INDIA PROPERTIES

Venture Capital Funds: End Of An Era

2007-10-24T04:14:00.000-07:00

The real estate India sector has attracted investments from numerous quarters, including offshore jurisdictions. Offshore funds have led the pack of investors by utilising tax efficient structures spanning across jurisdictions. However, as a result of certain changes introduced in the Budget 2007, investors have been compelled to revisit their strategies related to structuring of investments in Indian realty sector. This article examines the impact of these fiscal changes in the long term structural strategy of funds.

Offshore funds used Indian venture capital funds ("VCF") as their India-based conduits to channel investments into Indian companies engaged in the business of real estate during the last two years. The choice of VCFs as entities for structuring the Indian end of investments was tax-efficient because of the benefit of a "pass-through" status available to VCFs under the Indian tax laws pre 2007. (Indian VCFs, whether existing or newly organized, who wish to avail of the tax benefits available to venture capital funds under the Indian Income Tax Act, must register with the SEBI under the VCF Regulations and comply with the SEBI Venture Capital Fund (Regulations), 1996. )

Source://mondaq.com

IHG Lines Up Large Asia/Pac Expansion

2007-10-12T00:16:00.000-07:00

InterContinental Hotels Group today announced record company growth in the Asia/Pacific region this year, with 80 hotels signed in the past 12 months and brands entering several markets in which they previously had no presence.

Of the 80 hotels signed in the last year, more than two-thirds will be in China, Japan and India, according to IHG. About the same percentage will be new construction, while the rest will be conversions of existing properties.

Under the development plan, IHG's upscale brands InterContinental Hotels & Resorts and Crowne Plaza Hotels & Resorts will make their debuts in Melbourne and Adelaide, Australia; Hanoi and Ho Chi Minh City, Vietnam; and Hangzhou and Qingdao, China. Crowne Plaza also will launch six hotels in Japan later this year as part of a joint venture with ANA (BTN, Nov. 6, 2006).

Midprice Holiday Inn Hotels & Resorts, meanwhile, is focusing on its growth in India, and is adding hotels in Maldives, Bangalore and Pattaya, Thailand. The Holiday Inn Express brand launched a franchising program in China this year, and the brand also plans to introduce hotels in Singapore and Bangkok.

IHG also reports growing its offices in the Asia/Pacific region. It has introduced a training academy in Shanghai and has doubled the headcount at its corporate offices in Shanghai, Sydney, Singapore, New Delhi and Tokyo in the past two years.

Source://btnmag.com

Indians stake claim on prime properties in London

2007-09-10T23:53:00.000-07:00

London is fast becoming a second home to rich Indians. It is no longer a metaphor but literally true - more and more Indians are buying homes in the British capital.

Last year 60 per cent of the £5 million-plus properties sold in Central London were bought by foreigners. While many of these were Russians and Americans, Indians were giving them a run for their money too. "My phone is ringing off the hook with Indians eager to buy property in London," said Jaideep Singh, head of the India desk at Knight Frank, real estate agents that specialise in properties in Central London.

"Two years ago there were hardly any Indians wanting to buy in London, except for those already living here. In the last year and half we have seen a phenomenal rise in interest," Singh told DNA.

Knight Frank's India desk is ten years old, but till now it had dealt mostly with resident NRIs. The interest from Indians has even forced Savill's estate agents, Knight Frank's main competitors, to set up an India desk and hold a roadshow of luxury properties in India.

"They want as prime as it gets," said Sheetell Chantel Halai, head of Savill's India desk. The most popular areas for purchase by Indians are the most exclusive areas of the capital like Belgravia, Mayfair, Knightsbridge, Oxford Street, Marble Arch, St. John's Wood and Kensington. There are also those who wish to buy in Ealing and Southall to be near friends and relatives who live permanently in West London.

Resource://dnaindia.com

HDIL to buy HMT's Kochi property for Rs 200 cr

2007-09-03T02:30:00.000-07:00

According to sources, HDIL is in talks to buy HMT's 7 million sq-ft property in Kochi. The HDIL-HMT land deal size is likely to be about Rs 200 crore, the sources added. At this amount, it will work out to Rs 5 per share for HMT. The management has not responded on the deal yet.

From the earlier managements of HMT, it is learnt that they were eventually looking out for this kind of a value for most of their properties across India. There is no information on exact deal sizes and exactly how much these properties could be valued at.

HMT has about 100 acres of land in Kerala, around 800 acres in Haryana and around 500 acres in Hyderabad. Haryana being a prime property, it could fish out the maximum value of all the four India properties they have across pan . As of now, there is no word from the management of HMT.

