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Housing Sector will face Funding Gap of USD 70 billion in Next 5 Years: CREDAI

by Paul Joseph July 25, 2011

The Confederation of Real Estate Developers’ Association of India (CREDAI), an apex body of organised real estate developers in the country, has estimated that the sector will face a funding gap to the tune of USD 70 billion over the next five years. CREDAI President Lalit KumarJain said such a situation might create hurdles for the industry to grow if the Reserve Bank of India is not “proactive”. “The housing that is required in the current Five-Year Plan is 24.6 million and it is 37 million in the next Five-Year Plan. We require USD 3.2 trillion (to meet the target). Funding gap in housing will be around USD 70 billion in the next five years. The USD 70 billion is among the current developers only,” Jain told PTI. He was speaking ahead of the third edition of theNational Association of Realtors (NAR)-India Convention 2011, a two-day convention and exposition set to begin here today. “Foreign investments do not solve the problem. They are very costly and cannot be affordable. There has to be generation of funds internally and RBI has to be proactive on this issue,” Jain added. He said any FDI into the country would expect a 30 per cent return on investment, which is not possible in real estate projects and hence not advisable. The RBI only allows real estate companies to tap external commercial borrowings (ECBs) for township projects spread over a minimum 100 acres of land, Jain said, adding that small players cannot go for ECBs.

Tagged as: current, industry, meet-the-target, projects-spread, property prices, pune, real estate, real estate developers

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Mahindra Group to Buy South Mumbai Bungalow for Rs 270 Crores

by Paul Joseph July 18, 2011

The Mahindra Group’s real estate arm will pay close to Rs 270 crore to acquire a three-storey bungalow on south Mumbai’s Nepean Sea Road in which Vice-Chairman and Managing Director Anand Mahindra was born and lives as a tenant. The bungalow, named Gulistan, occupies around 13,000 square feet of land opposite Priyadarshini Park and is owned by a special purpose vehicle set up by one of Mumbai’s top builders, Orbit Corporation . Rishi Gagan Trust, whose beneficiary is businessman Om Navani, also has a small stake. Navani had bought the bungalow from an earlier owner in the early 1980s while Orbit acquired the property in 2008. Arun K Nanda, chairman of Mahindra Lifespace, the real estate arm, said his company has signed a termsheet, or a preliminary agreement, with the current owners and made an advance payment of Rs 11 crore. “The company has a 90-day window to complete due diligence and complete the transaction,” he said. It will have to come to a settlement with its co-tenants that include Bank of Maharashtra , which operates its Nepean Sea Road branch from the premises. Nanda, who became non-executive chairman of Mahindra Lifespace in March 2010 after Mahindra stepped down as chairman, also said the deal amount was not Rs 270 crore. “It is lower than that,” he said declining to divulge the exact amount. But sources familiar with the transaction explained that the amount included what they described as “settlement amounts” for tenancy rights of four of the building’s tenants. These sources, who did not wish to be named because the deal had not yet been completed, told ET that Mahindra offered to buy the property as the current owner, Orbit, was planning to tear down the old building and build a new one as part of a redevelopment plan. Sources close to Mahindra Lifespace said the company might execute the redevelopment plan itself once the transaction was completed. But this was not certain, these sources added. Mahindra Lifespace executives said the deal was between the two companies and did not involve the group’s vice-chairman. If the deal went through, the Mahindras would continue to be a tenant, paying rent to Lifespace. He would be compensated with an equivalent space in the new building if and when redevelopment was undertaken. This would be true of the other five tenants, including Bank of Maharashtra. The sources also said the Mahindra family’s tenancy dated back to the times of Mahindra’s grandfather KC Mahindra. Currently, Anand Mahindra lives in the bungalow.

Tagged as: bungalow, current, delhi, mahindra group, mahindras, property, property prices, pune, real estate, redevelopment, transaction

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Mafatlal sells Mumbai land to Piramal Realty arm for Rs 605 crore

