had also announced plans to set up a one billion dollar real estate fund in India. However, the proposal was not cleared by the RBI.

Talent Search In Real Estate

MUMBAI: The addition of new real estate investment products and property funds that developers are lining up are expected to exacerbate the talent crunch in real estate.

“The sector is currently hiring for front-office, back-office and operational roles. The levels are comparable to the first wave of aggressive hiring witnessed in the late nineties. We have seen over 1,500 cumulative openings being tendered in the first quarter of 2008,” said Monisha Advani, managing director, Randstad Holdings India (former Emmay HR), a hiring consultancy.

Though regulatory clarifications are still awaited, fund houses are already on the hunt for key personnel, who have the caliber to look after investments in real estate.
Milind Barve, managing director of HDFC Mutual Fund, says his firm has already hired 5 to 6 people in the past 6 months for realty funds.

“Two of these would come from within the group i.e. Housing Development and Finance Corporation, while another one has a finance background,” Barve said.
A fourth has been inducted to look after the tax issues on the deal structuring side, while the fifth one will take care of legal issues linked to due diligence of a property before investing in it. Rival Birla Sun Life is on the lookout too.

“Not aggressively, but we are seeking people who have worked with property consultants and investment banking firms,” said an official who did not wish to be named.

Express Estates Home Expo

Pune, May 16:- The Express Estates Home Expo was inaugurated by Mayor Rajlaxmi Bhosale at Sakhar Sankul on Friday afternoon, setting in motion the three-day event. The Expo will not only be a one-stop shop for people interested in buying properties in the city, it intends to set a benchmark by educating the public on all aspects of buying property including finance – home loans and legal issues.

While commending the real estate players for their share in building the city, the Mayor asked them to spare a thought for the large majority in the city who want affordable housing. “Many in the building industry, like the construction workers and laborers, do not have proper housing; they look after our needs and look after the city. The city in turn has to look after them,” said Bhosale. She called upon the banks to make loans easily available for the poor.

Bhosale also mooted the proposal of building servant quarters in every luxury apartment, where FSI would be free of cost.

Mukund Sangoram, Resident Editor, Loksatta, said that the development of the city reflects in the construction activity. Pune is among the fastest growing city in country. With the “aspiring class” increasing, the builders are going for townships instead of sole buildings. “However, it is their duty to build infrastructure as well. Along with the corporation, it is the responsibility of the real estate players to upgrade the basic infrastructure of the city,” he said.

Vinod Mathew, Resident Editor of The Indian Express, said that the real estate was as much synonymous with Pune as the automobile and the IT sectors. “It is a big business. Last year, the turn over was over Rs 3,000 crore. Naturaly, The Indian Express Group has a stand on the real estate and this is the first time we have organized the Estates Expo here. We expect this platform to serve as an open discussion platform between experts and the public for technical, legal and financial aspects involved in buying property,” he said.

Royal Palms Plans Star Hotels In Main Cities

Real estate and hospitality major Royal Palms India will invest two thousand four hundred crore rupees in the coming two years for setting up four- and five-star hotels in big cities in the country. The company is planning to build four luxury hotels in Mumbai. Read More »

Quake Destroyed About 216,000 Structures In Sichuan

The huge earthquake that radiated destruction from its epicentre in southeastern China on Monday will lead to further consolidation in a fragmented property sector, analysts predict, as safety concerns become paramount.

The worst tremor to hit the mainland in three decades toppled schools and crumpled homes, with death toll estimates as high as 50,000.

As investigators begin looking into claims that shoddy construction may have contributed to the high death toll, analysts say some smaller property firms might be forced to shut down.

“The earthquake will likely raise awareness of safety and accelerate the housing upgrade .” Tong Tsang of Citigroup Global Markets, said in a research note.

China’s property development companies are estimated to number more than 20,000, most provincial or local in scale, which have developed rapidly over the past two decades of rapid economic growth.

“Many of the smaller developers will be driven out,” said Ashley Howlett, a partner with law firm Jones Day, who heads the Greater China construction practice.

The quake destroyed some 216,000 structures in Sichuan, the epicentre of the quake, including 6,898 school buildings counted as of Wednesday, Xinhua said.

Most large property developers focus on profit-making commercial buildings such as residential estates and office builders, and leave public projects for schools and government buildings to others.

Pantaloon Will Open 110 big bazaar hyper Markets

Pantaloon Retail (India) Limited, a future group venture, will make an investment of more than Rs 1500 crore for opening more than 110 big bazaar hyper Markets in various cities across the country, Anand Adukia, Zonal Chief of the company said on Friday.

“With this launch, Big bazaar is now present in all the four major cities of Ahmadabad (five stores), Anand, Surat, Rajkot and Vadodara (one each) while the count for all India goes upto 90 stores in 55 cities in the country,” Adukia told reporters, after opening its ninth store in the city today.

The sprawling three floors of Vadodara Big Bazzar houses over 1.6 lakh products and is a destination store to cater to every single household needs of a family, he said.

“We are a consumer-driven company and we ensure that all our Big Bazzar stores fulfill the needs of the entire household under one roof,”Adukia said.

This store also houses, ‘Navras’, a national brand known for fine 22 carat pure gold and diamond jewelery.

The company intends to open one more store in Vadodara, and Ahmedabad in next couple of months along with Jamnagar, Bhavnagar and Vapi among others, Adukia added.

Besides, the company also intends to open 11 more stores in Gujarat later this year, he said adding, with this, the company has made a total investment of Rs 500 crore in the state.

At present, Pantaloons caters to the lifestyle segment through its 40 stores and seven central malls.

The company is a leading retailer with a turn over of over Rs 3350 crores and is targeting 50% growth this year, Adukia added.

Indian Postal Department Is Planning For SPV For real Estate

The face of Indian postal department is changing, under pressure from modern communication systems. Gone are the days when post offices were used for screening and distributing letters. Today, it is entering into every possible business segment, be it money exchange or logistics. With a network of 1,55,516 post offices in every nook and corner of the country, India Post is all set to conquer new frontiers.

Indian Post used to be one of the prominent pillars of the country’s communication infrastructure. This, however, is no longer the case with the emergence of telecom and Internet as the preferred mode of communication. Courier services have also made a dent into the revenues of the postal department. With an aim to revive its past glory, the Department of Post (DoP) has planned a series of initiatives including rapid induction of information technology, introduction of logistics post air, tie-up with commercial banks and launch of new mailing and money-order schemes.

The department also plans to strategically leverage its vast network of over 1.5 lakh post offices across the country, the largest in the world. From railway reservation to spreading education on the government’s social sector schemes, the neighborhood post office plans to become a single gateway for almost all official purposes.

Further, with an aim to leverage upon its vast real estate assets, the Indian post is also planning to form a special purpose vehicle (SPV). The SPV would be responsible for planning and execution of commercial utilisation of vacant plots of land and buildings. The special purpose vehicle would be a 100% subsidiary of the DoP.

“Commercial exploitation of the real estate properties would provide Indian Post the much needed revenue for taking the modernisation plans,” communications minister A Raja said.

DLF Assets files for IPO approval in Singapore

DLF Assets, the property fund of DLF Ltd, plans to launch an initial public offer of its office trust in Singapore by June to raise over Rs 8,000 crore. DLF is India’s leading real estate company in terms of market evaluation. Read More »