HDIL too has refused to comment on the development. But of late, HDIL has been on a buying spree. They recently signed an MoU to buy Eveready’s 15 acre property in Navi Mumbai for Rs 115 crore. They are also buying Kilburn’s 8.32 acres in Bhandup for Rs 124 crore.

Source : //moneycontrol.com

US realty firm Hines to invest $300 m here

2007-08-28T21:55:00.000-07:00

The US-based real estate developer Hines has drawn up plans to invest up to $300 million in Real Estate India over the next two-three years to develop real estate projects worth over $1 billion. Using a multiple partner strategy, Hines plans to have at least a 50% equity stake in each project it undertakes, senior company executives told ET.

The realty major has identified FDI-compliant projects in high-end office and residential spaces, mixed-use townships, IT SEZs and large format mixed-use retail, commercial and hospitality projects.

“We are currently involved in projects in the National Capital Region, Mumbai, and Bangalore, we also exploring opportunities in Kolkata and Hyderabad,” Hines India Real Estate joint MD Yash Gupta told ET.

Hines India on Friday announced its first project in the country through a 50-50 JV with real estate major DLF for co-developing a high-rise office complex, high-end retail space, hotels, service apartments, and an entertainment centre in Gurgaon, spread over 15 acres, near DLF Golf and Country Club.

The first phase of the project will include a 30-storey office tower, with retail space in the ground floor and a large parking garage, with plans for a second office tower. In all the mixed-use complex will involve construction of around 2.5 million sq ft.

Mr Gupta said the company has been involved in development of several large format mixed-use complexes globally, including those in Barcelona, Paris, Milan and Washington DC. Hines is a privately owned real estate firm engaged in real estate development, investment, and property management worldwide.

It has presence in 16 countries, with offices in 96 cities with total assets currently under its management valued at around $16 billion. In all projects it is currently involved in, Hines will work in association with a local partner, Mr Gupta said.

Resource://indiatimes.com

ITC draws up nearly US$ 2 billion investment plan

2007-08-24T04:03:00.000-07:00

ITC Hotels is looking to accelerate its growth in the luxury segment as the group's chairman, YC Deveshwar, announced an investment of approximately US$ 2 billion, spread over a period of seven years.

Three properties will come up in Bangalore with one hotel each in Chennai, Ahmedabad and Kolkata. While the one in Chennai is claimed to be the country's largest luxury hotel, the properties in Bangalore will be in the super-deluxe category. The other two cities will get seven-star hotels.

The hotels business maintained its upward momentum in the current quarter with segment revenues growing by 11 per cent to touch Rs 221 crore, driven by improved RevPAR in most properties and higher F&B sales. ITC had recently entered into a new phase of its franchise agreement with Starwood Hotels & Resorts for bringing in its premium brand 'Luxury Collection' to India through seven of its properties: ITC Maurya in Delhi, ITC Maratha in Mumbai, ITC Sonar Bangla in Kolkata, ITC Grand Central in Mumbai, ITC Windsor in Bengaluru, ITC Kakatiya in Hyderabad and ITC Mughal in Agra. The agreement included the rebranding of WelcomHotel New Delhi as a Sheraton, while the Chola and the Park in Chennai and the Rajputana in Jaipur continued to retain their Sheraton connections

Source://expresshospitality.com

Maharashtra govt tables ULCRA repeal Bill

2007-08-01T04:23:00.000-07:00

Buckling under pressure from the Centre, the Maharashtra government finally tabled the Bill to repeal the Urban Land Ceiling and Regulation Act (ULCRA) in the state legislature today. The matter will come up for discussion tomorrow.

Though Maharashtra is set to be the 10th state to rescind the Act, the impact of the repeal on Mumbai’s realty market is going to be minimal. A major chunk of surplus land is covered by the Coastal Regulatory Zone (CRZ), No Development Zone (NDZ), forests and slums.

Introduced in 1976 with an aim to provide affordable housing to lower- and middle-income groups in urban areas, the Act prohibits any individual from holding more than 500 sq mt of land.

However, companies and trusts were exempted from this provision with a catch that they could use the land only for the purpose for which they had been set up. They were barred from trading these lands or developing housing schemes on these lands.

The Assembly has merely three days in the current session to take up the Bill and it is unlikely that both the Houses of the state legislature would give their nod converting it into a law.

After the Act was repealed by the Centre in 1999, each state had to repeal the respective Act by passing separate Bills since land is a state subject. Taking advantage of this fact, Maharashtra government, along with nine other state governments including Tamil Nadu, West Bengal and Jharkhand chose not to repeal the Act.

However, Jawaharlal Nehru Urban Renewal Mission (JNURM), under which states get funds from the Union government for urban infrastructure projects, made it mandatory to repeal land ceiling Acts to get the aid.

