The company emailed a press statement saying the demerged entity will have properties and investments with a book value of 50 cr rupees. The company currently has Real Estate properties in metropolitan cities including Delhi, Chennai, Pune, Nagpur, Bangalore, Ahmadabad and many more.

The management said it believes that TCI’s Real Estate & Warehousing undertaking has the potential to develop the company’s existing realty sector into commercial ventures and also create a focused entity to develop large scale logistics infrastructure projects such as multi-modal logistics parks, truck terminals, free trade warehousing zones etc.

By the creation of a separate entity, the management aims to provide strategic direction and raise adequate funds for its development plans on the strength of its future profitability and growth. After the demerger is done, shareholders of TCI will get one equity share of 10 rupee face value in the transferee company, TCI Developers Ltd, against every 20 equity shares of 2 rupee face value.

The company’s Executive Director Vineet Agarwal was quoted in the press statement, “Investment in real estate & warehousing is more capital intensive and yields return over a longer period of time in comparison to the services model of the logistics business. Going forward, on a long term basis we would look at raising funds from strategic investors and financial institution”.

IDS National Institute of Real Estate Management (IDS NIREM) has taken several initiatives to develop human resources for the Indian real estate market focusing on real estate education, training, consulting & research. Acknowledging the immediate need for specialization in realty management education it launched PG Diploma in Commercial Real Estate (PGD-CRE).this will be a one year distance learning course. This real estate course, patterned on MBA in real estate, is also offered at diploma and certificate level.

This Diploma course will be offered in two segments. First, for those who want to begin their career in real estate including the fresh graduates and MBAs and second for already existing realty professionals who either want to enhance their learning or want specialization in commercial property sector.

This course will concentrate on both knowledge and practical skills to analyze, acquire, finance, and operate real estate assets.

About the Institute:

IDS National Institute of Real Estate Management has been established by ‘The Industry Development Society for Real Estate’, which is a realty sector development and promotion body. NIREM will provide PG level degree, diploma and certificate courses in addition to MDPs, Consulting and Research in different areas of real estate. This institute is planned for Centre of Excellence in Real Estate Education, Training & Research.

In addition to learning programs, it also aims to develop benchmarks for real estate sector, retail & institutional investors and other stakeholders, provide with comprehensive market data to end-users facilitate simplification of asset acquisition and investment process, promote adoption of international standards including the financial and other disclosure norms, best practices and corporate social responsibilities etc

The mall will be located at Malleswaram, north Bangalore and spread over 1.7 million sq feet built with an investment of over Rs 500 cr. It boasts of 252 retail outlets (including 39 F&B outlets) offering 10,000 brands; the Chairman and Managing Director of Mantri Developers Mr. Sushil Mantri told the media. Mantri square will generate direct employment for over 4,600 people.

The highlight of the mall would be its connectivity to railway station which is being jointly developed by the metro rail authorities and Mantri developers on five acres of land belonging to Mantri and leased out to the government. The commuters will get off at a station on the second floor of the mall lead by a bridge providing shoppers an international and unique experience.

The station becomes operational in two years time frame and is expected to provide an additional footfall of 20, 000. It is expected that the footfall will go up to one lac a day once the station gets started. The station area would cover around 80,000 sq feet and a third party will be involved to maintain it.

The mall is inspired by worldwide mall architecture, it is supposed to have 40 feet wide corridors to allow shoppers to move comfortably even in peak hours. Its roof will be 450 feet long and 135 feet wide which will allow natural sunlight.

The mall would be responsible for introducing some leading international brands first time in the country, like Taco Bell, the leading Mexican inspired food chain, Leading Italian brand OVS etc. It would also see many national brands launching their outlets for the first time in the city.

Mr. Mantri said, “Mantri Square is going to be the largest mall in India. It will undoubtedly be the most sought after destination amongst discerning shoppers and for brands of repute as well. The sheer scale of offerings at the mall came only second to the detailing that has gone into ensuring a world class shopping, leisure and entertainment destination.”

