Monthly Archives: November 2010

Realty busted

November 30, 2010 – 6:03 pm

The blow of loan scam comes at a time when the realty industry had started showing signs of recovery in demand.
Realty sector is the most affected after the CBI busted the loan scam. Last week, the Central Bureau of Investigation had booked the officials of reputed banks in this scam. CBI says that the problem was detected a year ago when the special economic team found out the major fluctuations in stock market.
People are arrested by CBI, CEO of LIC housing finance Ramachandran Nair; Naresh K Chopra, Secretary (Investment), LIC; R N Tayal, General Manager of Bank of India (Delhi); Maninder Singh Johar, Director (Chartered Accountant) of Central Bank of India; Gujjal and Dy General Manager of Punjab National Bank (Delhi); Rajesh Sharma, CMD of Mumbai-based firm Money Matters Ltd and two of its employees — Suresh Gattani and Sanjay Sharma—were among those arrested.
Although after this revelation LIC officials have said that the shareholders of LIC need not panic and their money is safe.
While, the experts and customers think that the prices in the realty sector are expected to go down by about 11% and the scenario would continue to prevail for 2011 and may stretch to the first quarter of 2012, the Finance ministry says that this is not a scam and the money of the commoners are safe and they need not panic.

In another lead, the Competition Commission of India (CCI) on November 29 said it is examining 11 complaints against a few real estate companies related to anti-competitive practices, involving bank officials and realty firms.

CCI chairman Dhanendra Kumar said that of the 137 cases that they are handling, 11 pertain to the real estate sector. He also confirmed that complaints have been received under sections 3 and 4 of the Competition Act 2002, which deal with anti-competitive agreements and abuse of dominant position, respectively.

A number of real estate companies such as Lavasa, DB Realty and Adani are already under CBI’s scanner in the housing loan bribery scam. The CCI has also sought explanation from private companies who benefited from an alleged cross-country scam.

M/S Lavasa, Pashmina Ltd, Mantri Realty, Sigrun Ltd, Entertainment World, Indore City Treasures, Ashapura Minechem , BGR Energy, OPG Group, Adani, J P Hydro, J S W Power, Pantaloon, Adalite and MTECH are among the beneficiary companies.

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Booming Real Estate

November 29, 2010 – 6:17 pm

With property boom spreading in all directions, real estate in India is touching new heights.
Flying high on the wings of booming real estate, property in India has become a dream for every potential investor looking forward to dig profits. Definitely, the first step on the way to investment is to study the current trends.

With the unaudited consolidated financial results for the Q2 FY11 (Second Quarter – Financial Year 2010-11) released for the real estate players such as DLF, Jaypee Infratech, Unitech, Ansal API, Raheja Developers, it seems real estate major DLF Group with a 62 year track record seems to have taken clear lead among all other players in this segment.

This quarter, revenues and profits of DLF group soared high in the real estate market with consolidated revenues increased to Rs 2,520 crores in Q2 from Rs 2,161 crores in the previous quarter. While, the consolidated revenues for H1 for this fiscal year was up by 32% to 4681 crores compared to the H1 in the previous year. The Earnings Per Share this quarter was Rs 2.46 and Rs 4.88 for the first half of this fiscal year. The Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) was Rs 1,080 crores for Q2 and Rs 2,192 crores for H1. Rs 418 crore was grossed as Net Profit for last quarter and Rs 829 crores for the first half of this fiscal year.

Unitech recorded Year-Over-Year growth of 41.27% in the revenues for the first half of this fiscal year amounting to Rs 1518.9 crores and Net Profit being Rs 353.80 Crores up by 5.41% compared to previous fiscal. Earning per Share (EPS) for the half year stood at Rs 1.52.

The revenues for the quarter ending on 30th September 2010 were Rs. 674.92 crores and net profit for the same period was Rs. 173.76 crores. And, the Earning per Share (EPS) was Rs 2 along with Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) being Rs 166.9 Crores.

