Monthly Archives: June 2008

DLF Township At Dankuni Fate Uncertain

The fate of the prestigious Rs 33,000-crore DLF township at Dankuni has become uncertain.

“The project will not be implemented if the Opposition party and landowners are not ready for it,” urban development minister Asok Bhattacharya said on Tuesday as Trinamool Congress chairperson Mamata Banerjee demanded that the state withdraw the acquisition notice.

The proposed township is one of the largest real estate projects in the country and the company has already shelled out Rs 270 crore to the government. Both residential and industrial, the township covering 4,840 acres is proposed to come up over 10 years.

“People are ready to sell land to those willing to purchase it directly, but not to the government. But we won’t take over or purchase land forcibly. If they are not ready, then the project will not happen. We will tell people this is how we tried, and this is why it did not work out,” the minister said.

Following the setback in the panchayat polls, the Left Front government has gone on record saying land acquisition for industry will not happen in areas where “people are not ready” for it. This has put the future of several township and industrial projects in the state in jeopardy. In fact, the deadline for completing land acquisition in Dankuni has been missed by six months.

Consent has come for only 200 acres and the government was forced to form a “procurement committee” with public representatives including those from the panchayat. It was decided the committee would talk to the people and take their consent before land is taken for the project.

The panchayat polls worsened the situation. CPM suffered heavy losses in the Dankuni area, losing eight gram panchayats to Trina-mool. As a result, the procurement panel will now have no panchayat pradhan from CPM.

“The base prices of land had been fixed. But now a new procurement committee will be formed in July. It is up to the committee to take a call,” the minister said, adding that it is yet to be decided if DLF will eventually try to directly purchase the land. The 200 acres for which consent has come “is in too remote an area and won’t do us any good”.

On her part, Mamata said: “Today, the government may say it is shelving the DLF project, but if the land acquisition notice is not formally withdrawn, it may later acquire land for some other project.”

Sudhir Sehgal, head of DLF Eastern Region said “It is a public-private partnership project, and we have signed an agreement. It is for the government to decide how the land will be taken over. As far as DLF is concerned, we are still committed to the project,”.

Stars Are Selling Dream House

Bollywood celebrities don’t just peddle dreams but also dream homes. Real estate developers are now banking on the star power of the likes of Shah Rukh Khan, Amitabh Bachchan and Aishwarya Rai to endorse their projects.

Deepika Padukone is the latest to join these marquee names. Aspire Real Estate, a Dubai-based developer, has signed up the actress as its brand ambassador. “We are targeting India, and Deepika will add to our brand equity,” said an Aspire spokesperson.

The trend of celebrities – from tinsel town and outside – endorsing real estate projects started around two years ago.

So while big banner draws such as Shah Rukh, Aishwarya, Bachchan or even sarod maestro Amjad Ali Khan and his sons represent the likes of DLF, Sahara and Omaxe, a host of smaller developers too have started signing up celebrities to cut across the clutter.

Thus, Pune-based Brahma Developers uses actress Katrina Kaif to promote its SunCity project, Chandigarh-based LVL City has signed up cricketer Yuvraj Singh, Chadha Group has former cricketer Kapil Dev, AEZ group has actress Perizaad Zorabian while small screen star Shweta Tiwari of Kasauti Zindagi Ki fame was the brand ambassador for Gaursons Developers.

Omaxe executive director Vipin Agarwal says star endorsement was imperative in the highly competitive realty sector.

“The celebrity not only gives the product greater recognition among the target audience but also helps the brand to connect with the customer, thus increasing the brand acceptability,” said Agarwal.

“All real estate campaigns focus on similar amenities. The tag ‘world class amenities’ is now clichéd,” he said. “Stars help a project stand out in an overcrowded market.”

Also, developers feel that hiring a star can give a boost to the sale of residential projects, with the sector witnessing a slowdown of up to 25 % since January this year.

The trend is not restricted merely to big developers or the metros.