We couldn’t agree more.

Union Finance Minister

In the letter to the Centre, the association has also said that a comprehensive action plan for urban housing is a must as there is a shortage of 27 million houses in the country at present.
President of Surat Builders’ Association and the Vice-President of Gujarat chapter of CREDAI, Tarun Rawal said that if we look at the population explosion in the city the figure has gone up to 46 lac very fast but there is a shortage of about 5 lac dwellings in the city itself. He added that the need for affordable housing in all the big cities is huge and to fulfill that we must have a central policy and plan to guide it.

The association urges the Union finance minister to look into the matter of service tax imposed on housing sector as the sector is crucial for growth to create affordable housing. Slum re-development and integrated township incentives are also required. “Only if this is provided will the sector be able to fulfill the need of a growing nation,” said Rawal.

It is argued by real estate developers in the letter that the imposition of service tax will ultimately make buying houses more difficult for the middle and lower classes. Likewise, service tax on rented property will adversely affect segments like IT sector as they are already showing declining trend when the US restrictions have affected them.

What the finance minister decides is what should be looked for now.

A Business ParkMarch 12, 2010

The first phase of Ambuja Group’s ‘Ecospace’ Business Park on the northeastern margin of the city, Kolkatta, i.e. in Rajarhat, was inaugurated on Wednesday September 23, 2009 in presence of Mr. Pranab Mukherjee, the FM. Yesterday, on Thursday March 11, 2009, the launch of its second phase was announced by Harshavardhan Neotia, the Chairman of Ambuja Realty.
The complete Ecospace is a 20-acre project, but Ambuja is constructing only 10 acres of it. The rest is being readied by RMZ of Bangalore. The second phase will have two blocks with an area of 4.5 lakh square feet for sale. The Chairman told media that 85% of the area in the first phase is already sold out or leased to the likes of Voith, Bajaj Allianz, Bayer  Corp ,HDFC Bank, Indus Towers and Thyssenkrupp.

Also, Ambuja plans to invest an amount of Rs 200 cr. for a 5-lakh square feet Business Park in Salt Lake, and the second project will be set up over 1.5 lakh sq ft and will entail an investment of around Rs 60 cr. In all, a plan of three IT projects is the emerging plan of Ambuja. The total investment on Business Parks will be of an amount of Rs. 300 cr.

Photo by Architecture & FoodMr. R.K.Arora, Supertech Chairman and Managing Director said they will develop 12 residential and 3 commercial projects on which this Rs.4, 000 cr will be spent .The projects include a luxury residential project in Noida with 750 units and a 1,500-unit township at a cost of Rs.500 cr. The new residential and commercial projects will be located in Noida,Meerut, Haridwar and Rudrapur (Uttarakhand).On being asked about their IPO plans, Mr. Arora replied it would come up by mid-2011. He told they have started to prepare for an IPO. But as the market is still to completely come out of economic downturn, they will wait till next year to raise fund via IPO.

The national capital region-based company also launched a 6,000-unit residential project in Noida, envisaging an investment of Rs 1,000 cr. The Eco Village will be constructed in different phases over the next 30 months and will be funded through a mix of internal accruals, debt and money coming from sales. Mr. Arora further added that they are also developing a 120-room luxury hotel in Haridwar, which will be managed and operated by the Radisson group and also constructing a budget hotel in the holy city that will be branded by them.

The lavish project in Guwahati will be completed and commissioned within two years and with a budget of Rs.90 cr. The premium hotel project will be located on 4.5 acres along the Guwahati-Shillong road (Khanapra). The company has been allotted the land on a long-term lease. The hotel design will be inspired by local architecture and will comprise of 150 rooms and suites. The hotel will have all the usual five-star facilities like a day-long dining restaurant, a specialty restaurant and a bar, but also recreational facilities like an expensive spa and fitness centre.