Jaypee Infratech recorded growth of 2794.5 % in total revenue being Rs 711.48 crores and Net profit equal to Rs 411.67 crores with growth of 1971.8% in the second quarter of 2010-11. The Earnings Per Share this quarter was Rs 2.96 and Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) was Rs 516.33 crores.

Realty firm ANSAL Properties and Infrastructure Ltd reported decline of 23% in its Net Profit to Rs 22.76 crores while, the revenues rose by 71% to Rs 330.05 crores compared to that of Q2 FY10. The Earnings Per Share this quarter was Rs 1.78 and Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) was Rs 67.03 crores. The revenues also rose by 79% to 604.5 crore during the first half of this fiscal year and the net profit was Rs 61.55 crores up by 54%.

The above results surely do reflect stable macroeconomic environment and growing real estate sector. With the companies developing strategies and offerings of residential products and product mix the demand for this segment of products is increasing and shall yield good returns in the future.

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Futuristic Investment

November 22, 2010 – 8:02 pm

The demand for more capital appreciation in the wake of the rising property prices coupled with home loan rate hike has dampened the buying spirit, in ways propelling the demand for rental property in India, realizing the immense potential of rental properties in India. Rentals values in tier I & II cities has witnessed an increase of 20-25% in recent times, resulting in real estate agents devoting themselves to negotiations for rented homes more than ever. The capital value or cost of flats has almost doubled in the tier I cities where prices went up twice that earlier, in the residential segment.

Residential rentals for flats/apartments, independent houses and paying guest accommodations being more popular in tier I and II cities, have far greater avenues for those who are on transferable job or looking for job opportunities. This has created a good market for those seeking to invest in a property for rental purposes, ensuring good rentals regularly. Terrace flats, luxury apartments and home, bungalows, villas, penthouses and condominiums are gaining ground as a popular choice; and considered a safe investment option.

Trends in the commercial sector are momentous as the key focus among the investors is to rent a commercial space instead of buying and facilitating low risks and less worry on maintenance. Commercial lease agreements are long-term, hence buying good space in high-quality development and leasing it to a good brand is a wise investment decision. Usually, commercial lease agreements specify a 15% escalation in real estate rental every three years which is a good enough yield.

For those considering regular rental returns rather than capital appreciation, mall space has the distinction to be an excellent option. Real estate developers are in favor of leasing out commercial property. Service Apartments which come in the form of furnished apartments have also become in vogue. Moreover, the commercial rental market is witnessing the rising trend of mixed use developments. The product mix will have malls and office spaces with service apartments. Some of the companies are setting a trend of leasing out their service apartments.

The present scenario of leased out industrial properties/ plots of land for projects and that of the residential apartment rentals is looking up. The new concepts being developed are redefining the traditional ideas that were synonymous with rental market in India. In future, a constant watch on rental developments in India will provide serious opportunities which will spell the success of the real estate rental business.

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Real Estate Awards 2010 by Franchise India Holdings Ltd.

November 22, 2010 – 12:57 pm

India’s most prestigious awards dedicated to the estate industry,to celebrate excellence and brilliance with key industry representatives at “Real Estate Awards” presented by Franchise India Holdings Limited is scheduled to be held  on December 2, 2010 at Hotel Ashok, New Delhi. The Real Estate Awards 2010 are given to practices which have consistently achieved high standards and made an outstanding contribution in the Indian real estate sector, the only awards that recognize and felicitate the best in the real estate industry.

These awards would serve as the national recognition as the “The best real estate business” in the country and is the best chance to promote your real estate business and a platform for networking and validation for your business. An opportunity to benchmark your business against competitors, ongoing publicity and business lifetime of high-achiever credibility, extensive media coverage and PR with the partners are other added advantages.

The  nominations are open only to real estate companies, brokers, builders, developers registered and based in India. Ernst & Young will be the official tabulator for the awards.

The event is designed for all professionals with an interest in Indian and international real estate and can be interesting for : real estate service providers , contractors, developers, investors, fund/ asset managers, brokers /traders, builders, consultants, trade associates, lawyers, accountants.

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