Monthly Archives: May 2008

Indiabulls in discussion with leading global retailers

May 13, 2008 – 5:22 am

MUMBAI: Indiabulls group, a rising company with interests spanning from financial services to retail, on 12th may said it is in talks with some foremost global single-product retailers seeking a pan-India presence. Read More »

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Retail sector to consolidate in medium term

May 12, 2008 – 5:40 am

KOLKATA: Rising retail industry in India would see a phase of consolidation in the medium term while ill-planned malls were likely to go out of business, an official of real estate management company Jones Lang LaSalle Meghraj (JLLM) said.
“There is a enormous potential for the retail sector in the country since India is a large economy and 97 % of the country’s retail trade is still in the unorganized sector,” JLLM Managing Director (Kolkata market) A. Das told reporters.
With the country’s economy estimated to grow at a rate of 9% per year, there would be steady shift of the retail business from unorganized to organized sector, he said.
Despite of this, retail sector would see a stage of consolidation in the medium term. According to Das, malls which are ill-planned and of below average standards would be under severe pressure.
Companies like Reliance Retail, Future Group’s Big Bazaar are expanding their network in the country while new players are entering the market, he said.
He said a small player with an terrific mall in terms of design, positioning, tenant mix and value proposition would always do better than a big player with a below average mall, ill-designed and poor value proposition.
The sector would continue to magnetize investments in the subsequent 5 years, he said, adding that there was no scope for deceleration in the development of the industry in the country.

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Deyaar Of Dubai Cancels Indian Realty Deal

May 9, 2008 – 4:10 am

DUBAI: Dubai’s third-largest traded real estate company Deyaar Development Co said 7th may that a deal to develop projects with India’s Ansal Properties & Infrastructure has been canceled.
“The memorandum of understanding between Deyaar and Ansal Properties to develop a project in India has been terminated by mutual consent,” Nasser al-Sheikh said in a statement on the Dubai bourse website.
The announcement comes amid a financial investigation into alleged embezzlement at the company, which has already led to the detention of it’s former chief executive Zack Shahin and three other people in connection with the probe. Deyaar shares closed flat at 2.37 UAE dirhams ($0.64), after falling intraday to 2.31 dirhams. The stock is down almost twenty per cent this year.
Ansal shares ended down 0.7 per cent to Rs172.95 on the Bombay Stock Exchange. Termination of the agreement came into effect from 7th may, Deyaar said in the statement.
Deyaar had granted to take up to forty per cent stake in a project to develop a township comprising of residential and commercial real estate in India, as par an Ansal disclosure previous year posted on the Bombay Stock Exchange website.
The company, which said in November it was thinking over a five billion dollar real estate project in India, added that it still plans enter the market and is in discussions with other prospective associates.

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Millionaires in India on the rise

May 8, 2008 – 3:42 am

MUMBAI: Over the next decade, the figure of dollar millionaires in India is likely to touch 4,11,000 from a negligible number at present.

According to a report by the Economist Intelligence Unit (EIU) on behalf of Barclays Wealth, these households are estimated to be worth $1.7 trillion, or over the country’s current market capitalization of about $1.3 trillion.

But as a percentage of the population these households will comprise just 0.2 per cent. In comparison, smaller countries such as Singapore and Hong Kong will have the highest concentration of millionaires with about forty per cent of the households in each country having wealth in surplus of $1 million.

In absolute terms, however, India is expected to have one of the fastest-growing prosperous markets in the world, making it the 8th largest wealth centre by 2017. The numbers of mass affluent, with wealth over $500,000, is predicted to rise from a negligible figure in 2007 to 1.9 million by 2017.

The 5-year bull run has contributed considerably to the rising fortunes, with many corporates and entrepreneurs tapping the markets to raise funds. Inherited wealth and rising corporate salaries are also key drivers.

As in many rising markets, the wealthy in India have kept much of their wealth in tangible goods. Fresh research by McKinsey tell s that Indian households hold over half their savings in physical assets like land, houses, cattle and gold.

Property accounts for 43 per cent of overall household wealth. The yellow metal has also been a popular investment tool among Indians, who are the world’s largest consumers of gold. Recent guess suggest that the population owns two hundred billion dollar in gold, equal to nearly half of the country’s bank deposits.

But over the next decade this might change, with the increasing popularity of financial instruments like REITs and real estate mutual funds as well as gold ETFs and bullion trading platforms. Investors are likely to shift to these avenues of holding traditional assets like property and gold.

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Studio Apartment Project In Kolkata

May 7, 2008 – 7:36 am

Setting a good example of how demand shapes supply, even in the real estate sector, a Kolkata-based developer had taken a decision to venture into unexplored territory with the city’s first luxury studio apartment block with full-service back-up.

