hyderabad

Hyderabad realty in consolidation mode

by Paul Joseph January 17, 2012 Uncategorized

The year 2012 has begun on a promising note with new projects being announced, a relatively stable political environment without much sign of a stir for the separate Statehood of Telangana, and a successful CII Partnership Summit, which was witness to the assurance of huge investment proposals. Builders hope these would create good vibes for the sector. The Hyderabad real estate market continues to consolidate after entering the new year, with prices still at three-year lows. Builders across segments, luxury housing, middle-income and affordable housing, believe that the market sentiment shows that it is still a buyer’s market. ROBUST GROWTH The General Manager of Ramky Estates, Mr Patnaik D. R.,

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Mahindra arm plans Rs 250 crore project

by Paul Joseph January 8, 2012

Mahindra Lifespace Developers, the realty arm of the $14.4-billion Mahindra Group, is setting its foot in Hyderabad, its fifth market in the country, with a one-million square feet residential project involving an investment of Rs 250 crore. “We are currently doing the site preparatory work. The project, on a 10-acre site at Kukatpally, will be

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Mahindra Lifespaces enters Hyderabad

by Paul Joseph January 5, 2012

Mahindra Lifespace Developers Ltd., the real estate and infrastructure development arm of the $14.4 billion Mahindra Group has been at the forefront of urban development by creating sustainable communities across the country. The company is now set to enter Hyderabad. Mahindra Lifespaces delivers quality living spaces to its customers for healthy living through consistent focus on thoughtful master planning and sustainable development. Clear and transparent transactions offer comfort and convenience to customers. The Company has developed premium residential and commercial properties in Mumbai, Pune, Delhi, Chennai. The company is also the forerunner in developing and delivering integrated and inclusive ecosystems for work, living and life through their Mahindra World City offering. Two such cities have already been developed and are operational in Chennai and Jaipur. Anita Arjundas Managing Director & CEO, Mahindra Lifespace Developers Ltd & Member of the Group Executive Board, said, “The focus of our strategy being SUSTAINABLE URBANISATION, we at MLDL wish to carry this development approach to the cities that are contributing to urban growth. Hyderabad being one of the fastest growing cities in India with a strong IT and pharmaceutical base, Mahindra Lifespaces would like to participate in this growth by offering quality residential developments built on the principles of sustainability. We are delighted to inform you that we are in advanced stage of planning our 1st residential offering in close proximity to Hitech City and will be launching it shortly. We consider Hyderabad our market of choice for our growth and we are exploring other opportunities actively in the city”. Mahindra Lifespaces’ footprint includes completed development of over 6.60 million sq.ft. of residential and commercial space spread across Mumbai, NCR, Pune and Chennai and over 9.87 million sq.ft. of ongoing and forthcoming projects in these cities as well as in Hyderabad and Nagpur. Mahindra Lifespaces’ focus is on striking a harmonious balance between inevitable and responsible urbanization. Its sustainable urbanization philosophy takes into account the social and economic aspects of development too. In essence, it takes up initiatives that help reduce the carbon footprint enabling residents to participate actively in the preservation of the environment. Mahindra Lifespaces has five residential projects that are ‘pre-certified’ Green Buildings’ & four projects under ‘applied for’ category. Its project Chloris at Faridabad has been rated as PLATINUM certified Green Building, under CII – IGBC green home rating system – India’s second completed residential development to achieve the highest rating in the multi-dwelling units’ category. Mahindra Lifespaces has pioneered the concept of ‘Mahindra World City’ – a world-class integrated platform for manufacturing and services businesses to operate in a business-friendly, hassle-free environment. Each integrated business city is designed to offer living, learning and recreation spaces which enables a self-fulfilling and convenient ecosystem for its occupants. Two such developments in Chennai and Jaipur cover 4,600 acres and house reputed global companies like Infosys, BMW, Cap Gemini, Deutsche Bank, Timken, Fujitec, Lincoln Electric etc. Mahindra Lifespaces has received industry recognition as a trend setter and innovator and has won several awards over the years. To name a few, the recognition of being India’s Top 10 Builders, by CONSTRUCTION WORLD for the 2nd successive year; the Economic Times ACETECH Real Estate Award 2010, for excellence in Mid segment (Exterior Architectural design); CNBC AWAAZ CRISIL CREDAI Real Estate Award, in the category ‘Best Residential Property in the Western Region’ for its project Eminente; The Realty Plus Excellence Award as the ‘Best Integrated Township of the Year’ for Mahindra World City, New Chennai & ‘American Society of landscape Architects 2008’ Award for Excellence in the Planning and Analysis Category (Mahindra World City Community Development Plan). Source: http://www.indiainfoline.com/Markets/News/Mahindra-Lifespaces-enters-Hyderabad/5325782924