In 2006 Narayan Murthi, of Infosys, refused to invest in the state in the absence of any big hotel to host its guests. Gogoi said that since then he was “looking” for a five-star hotel in Assam. He said he then got in touch with Ratan Tata and impressed upon him to set up a five-star hotel in the city.

The State of Assam

On being asked why Guwahati, Mr. Tata said, “Why are we here? We are here because we have been drawn to the opportunities and the potentials of the state…This is a new Assam here and most of us are committed to be here…Guwahati is changed and it’s full of evidence of great development which I do not recall when I was here last“. He also said that the hotel would not only be the destination for business clientele, but it would also attract tourists.

Thus Taj marks a big start for hotel industry in the north eastern part of the country.

Women in Indian villages

For the past few years our country has taken measures to specifically increase the number of women buying property in India. Fortunately they have at large proved fruitful too. In the ancient times a woman faced difficulty in getting loans and if they were fortunate ones to get it, it was likely at a premium to what their male counterparts might receive. But now times have changed. The fairer sex is motivated to invest in property owing to a higher real estate tax rebate and cheaper loans for them in parts of India.

Here are some facts for women looking to buy property:

• If you invest in an equity-linked savings scheme (ELSS), you could claim deductions of up to Rs 1 lac. Where as a housing loan enables you to avail tax benefits on principal repayment up to Rs 1 lac as well as up to Rs 1, 50,000 on interest paid on the loan.
• If you want to purchase the house jointly with your parents (assuming you live there), you can claim deductions on your share of home loan.

• If you are staying with your parents (in a house owned by them) and want to lease out the house you have purchased. In such a situation, in addition to deductions on re-payment of home loan principal up to Rs 1 lac, you can claim the entire interest paid as deduction against the rental income.
• If the interest paid during the year is Rs 5 lac and the rent earned is Rs 2 lac, the interest amount can be claimed as deduction against Rs 1, 40,000. This will mean a loss of Rs 3, 60,000, which can be set off against your salary income, thus maximizing your tax gains.

• If you plan to get married in the near future, your husband and you could maximize tax benefits on a home loan if you jointly own the house, besides lowering the repayment burden.

• In the age of 20s-30s, there is a tendency to invest in a house on the basis of budget, i.e., if a 1BHK apartment is affordable, you are inclined to opt for the same, but you should keep in mind that you might need a 2BHK flat a few years from now.

Today women are on the same professional, personal and financial platform as men. You are independent, earn high salary, drive your own car, and have an impressive lifestyle full of luxuries. Owning a house would make you feel safe and secure for the future and serve as a wise investment option.

LIC office in New Delhi

On March 7, T.S.Vijayan chairman of Life Insurance Corporation of India (LIC), India’s No. 1 insurer announced that LIC will invest nearly Rs 36,000cr in infrastructure in 2010-11 on the sidelines of a stone-laying function of a housing complex for its policyholders in Kolkata. He said LIC would undertake realty projects, both commercial and residential, across the country and the company expected an income of Rs 200-300cr from its real estate foray this year. LIC contributes to 4% of the country’s GDP as well as pays hefty dividends to the exchequer.

Most of the builders have increased prices and thus it is likely that real estate may see some slowdown in demand in the long term despite the fact that the housing finance companies like HDFC, SBI, and LIC Housing reported a strong 30% growth in loan disbursal in the December 2009 quarter over last year. Even the stock market performance of the sector has been good in the recent as The Sensex touched a high of 17,000.01 last week which is a benchmark.

The realty sector in India continues to grow particularly more after the fiscal  year 2010-11 budgets was presented. The investors rejoiced when the finance minister Pranab Mukherjee said while reading the budget “We hope to breach the 10% growth mark in the not-too-distant future”. Now Tax allowances are raised, putting more cash in people’s pockets and large housing companies are trying to make full use of it.

But Lack of long term strategic thinking will lead to unplanned development that will not only have an adverse impact on real estate investment and development but also on
macro economic and societal development. That is why it is important for Indian cities to provide a good quality of life to their people because economic success in the 21st century is going to be determined by the human capital a society is able to attract and nurture.