by Paul Joseph June 20, 2011

Defying sluggish property sales, high interest rates and inflation, money continues to flow into big-ticket land deals in Mumbai. On Friday, Mafatlal Industries sold a 30,910 square metre parcel of land at Byculla in central Mumbai for Rs 605.80 crore to Gliders Buildcon LLP, a subsidiary of Piramal Realty. On Thursday, Mafatlal had got shareholder nod for the sale. In 1913, the plot, which is half of the 14.5-acre leasehold property, was leased to Sassoon Spring & Weaving Company (now Mafatlal Industries) for 99 years by the Collectorate. The Government objected to the property sale and wanted the land back for expanding the Byculla Zoo, which is close-by. However, Mafatlal Industries managed to retain half the land by surrendering the rest to the State. There was buzz about the deal for some time and concerns were expressed how Mafatlal would overcome the issue. Khushru Jijina, managing director, Piramal Realty, said: “The land is a mere 15 minutes from the Victoria Terminus and 30 minutes from the Bandra Kurla Complex via the new bridge in Parel. As such, we find it ideally suited for mixed-use development.” Sanjay Dutt, chief executive officer (Business), Jones Lang Lasalle India, who brokered the deal, said: “The location lends itself well to mixed-use that could include hospitality, retail and residential components of over one million square feet in the heart of Mumbai.” The deal was in favour of the buyer with construction and land component less than Rs 12,000 a sq ft. Residential property rates hover between Rs 20,000 and Rs 25,000 a sq ft in the area, said Anand Gupta of the Builders Association of India. Pankaj Kapoor, managing director, Liases Foras, a property research and consultancy firm, said quoted prices at Byculla are not a benchmark for new projects when sales are not happening. The per sq ft rate of saleable area is about Rs 9,000 which, he said, was high as Rs 14,000-15,000 would be the price point that would sell in the locality. However, he flagged the fact that no land deal in Mumbai is bad, given the ability of developers to garner more FSI (floor space index, or the ratio of construction permissible in proportion to the land area) on one pretext or the other. “I would not be surprised if the current estimated FSI of 1.33 gets doubled,” he said. Referring to the current market scene, he said the sale velocity (or percentage sold versus stock) was 1.57 a month on an inventory of 1.80 lakh units in launched projects. Assuming that the project is scheduled for completion in 36 months, it would take 63 months to liquidate the stock which, he said, would be over six lakh sq ft. One might be able to sell some units at Rs 20,000 or more but would not be able to offload over six lakh sq ft at that rate.

Tagged as: collectorate, current, deal, government, mafatlal, mafatlal-industries, project, real estate developers, real estate india

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Vaswani Group to invest Rs 500 crore in projects across Bengaluru and Goa

by Paul Joseph April 15, 2011 Uncategorized

Vaswani Group, one of the leading real estate developers from Bengaluru, is all set to invest Rs 500 crore in projects across Bengaluru and Goa, during the current financial year. These new projects include 4-5 residential and one commercial project. The funds will be generated through a mix of PE funding at SPV level, debts and internal accruals. The company is currently in talks with 2-3 PE players for funding but refused to divulge their names. Here it deserves a mention that Vaswani group currently has projects in Mumbai, Pune, Bengaluru and Goa. Speaking to Realty Plus, Neville Vaswani, MD, Vaswani Group said, “This financial year our prime focus will be in Bengaluru where we plan to launch two big residential projects, one commercial and 2-3 small size residential projects. Further, we have one residential project in Goa as well. Broadly, we are looking at Rs 500 crores investments in all projects.” The company’s focus for this fiscal will be particularly in Bengaluru. Its immediate plan is to launch one residential and one commercial project in the first quarter of the current fiscal. ‘Vaswani Reserve’ at Sarjapur Road is an upscale residential project including 236 units comprising of 3, 4 and 5 BHKs. Priced at Rs 85 lakh onwards, this project mainly targets the 150-200 odd IT companies in the vicinity, and also the NRIs. The second is a commercial project named ‘Vaswani Presidio,’ located at Sarjapur road itself. The total built up area for both these projects will be about 650,000 sq. ft. Further, towards the second quarter, the company plans to launch a high-rise residential project at Whitefield, Bangalore with a built-up area of 400,000 sq. ft. The units here will be priced from Rs 50 lakh onwards. The second will be a villa project at Sarjapur Road which will be in the range of Rs 2.5 crore to RS 4.5 crore. Finally, in the last quarter , the company plans to launch a managed villa project in Goa whose clearances and approvals are yet to be received. Besides these five projects, the company also plans to launch 2-3 small-size non-FDI projects as and when the opportunity comes. “Currently Bengaluru’s residential market scenario is very buoyant, primarily because of the confidence level of the buyers due to the IT growth. Even on commercial side there has been remarkable growth, both in SEZs and non-SEZs. There has been 30 percent growth if we look at FY 2009-2010 and FY 2010-2011. We want to cash in on this opportunity,” asserted Vaswani. “We primarily work on the joint development model wherein our partners have a good understanding with us. Traditionally, we have never been driven by the number game, rather our focus has been on quality and on building relations with our customers and partners,” he further added.