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PEs forgo funds for project-based approach

by Paul Joseph January 5, 2012

Some real estate-focused private equity firms in India are opting to raise money from their investors, or limited partners, on a project-by-project basis, instead of a fund, as overseas investors shy away from putting money in risky assets. Fund managers are using the so-called club deals to survive in an extremely competitive PE market where an estimated 350-400 PE funds are jostling to raise funds. Even firms that are already managing a fund are opting for such a fundless structure, where the LPs co-invest and a small part of the fund is invested. “We have done such deals when the ticket size is large and we cannot commit so much money to one deal,” said Om Chaudhary, chief executive of First Indian Real Estate (FIRE) Capital Fund Pvt. Ltd, which has fully deployed its $121 million fund. “Club deals are helpful to both parties involved.” Fund managers who have been in the business for a long time continue to get opportunities to invest in attractive projects even when they have deployed their fund fully and are unable to raise a new one because of uncertain economic conditions. Such deals allow the PE firms to take advantage of such opportunities. At the same time, limited partners are also averse to paying fees to fund managers when deal flows are few and far between. The fund raising environment has become tough, as foreign investors have turned cautious about investing in Indian PE, especially in real estate, in the absence of expected returns. Lack of interest from investors has forced some PE firms, including Arka Capital, to shelve fund-raising plans. Arka, founded by Rajesh Khanna, a former managing director of Warburg Pincus India Pvt. Ltd, shelved its fund-raising plans last week, according to a 30 December report by VCCircle, an online news website. Arka was seeking to raise a $400 million fund. Early last year, Steer Capital, founded by former India head of PE firm Candover Plc, also shelved its fund raising plan. Out of PE investments worth $13 billion made in Indian real estate, only $3 billion of exits have been recorded so far, according to a report released in December by real estate consultant Jones Lang LaSalle India. The report also added that a lot of LPs would put indirect investments on the backburner and prefer either making direct investments or evaluate a presence in India through a separate account structure with a strong local fund manager. “With increased performance expectations on the part of LPs, the fund-raising environment is set to get tighter,” the report said. “Club deals will be more popular over the next few years as discretionary blind pools become challenging to raise,” said Sachin Shah, founder and managing principal of Samsara Capital, a real estate-focused fund. Samsara is in talks with some investors for club deals. Currently, there are 15 real estate-focused PE funds on the road to raise money. Club deals are more challenging as the manager has to tie up a deal before identifying the capital source, said Shah. Also each transaction could have a separate investor to deal with, he said. Such deals are common in more mature markets like Europe and the US where the real estate market is more deep as investors have the option to invest across several assets within real estate instead of backing just one fund with a fixed strategy. “This is a very visible change seen now and smaller real estate firms are opting for this structure,” said Amit Goenka, national director, capital transactions, Knight Frank India Pvt. Ltd. According to him, such deals may take longer to close as each deal has to be marketed to several investors. Source: http://www.livemint.com/2012/01/04204035/PEs-forgo-funds-for-projectba.html?atype=tp