The city-based Siddha Group will construct a sixty crore rupees dedicated block with three hundred fourteen luxury studio apartments in the Rajarhat New Town area on a 2.5 acre plot neat to the area’s main arterial road.

“I have stay in similar studio apartment in New York and found the demand for similar convenience strong among young buyers and working peoples in the city”, said S. Jain, Siddha’s managing director.The idea was to offer buyers possession with a pain-free maintenance experience and in-house facilities, said Jain.

The project would creat new era because in the Kolkata real estate market, small apartments today stood for low-priced housing with poor construction quality, fittings and finish, said property consultant Arun Jhunjhunwala. Density was synonymous with low income group (LIG) housing in Kolkata.

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Realty registration on decline in Pune

May 6, 2008 – 2:47 am

PUNE: On April 10, the Promoters and Builders Association of Pune (PBAP) pronounced that property prices in the city would be hiked by Rs50-400 per square foot from April 20 onwards, giving potential buyers ten days to take benefit of the then existing rates. But the buyers rejected to take the bait and sales are in fact showing a dip instead of the rise the builders had expected.
Indicating a genuine slowdown in the Pune property market, property registration figures available with the deputy inspector general of registration and deputy controller of stamps have shown a turn down.
From April 1 to April 10, a total of six thousand two hundred thirty seven property documents were registered in the city. The number declined to four thousand one hundred twenty six during April 11-20, the period in which the buyers were aware of the imminent price hike but had the opportunity to buy before the hike was applied.
Figures available between April 21 and April 29 suggest that there was no considerable increase in the number of new bookings either — a total of five thousand three hundred sixteen documents were registered during this period.
However, PBAP president Lalit Kumar Jain refused to confess the slowdown, rather he said that “The builders are getting a good response, which is better than that of last month,”.
Besides escalation in the price of steel and cement, Jain had previously cited the Pune Municipal Corporation’s charges on real estate developers as the cause for rising prices.

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India To Sustain 10% Growth For Next Decades

May 5, 2008 – 2:19 am

DUBAI — An Indian hedge fund manager has described his country as being in a charming spot” of economic progress, telling investors in the hospitality and real estate industry that India will be able to carry on an yearly growth of ten percent for many years.
Investment level rose forty percent of the gross domestic product previous year — a jump from twenty five percent five years earlier — while employment is growing at around three percent yearly, said Surjit S Bhalla, chairman and managing director of Oxus Investments Pvt Ltd. He addressed on 3rd may the opening of the fourth Arabian Hotel Investment Conference (AHIC), where he also noted the increasing number of urban women joining the labour force — to eighteen percent in 2005 from fourteen percent in 2000.
“The hype about India is real,” said Bhalla, who manages Dh91.8 million ($25 million) in the Indian equity market through his company in New Delhi. “It is in a charming spot of growth, and this can last another decade or two.”
He told Arab investors at the conference that India lacks infrastructures, but is set to surpass China in terms of GDP growth by 2010. India had an annual growth of 5.6 % between 1980 and 2002, mainly due to its on the rise middle class.
The three-day event devoted its opening session to opportunities in India’s hospitality market, which shares many similarities with that in the Gulf region. Both markets are growing tremendously and calling for environment-friendly buildings and infrastructures. Homi S Aibara, a associate at a leading hospitality consultancy firm in India, Mahajan & Aibara, said that three hundred nine million square feet of commercial space is being planned or under construction all over Indian major cities to augment the existing one hundred seventy three million square feet.

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Old Mutual Plans 4 New Realty Funds

May 3, 2008 – 12:45 am

After life insurance and property services, the $4.5-billion Old Mutual is planning to significantly increase its investments in the Indian real estate sector and plans to come up with four new funds that will invest One billion billion dollar each or more by 2015. Read More »

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Realtors Are Using Risk Mitigation Strategies

May 2, 2008 – 7:17 am

In the scenario of high land prices and tight liquidity, builders are increasingly exercising caution and adopting risk mitigation strategies to move ahead.

Where 18 months ago, they were ready to throw money on land parcels, they are now more realistic in acquiring these and seeing what they can build on that piece of land, and the revenue they can generate from it. Developers thus have to think before they buy land. Read More »

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Modern India disclosed investment plan

May 2, 2008 – 7:15 am

Mumbai-based Modern India Ltd has planned two thousand crore rupees investment plans for Rajasthan. Further, it also plans to construct a five-star hotel in Udaipur and a special economic zone (SEZ) in other parts of the state. Read More »

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