Tagged as: bengaluru, confidence, current, financial, funding-at-spv, opportunity, project, property prices, real estate developers, real estate trends, sarjapur, targets-the-150

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Australian Company Raises its Stake Beyond 5% in Unitech

by Paul Joseph March 29, 2011 Uncategorized

Australia’s Platinum Investment Management has raised its stake in India’s second largest real estate firm Unitech to 5.16%. Platinum Investment Management has acquired 60,56,100 equity shares of Unitech, which is equal to 0.23% of the total paid up capital of Unitech, the realty firm said in a filing on the Bombay Stock Exchange. Before this open market transaction, Platinum had 4.93% stake in Unitech, the filing added. The promoters have 48.57% stake in Unitech. Share of Unitech today closed at Rs 39.30 on the BSE, down 2.48% from its previous close. At the current rate, 60,56,100 shares would have cost nearly Rs 24 crore. Gurgaon-based Unitech has about 10,000 acres of land bank mainly in Noida, Greater Noida and Gurgaon. It is present in almost all the verticals of real estate including housing, retail, offices and hotels. The company has recently announced that it would launch 10 million sq ft of area in the next three months.

Tagged as: bombay, bombay-stock, current, delhi, faridabad, greater-noida, gurgaon, india, management, platinum, real estate, second-largest, the-verticals, unitech, verticals

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Position Of Gurgaon property

by Paul Joseph March 24, 2011 Uncategorized

Similar to in most of the planet, recession has had unfavorable outcomes on the real estate promote of Gurgaon property also. This is the motive the selections in the Gurgaon land now move toward with original attractions and lesser rates. Even as the rates were comparatively high before the slump, the rates for the same as residential plots and commercial and the construction have hacked down in the current times. This has made the Gurgaon real estate a rewarding investment for the property investors. With the development in the infrastructure, the real estate of the Gurgaon County presents complexity and magnetism featuring the landmarks similar to the Gurgaon City Metro Rail and the Gurgaon-Delhi expressway et cetera. Additionally most of the business institutes have situated their head offices inside its environs making this region to come out as a business hub of the national and the multi-national business articles. This prepared the Gurgaon land to protect its region as a hot cake in the real estate market of the state till it was punch by the collapse which effected in lowering the price of the property on the total. Gurgaon is single of the developing cities in the India real estate , which has its separate method and form in construction. In spite of those who are eager to get repositioned to this metropolis, can find something along with their requirements and the budgets in the current real estae market scenario of Gurgaon. In the precedent, before the worldwide depression took its toll on the property market in India, the Gurgaon property was measured to be at the apex of the lists owing to its property value and its important positioning. The property markets witnessed an average per annum augment capable of thirty percent in the commercial value of the real estate inside the environs of the city, which presently slumped to fifteen percent per year. In the face of this decline caused thanks to the economic situations, the Gurgaon Real Estate has managed to magnetize the property investors.

Tagged as: business, city, construction, current, gurgaon, gurgaon property, gurgaon real estate, gurgaon-county, india property, infrastructure, lists, price, property, rates, real

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Hotel Leelaventure Plans to Raise its Borrowing Limit to Rs 5,000 crore

by Paul Joseph March 18, 2011 Uncategorized

Hotel Leelaventure is planning to raise its borrowing limit to Rs 5,000 crore from Rs 4,000 crore, for which it has shareholders’ approval through a postal ballot. “As the hotel industry is capital intensive and the company is expanding rapidly, the increase in limits of borrowing powers is required. It is therefore proposed to increase this limit from existing Rs 4,000 crore to Rs 5,000 crore,” the company said in a filing to the Bombay Stock Exchange. The board of the company in 2009 had fixed the current borrowing limit, which is now being sought to be increased. The results of the postal ballot will be announced on April 19, the company said. Hotel Leelaventure has set up a 80 room hotel in Udaipur, Rajasthan and a 260 room hotel in Delhi. It is also setting up a 329 room hotel and a commercial building in Chennai. “The total investment in these properties is about Rs 3,200 crore. The company has also invested in land in Pune and Hyderabad and plans to set up hotels in Agra and Lake Ashtamudi in Kerela,” the filing said. The company is currently in talks with four global private equity firms to raise Rs 600 crore by selling 14.9 per cent stake.

Tagged as: bombay, borrowing-limit, current, filing, hotel industry in india, hotel-leelaventure, leelaventure, postal, property prices, the-increase

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DLF Plans Land Acquisition in New Gurgaon and Chandigarh

by Paul Joseph February 3, 2011

DLF, the country’s largest real estate company, plans to make an average quarterly investment of 300-400 crore over the next couple of quarters to acquire land in areas such as New Gurgaon and Chandigarh to consolidate its land holding. With demand picking up in the housing sector, the company has already started its investment on land acquisition since the previous quarter. This has resulted in exceeding its capital expenditure by 500 crore during the third quarter of the current fiscal. “We are focused on both land acquisition and divestment of non-core assets,” DLF’s chief financial officer Ashok Tyagi, said in a conference call to its financial investors. Last quarter, the company sold some non-contiguous land, which was not giving much economic value, he added. The company has made 403 crore through divestment of non-core assets during the third quarter of the current fiscal, which took its total realisation from divestments to 2,900 crore.