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Puranik Builders plans three new residential projects in 2012

by Paul Joseph January 4, 2012 Uncategorized

Mumbai-based real estate company has announced plans to launch three new residential projects within the first two quarters of 2012. These projects will be launched in Thane, Pune and Lonavala, respectively. The company plans to invest Rs 700 crore in these projects over a span of three years. These funds will be generated through a mix of internal accruals and bank loans. Elaborating on the Group’s expansion plans for the year 2012, Shailesh Puranik, managing director, Puranik Builders Pvt Ltd, said, “Our Group plans to launch three new residential projects this year at Thane, Pune and Lonavala. While the overall project value of these will be in the tune of Rs 1,000 crore, we will invest Rs 700 in the next three years.” Sprawling over 1 million sq ft. area, the ‘Rumah Bali’ project at Thane is a residential project comprising 8-9 Towers of 30 storeys each. There will be more than 1,500 units of1/2/3 and 4 BHK priced at Rs 6,000 per sq ft. The second project at Pune — Sereno Espanola — will be spread over 40 acres of area and consist of more than 2,000 units of 1 / 2 and BHK and Villas of 4 BHK. The units will be priced at Rs 4,500 per sq. ft. The third project is a high-end villa project which is spread over 10 acres and will consist of 3 and 4 BHK villas priced between Rs 1-1.5 crore. Optimistic about the Real Estate scenario in 2012, Shailesh further added, “The new launches will happen within the first two quarters of this year and we hope to do good sales.” The company also has 500 acres of land bank in Pune, Sarjat, Murbad and Dombivali and it plans to launch new projects here in the next 2-3 years. Source:http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=17949&cat_id=1

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FDI in pension funds to source infra requirements: Assocham

by Paul Joseph January 3, 2012 Uncategorized

FDI in pension fund management companies will further increase the volume of assets that can be invested in infrastructure. India needs one trillion dollars (about Rs 52 lakh crore) for infrastructure investments in 12th plan (2012- 17), Assocham said in a statement. Allowing FDI in the pension sector would enable the country to raise the share of fund assets to GDP from current level of 5 per cent to 17 per cent. This in turn can result in assets worth $166 billion (about Rs 8.6 lakh crore), industry body Assocham said on Monday. FDI in pension fund management companies will further increase the volume of assets that can be invested in infrastructure. India needs one trillion dollars (about Rs 52 lakh crore) for infrastructure investments in 12th plan (2012- 17), it said in a statement. The global funded pensions market (both occupational and work related) is estimated at $24.6 trillion of which $16.2 trillion are held by pension funds. Permitting FDI in pension funds will give access to global pension fund companies to the vast untapped Indian market, Assocham in its study titled ‘Case for Allowing FDI in Pension Funds,’ said. A 2.1 per cent allocation of total pension fund assets to India would increase its reserves to $342 billion – about the same in Brazil in 2010. “Going by the world trends, equity allocation of these could be as high as $160 billion. A CAGR of 16.5 per cent as witnessed in Brazil will result in total pension assets of $734 billion of which equity will be $345 billion,” Assocham Secretary General D S Rawat, quoting the study, said. Even if one-third of it goes into infrastructure development, it would mean an investment of over $100 billion – or one-tenth of total requirement in the 12th Plan period. At present, pension and insurance funds have a limited presence in the Indian markets due to regulatory restrictions. In 2011-12, only 4.7 per cent of funding requirement – or Rs 13,289 crore – is likely to have come from pension and insurance funds compared to 10.5 per cent or Rs 29,851 crore from external commercial borrowings. The estimated debt requirement is to the tune of Rs 2.84 lakh crore in current fiscal and Rs 9.88 lakh crore in the 11th plan. The government has introduced in Parliament the Pension Fund Regulatory and Development Authority (PFRDA) Bill which will pave the way for 26 per cent foreign investment in pension fund management companies. The allocation of pension assets typically is 47 per cent in equity, 33 per cent in bonds, one per cent cash and the remaining in other areas. In India, 22.9 per cent could be in equity, 16.1 per cent in bonds and the rest in others. If pension funds are diverted to infrastructure projects, they bring long-term income streams, stability, predictable cash flows, low default rates, project diversifications and societal benefits. “It is imperative that financial sector reforms continue to offer products and services for meeting financing and risk management needs of infrastructure projects,” said the ASSOCHAM study. A vast majority of India’s population is not covered by any formal old-age income scheme and is dependent on their earnings or transfer from family members. The unorganised sector has no access to formal channels of old-age economic support. Only 12 per cent of the working population in India is covered by some form of retirement benefit. The implications of demographic dynamics for pension planning become more evident when one takes into account the average life expectancy of 77 years which is likely to rise to 80 in the next three decades. The population above 60 years of age by 2030 will approach 200 million. “Large-scale reforms are thus required to ease the pressure on treasury to provide for a social security net for growing number of senior citizens as well as growing workforce,” it said. Source: http://profit.ndtv.com/News/Article/fdi-in-pension-funds-to-source-infra-requirements-assocham-295190