There was no change in office rentals in some of the major office locations in the national capital region, Mumbai, Bangalore, Hyderabad and Kolkata, while rentals at some others in Chennai and Pune fell by 5-6% in the quarter ended June 30. In contrast, rentals in Connaught Place in Delhi and Gurgaon in Haryana registered an increase of 5-8% in the last quarter.

“The increase in demand is largely due to improving economic conditions, positive market sentiment and growing corporate confidence. However, it will take some time for the supply-demand gap to get bridged. Thus, both rentals and capital values are expected to remain stagnant or under downward pressure in the medium term,” said Anshuman Magazine, chairman and managing director for South Asia at CB Richard Ellis.

In Mumbai, commercial office space is seeing a slight pick up in demand but rentals continue to be competitive. The September quarter saw close to 95,000 square feet of cumulative lease transactions as compared to 83,000 square feet space being rented in June 2009 quarter, according to the report.

However, as Mumbai continues to be 15th largest office construction site in the world with about 3.5 million square feet of office space coming up in extended business districts (EBD), capital values will remain low. This has resulted in a few unexpected transactions of outright purchase. Recently, Motilal Oswal, a brokerage firm purchased 90,000 sq feet office building for Rs 156 crore. Constructed by K Raheja, the property was purchased at Rs 17,333 per square feet as against the ongoing rate of Rs 19,000-21,000 per square feet.

“Indian corporates firmly believe that current valuation of commercial property is attractive, so they are capitalising on it rather than leasing as is being opted by MNCs,” said Sanjay Dutt, CEO (business), JLLM, an independent property consultant.

Anshuman Magazine, MD – real estate consultancy firm CB Richard Ellis – South Asia, said, “With improvement in the sentiment in the economy, transactions in the affordable range of residential real estate have gone up. This has made developers to increase prices by 5%-10% in the last three months”.

The developers had cut prices by around 30% in first two quarters of calendar 2009 to revive the demand of residential units, which plummeted to a low due to the global financial crisis. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery, he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

According to a IIFL report, in Mumbai, prices are up 25%-40% from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. “Constrained supply and a revival in demand drove up prices in Mumbai, and NCR,” the report said.

In Mumbai, the prices of apartment in Metropolis appreciated by 38% since March to Rs 10,500 per square feet. Similarly, the project, Planet Godrej, has become 20% costlier to Rs 25,000 per sq ft in the last six months. In NCR also, many developers like DLF, Unitech, Jaypee Greens, Mahagun and Amrapali among others, have increased prices by around 10% from the launch prices in March-June.

In the premium segment also, there is revival in demand, said Vibhor Gupta, senior official of Jaypee Greens. However, the prices have not witnessed any escalation in the premium segment. Similar trend has been noticed in cities like Bangalore, Pune and Chennai.

“The current trend of price escalation can not be sustained as it will affect the demand,” said Aditi Vijayakar, ED of Cushman and Wakefiled, adding, as the demand has revived following interest rate cuts by banks, many developers have announced projects in the affordable range. This will increase the supply and will put pressure on the price rise.

At the same time, another consultant said the financial condition of the developers has not improved to a level that they can hold a project for long. They need cash flow to service the debt, which they have taken to buy lands. The source said the money from other sources like dilution of equity is still not easily available. This has forced developers to depend on the sales proceeds to service debt.

DDA has awarded 5.22-hectare, or 13-acre, project at Kathputli Colony near Shadipur Depot in west Delhi to Raheja Developers for Rs 6.11 crore, a DDA spokesperson said. Under the scheme, the builder pays only Rs 6.11 crore—the bid amount—for the land, but has to build 2,800 homes, of 30 square metre size each, for existing slum dwellers of Kathputli Colony named after its majority residents of puppeteers and craftsmen.