Tagged as: banking and finance, chandigarh, current, housing, real estate, real estate developers

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Land deals worth Rs 400 cr in 20 days

by Paul Joseph December 9, 2010 Uncategorized

Western Ahmedabad’s real estate market has witnessed land deals to the tune of Rs 400 crore in just 20 days. Most of these deals are being grabbed by ‘hi-end’ residential schemes. The size of the plots sold range from 1,700 sq yard to 3 lakh sq yard. According to industry sources, one of the major deals is said to have been bagged for a 11,000 sq yard plot near Vivekanand chowk. The land is believed to have been sold for between Rs 80 crore and Rs 88 crore. The Jade Blue group also sold off their 26,000 sq feet building on S G Highway for a whopping Rs 18 crore. However, the current owners of both the plots — Babubhai Desai, owner of 11,000 sq yd plot beside Vivekanand chowk and CMD of Jade Blue Group Jitendra Chauhan — said the paper work is in process and therefore it is difficult to comment. Sources say, the other big plots that are likely to be sold off are an 8,000 sq yard plot in Law Garden area, a 38,000 sq yard plot in Sanand, a 11,500 sq yard plot near Vaishno Devi temple, Paneetar party plot in Thaltej and a plot next to Shalby Hospital on SG Highway. Several more small and medium-sized plots are up for sale, they said. These include plots for both residential and commercial projects. SCHEMES NOT FOR MIDDLE-INCOME Their sale is expected to begin towards the end of the current financial year. However, the since the plots are being sold at higher rates, realty experts are of the opinion that developers are planning hi-end projects and not affordable schemes for the middle-income segment. Subhash Shrimali of Metro City Home, a real estate consultancy, said: “We have recently witnessed land deals in the western part of the city as well as on the outskirts. At Sanand and SG Highway, people are buying land for affordable residential schemes. Reason being, the land deals taking place inside the city are pretty lucrative. Therefore, to come with affordable schemes, developers are buying land on the outskirts where it is available for anywhere between Rs 1,500 per sq ft to Rs 2,700 per sq ft.” The per sq feet rates of residential schemes in Ahmedabad city vary from Rs 2,200 to Rs 5,500, depending on the location, said the experts. Looking at the disparity in the land deals, Vijay Shah, a realty expert and chairman of real estate committee in Gujarat Chamber of Commerce and Industry (GCCI) told Mirror: “The real estate market is giving a mixed response. Investors from outside Gujarat (both NRIs and NRGs including people from other states) are pumping in money to secure land. They believe that there is bright future for real estate in the long run in Ahmedabad. However, the overpriced market is also foreseeing slight correction in the residential segmen

Tagged as: city, current, garden, industry, location, opinion, outskirts

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DLF Expects to Generate 2000cr from Sale of Non-Core Assets

by Paul Joseph November 12, 2010 Uncategorized

India’s largest realty firm DLF Ltd today said it expects to generate Rs 2,000 crore from the sale of non-core assets, including hotel plots, in the next 12-18 months. Against the medium-term target of Rs 5,500 crore, the company has raised Rs 2,507 crore in the last 18 months, DLF told investors in an analyst presentation. The company has decided to retain its wind-power venture, which was valued at Rs 1,000 crore. In the first half of the current fiscal, the wind power arm of the real estate major garnered Rs 707 crore. In the presentation, DLF said: “Total funds expected to be garnered over next 12-18 months is about Rs 2,000 crore.” The proceeds would be raised from land bank rationalisation and refunds from state government authorities. Meanwhile, in a conference call with analysts, DLF Executive Director (Finance) Saurabh Chawla said the sale of non-core assets would take place in new Gurgaon, where the company has surplus scattered land parcels. DLF said its net debt had reduced to Rs 19,913 crore as of September 30 from Rs 20,107 crore at the end of the first quarter. “Our continued focus on de-leveraging will continue with funds coming from operational cash flows and non-core asset investments,” DLF said. Stating that the current average cost of debt is 10.5 per cent, DLF said its debt-equity ratio currently stands at 0.73. Going ahead, the company said it will continue to use all free cash flows to reduce debt on an accelerated basis, as well as improve the tenure and quality of debt. It will also explore other possibilities for further reduction of debt costs. DLF hopes to achieve a net cashflow of Rs 750-1,000 crore each quarter from operations and recoveries. Chawla said the company expects rental inflow to amount to Rs 1,700 crore by the end of this fiscal. In the last two months, the company has leased out 2.5 million sq ft of area and expects to find takers for another 4.5 million sq ft by March, 2011. The company will launch more projects, including plotted development, in Gurgaon and Chandigarh in the coming quarters, he added.

Tagged as: current, dlf, pune, real estate developers, real estate trends

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