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NBFCs’ importance goes up in sluggish property market

by Paul Joseph January 2, 2012 Uncategorized

Non-banking finance companies (NBFCs) will give private equity (PE) firms a run for their money in the realty sector this year, as developers fight falling home sales and tight bank credit. Many PE firms did structured or mezzanine debt deals in the past two-three years. The rates were 25-26 per cent, and they’d down-sell it to NBFCs at 17-18 per cent and exit. Now, NBFCs are directly doing straight debt deals with developers at 18-22 per cent, Business Standard reported, citing top property consultants. According to consultancy Jones Lang LaSalle, there are at least 20 NBFCs active in real estate lending, compared to six-odd just three years before. Along with the established players such as HDFC, DHFL, LIC Housing Finance and Kotak, there are a number of new ones such as Indostar Capital Finance set up by Ashmore Group Plc, Everstone Capital, and the PE arm of Goldman Sachs; also Piramal Capital, the NBFC set-up by the Ajay Piramal Group; the NBFC floated by the Xander group, and Edelweiss Capital. All are active in real estate lending. “Increasingly, NBFCs are realising they can do debt deals directly and take exposure to realty projects than buying debt papers from PE firms. They think they can do all the due diligence themselves and take charge on the projects,” says Raja Kaushal, managing director, real estate and infrastructure advisory, BNP Paribas. Pointing to the Rs 810-crore deal between PE giant Blackstone and realty majors DLF and Hubtown for the Pune Special Economic Zone, he says while the big PE firms would chase larger deals, “NBFCs have come into play due to a quicker turnaround time, flexibility in end-use and size of funds.” On the other side, consultants and fund managers expect a significant shortage of funds in the PE arena. Around $3 billion (Rs 15,900 crore at today’s exchange rate) of funds raised in 2006 and 2007 are set to exit in 2012, as their funding cycle is coming to an end. Only a handful such as Indiareit, Kotak, HDFC and Red Fort are raising new funds now, they point out. PE investments in real estate were $0.85 billion (Rs 4,505 crore at the current exchange rate) in 2011, according to JLL. It was $6.7 billion in 2007 and $3.3 bn in 2008. Against this, NBFCs have deals worth Rs 3,000 crore in the current year and this is set to rise next year, says Amit Goenka, national director, capital transactions, at UK-based global property consultant Knight Frank. “The PE business is on a decline and it is only a matter of time before NBFCs will take over the business of PE firms in real estate,” says Goenka. “Only a handful of PE players have made money in real estate private equity.” Source: http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=17935&cat_id=2

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Groundwork begins for Rs 1,200 crore industrial park in Delhi