Kochi’s Jairaj Projects has roped in Malayalam film star Jayaram; SRK Constructions has singer Yesudas, cricketer Rahul Dravid endorses Skyline Housing, while another cricketer, S. Sreesanth, promotes the Kochi-based Mather Builders.

Indian Firm In S And P Asia Property 40 Index

The sharp fall in shares of realty majors in India has meant that not a single Indian real estate company figures in Standard & Poor’s Asia Property 40 Index.

The index comprises forty Asian realty companies listed in terms of market capitalization, an S&P release said on Monday. From a year high of 13848.09 on 8th January 2008, the BSE Realty Index slumped 51.4% to close at 6728.13 on Monday. Read More »

Unitech In Search Of Telecom Ally

Real estate giant Unitech Limited is likely to finalize by the end of June the entity which will pick up a 25-30 % stake in its new telecom venture.

The country’s second largest real estate developer by market capitalization, which has been awarded start up spectrum in five telecom circles, will open next week the first round of financial bids from international mobile operators.

Sources said Unitech had held talks with firms such as AT&T, South Africa’s MTN, Telecom Italia, Norway’s Telenor and Spain’s Telefonica.

These global telecom firms are interested in establishing a presence in the world’s fastest growing telecom market where at least eight million mobile subscribers are added every month. However, it could not be confirmed whether these foreign telecom players had placed a bid for a stake.

Unitech, which has no experience in running a telecom business, is looking to partner foreign telecom firms to utilize their technical expertise and financial strength, said analysts. They estimate total investment for the venture to be around Rs 20,000 crore over the next three years.

Berggruen Will Invest 500 Million Dollar In India

Berggruen Hotels is scaling up its plans for India and proposes to set up 8-10 four-star hotels, adding to the investments it has already announced to develop budget hotels, service apartments and resorts under the Keys brand name. Read More »

India Real Estate Infra Fund Looking For $100 mn Mop-up End June

MUMBAI: Mauritius-based India Real Estate Infrastructure Fund’s first round of fund raising exercise will come to an end by June by which it plans to mop up one hundred million dollar.

Launched in January, the fund targets a mop-up of two hundred fifty million dollar from across the world for private placements in Indian real estate companies. Balance one hundred million dollar will be raised in the following closures.

“We plan to invest the money in unlisted Indian real estate companies under the FDI guidelines. We prefer to have weightage of up to 50 % in every company so that we can have a ‘say’ in the management. It will help us to drive the policies in the right direction,” said Arun Goel, CEO of DHFL Venture Capital India Pvt. Ltd, which has been mandated to create an investment portfolio on behalf of the fund.

The fund will invest in real estate companies pursuing projects in residential, commercial and hospitality domains which also encompass SEZ, IT parks, hotel.

DHFL Venture has appointed Mumbai based Yen Management Consultants Pvt. Ltd as financial advisor.

The fund will consider factors like the number of development projects in hand, FDI compliance, local presence and growth plans and execution in choosing the company.

Explaining the investment rationale, Goel said, “an increasing population and flourishing services sector have resulted in a number of green field projects to build residential and office buildings. Further, rising cost of hotel accommodations across major cities in India has led to high demand for ones with reasonable rates.”

Besides EU based countries, the fund is getting good response from Japan, the UK, UAE, said Goel, who expects the fund to give 25 % internal rate of return.

“We are getting tremendous response from investors across the board but some of them are currently buying time. They are taking stock of the situation in India. However, they will soon get involved in a 2-3 months time,” revealed Sunil Shirole, managing director and CEO, Yen Management Consultants.

“We strongly believe in the fundamentals of the Indian economy and its prospects. So we have no doubt about the success of the fund,” added Goel, who did not rule out the possibility of a mutual fund by DHFL in two years.

Dubai-Based Real Estate Major Looks To India

Dubai-based real estate major Majid Al Futtaim (MAF) is likely to enter India for which it is in the process of identifying a local partner.

The country’s estimated 16 billion dollar realty sector, which has already attracted UAE-based players like Emmar, Limitless, Nakheel and SmartCity, has been identified by MAF as a ‘market to be in’. Read More »