In the bargain, the builder gets for commercial exploitation 10% of the total space slated for 2800 homes and also close to a hectare for high-end residential development. Therefore, the cost incurred in building 2800 homes for slum-dwellers will be offset by the sale of commercial space and high-end houses in the project, while land would come dirt cheap at Rs 6 crore.

DLF has recently sold 1250 apartments in its Capital Greens project, just 3-4 kilometres from Shadipur Depot at a rate of Rs 5677 a square feet. Raheja Developers will have to create temporary accommodation for the slum dwellers at a piece of land close to the project site that will be given by the DDA in a month or two.

At present, Sahara Prime City is developing nine integrated townships and one residential complex in cities such as Lucknow, Indore, Nagpur, Ahmedabad, Jaipur, Solapur and Cochin. The group’s ambitious Ambey Valley project is not a part of Sahara Prime City.

Sahara Prime City plans to develop 16 more integrated townships and would pump in another Rs 1426.83 crore from the proceeds of the IPO.

The DRHP said it would develop 13.41 million square feet of residential space in the upcoming projects across the country, including Bangalore, Chandigarh, Jabalpur, Jodhpur, Porbandar, Haridwar and Pune.

‘After weathering the worst funds crisis for one and half year, the realty sector has now started seeing inflow of capital and funds,’ said Anuj Puri, the country head of leading global realty brokerage firm Jones Lang LaSalle-Meghraj.

Mr. Puri further said, ‘Sales are improving and private equity funds are coming back. With market sentiments getting bullish, prospects of fund-raising are even brighter. You can now see how every company is taking the QIP route to raise funds,’.

QIP is a tool to raise capital whereby a listed company issues equity shares, fully or partly convertible debentures or securities, instead of warrants, to institutional buyers.

After losing almost 75% of its stock valuation last year, India’s realty sector has raised about $15 billion (Rs.750 billion/Rs.75,000 crore) through routes like QIP in the past six months.

Among the developers who have started mopping up funds over the past few months are the largest player in the industry, DLF Ltd, with $780 million, Unitech with $325 million and Indiabulls Real Estate with $550 million.

The group plans to develop 20- 30 mid- scale and upper middle segment hotels with around five thousand rooms in the next 2-3 years. The company has recently signed a franchise agreement with Starwood Hotels and Resorts Worldwide to open the Four Points hotels by Sheraton.

The company, which opened its first property on 1st October in Jaipur, a 115- room four- star hotel, is developing four such properties in Ahmedabad, Hyderabad, Indore and Pune.

Dilip Puri, CEO, Duet India Hotels, said, “The five properties including Jaipur is worth around Rs 500 crore. In these, we would have around 882 rooms. We plan to reach to fifteen hundred rooms by the end of this fiscal.” “For this kind of expansion, we are looking for more land. As soon as we acquire land, we can start building. We have already acquired land in Hyderabad for developing a property similar to our Jaipur property. We are also looking at other Tier- II cities such as Lucknow, Nasik, Bangalore and Nagpur.

Bangalore would be more of a brownfield development. Among the metros, Chennai is also our target.”

Aditi Vijayakar, the executive director (Residential Services, India) of Cushman and Wakefield, said, “The festive season (September-December) has historically been a buying period, with a large chunk of overall sales being converted during this auspicious time. Some developers see as much as 30-40 % of the yearly sales taking place during the festive season”. Further she pointed out, “Residential prices have increased by 5-15 % from the bottom it made in the first half of the year. If the developers continue to raise the prices then the renewed demand and interest that is being witnessed will start to abate”.

She added, “The previous year has been a taxing one for the real estate industry and the initial signs of recovery are evident in the market, and as most of the sales happen during the festive periods, developers have to be cautious not to hike prices in projects and new launches as this will drive out the end users and prolong the revival in the residential space”.

According to the expert, almost all cities are registering a rise in sale as transactions had frozen up during the start of the year. But now as the economy has stabilized and is back on the growth trajectory, there is a revived interest in buying homes by end users and this increase in confidence, better economy, favorable borrowing conditions and rationalized capital values amongst others which is promoting rising sales across India.