by Paul Joseph January 2, 2012 Uncategorized

The Delhi government’s premier infrastructure development agency, DSIIDC, has started groundwork for setting up of a knowledge-based industrial park in South West Delhi at an estimated cost of Rs 1,200 crore. The park, which will be developed over an area of 77 acres, is expected to provide direct employment to nearly one lakh people and indirect employment to another 2 lakh. DSIIDC chief managing director Chetan Sanghi said the the park’s design had been approved by the government, and the MCD was currently considering the building plans. “The design of Knowledge Park has been approved. The DDA has approved the land use change. The MCD is considering the building plans. The work should start by June,” Sanghi said. In developing the IT park, the government is following the model of the Nokia SEZ in Chennai where setting up of the Nokia plant led to various vendors such as Salcomp, Aspocomp, Foxconn and Wintek establishing their manufacturing units. Asked about the plan to redevelop the industrial estates, he said the work on improving infrastructure in Narela and Bawana industrial estates had been awarded to private entities under a PPP model. The private entities would also maintain the two estates for next 15 years. “Work has started on the ground in Narela and Bawana. Patparganj and Okhla industrial estates also will be given on PPP mode in the next three months,” Sanghi, who is also Secretary of Industries Department of Delhi government, said. Delhi has 29 industrial estates whose maintenance has been handed over to DSIIDC as per provision of a new legislation — Delhi Estate Industrial Development Operation and Maintenance Act, 2010. The MCD and the DDA, which are running some of the industrial estates, are expected to hand over administrative control of the estates to the Delhi State Industrial and Infrastructure Development Corporation Ltd (DSIIDC) in next few months. “The MCD has been directed by the Lt Governor to do so and the MCD has agreed. The DDA has also agreed to transfer the lease administration,” he said. Asked whether Industries department has sought amendment in land use norms in the Master Plan of Delhi 2021, he said government was of the opinion that service industries should be allowed in industrial estates. Source: www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=17926&cat_id=1

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Sewree flat sold for Rs 5.25 cr

by Paul Joseph December 30, 2011 Uncategorized

A residential apartment measuring approximately 1,500 square feet in Sewree was sold for 5.25 crore. This was one of the new developments which is amongst the premium developments in the area and is equipped with all modern amenities such as gymnasium, swimming pool, garden among many others. The location is well connected and enjoys proximity to the office districts of Nariman Point and BKC. The social infrastructure of the area includes several education, healthcare and retail developments which have added to the attraction of the place. New Delhi In a recent transaction, a newly-built apartment in Vasant Vihar, admeasuring 2,200 square feet, was leased at a monthly rent of approximately 300,000. The apartment has 4 bedrooms and a terrace garden and is newly constructed with all modern amenities. This prime South Delhi location has always been an established residential district which offers high-end developments and is preferred by expatriates and consulate members for its proximity to the office districts, international schools and established retail destinations. Source: Cushman & Wakefield Source: http://economictimes.indiatimes.com/markets/real-estate/news-/sewree-flat-sold-for-rs-5-25-cr/articleshow/11299483.cms

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GMR completes 30% stake sale in Singapore arm to Petronas

by Paul Joseph December 29, 2011 Uncategorized

GMR Infrastructure had completed sale of 30 per cent stake in its Singapore-based subsidiary GMR Energy to Malaysian oil and gas major Petronas for about SGD 50 million. “The transfer of [30 per cent] shares [in GMR Energy] to Petronas Power Sdn Bhd [PPSB] — a power subsidiary of Petronas International, was completed on December 27 for a consideration of SGD 50 million,” GMR Infrastructure said in a statement. It added that the stake sale, announced in September this year, was done after getting approval from the lenders of GMR Energy. The company is developing an 800 MW Combined Cycle Gas Turbine power plant on Jurong island in Singapore. The statement further said that Petronas has also paid SGD 19 million equivalent towards the 30 per cent shareholder loan contributed by GMR to date. Besides this, the Malaysian oil and gas major would also be “contributing to future equity requirements of the project prorated to its 30 per cent stake. In addition, Petronas International has become a joint sponsor of the project,” the statement added. The power generating facility of GMR Energy is being constructed by a consortium of Siemens and Samsung. It will be fuelled by re-gassified LNG and is scheduled for commercial operations in 2013. The acquisition of 30 per cent stake in GMR Energy marks Petronas group’s maiden foray into the international power market. GMR Supply Singapore Pte Ltd, a wholly-owned subsidiary of GMR Energy, that holds an electricity retail license in Singapore, would manage the electricity retail business.

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