In the absence of repeal of ULCRA, the Maharashtra government, which has planned infrastructure projects worth Rs 40,000 crore for Mumbai’s makeover, stands to lose nearly Rs 10,000 crore as central aid under JNURM.
Source://business-standard.com

India Unilever shares up on property sale report

2007-07-24T23:40:00.000-07:00

Shares in India's top consumer goods maker, Hindustan Unilever Ltd. (HLL.BO: Quote, Profile , Research), rose more than 2 percent on Wednesday on speculation it was selling some of its prime properties, but the company denied it was doing so.

The company has begun the process of selling some of its real estate assets, including its Mumbai headquarters and some residential assets, the Economic Times reported.

It said Hindustan Unilever was likely to earn big gains on sales of its properties in Mumbai and Bangalore, where real estate prices have surged.

A spokesman for the company said the report was wrong.

"The speculation that we've initiated a process to sell India properties across is wrong," he said.

"We do assess options for our idle assets, but that is on an ongoing basis, and there is no separate process that we have initiated for them," he said, referring to the report that said the company was assessing options with property developers.

Shares in the company, 52-percent owned by Anglo-Dutch Unilever Plc (ULVR.L: Quote, Profile , Research) (UNc.AS: Quote, Profile , Research), rose as much as 2.2 percent in early deals and were up 1.3 percent at 202.30 rupees at 0605 GMT.

Hindustan Unilever has been divesting some smaller units to focus on its core portfolio, which includes Lux soap, Surf detergent, Lipton tea and Wall's ice-cream.

The company is forecast to report on Sunday a 14 percent increase in its April-June net profit to 4.36 billion rupees ($108 million). For the poll, please double-click on [ID:nBOM187887].

Its board will also consider its first-ever buyback of shares, which analysts expect will be up to 1.5 percent of its outstanding equity, or 33.15 million shares.

"There is a positive sentiment around the stock because of the buyback, and talk about the company selling some properties is boosting that sentiment," said a trader. ($1=40.3 rupees)

Commercial rentals at all-time high in Delhi

2007-07-11T23:53:00.000-07:00

In the last couple of months, rentals of central and suburban business districts of Delhi (CBD & SBD), comprising areas such as Connaught Place and Nehru Place, have touched all time highs. On the other hand, for the first time in the last half a decade or so, commercial rentals in the satellite towns, comprising Noida, Gurgaon and Faridabad, are showing signs of a slowdown in growth. Experts are at-tributing this slowdown to mainly two factors—an over supply of commercial space in the satellite towns and the impending develop-ment of a new SBD in Delhi itself, at Jasola.

Rentals in the CBD are about Rs 325 per sq ft per month now, and have gone up by 7-8% quarter on quarter (q-o-q) basis and by 50-80% on year on year (y-o-y) basis.

In the SBD, rentals have witnessed a considerable increase of about 15-20% q-o-q and 50-70% y-o-y and is close to Rs 250 per square feet per month. In case of the satellite towns of Noida and Gurgaon—at about Rs 40-50 per square feet per month and Rs 100 per square feet per month, respectively—rentals have remained stable q-o-q and have increased by 30-40% y-o-y.

Going forward, there could also be correction in certain NCR markets. For instance, in case of Noida the total commercial supply estimated in 2007 is about 5.6 million square feet.

According to a report by real estate consultancy DTZ, “this is far in excess to the projected absorption of 3.3 million square feet and, hence rentals should fall or, at best, remain stable.”

“In the next 5-6 months, we expect the growth in rentals to stabilise. In some cases, there could be minor corrections as well,” says DTZ India director Vivek Dahiya. According to brokerage firm Realty Realtors MD Harinder Singh, the overall growth in the Delhi and NCR rental market in the next one year will be about 20%, as against a 50-60% growth registered over the last one year.

On the other hand, Jasola in South Delhi is expected to see develop-ment of slightly over 2 million square feet of commercial space, almost 75% of which has already been booked. Prominent companies in the area include DLF, developing 7 lakh square feet property, TDI with about 1.5 lakh square feet space, and Omaxe with 1.5 lakh square feet property.

The Delhi Development Authority (DDA) is likely to auction some more commercial plots in Jasola later this year.“Jasola will attract much more interest from MNCs as well as retail chains as compared to the neighbouring Noida or any other satellite town in the NCR, because of being situated in Delhi. Proximity to some posh locations of south Delhi, Noida and Faridabad will act as a further catalyst to the demand,” says TDI MD

According to Omaxe chairman Rohtas Goel, this slowdown will only be a temporary phenomenon. “While a lot of commercial activities will gradually shift to areas inside Delhi, such as Jasola, the feared over supply in the satellite towns will also only last till one year and will get absorbed. There will obviously be minor corrections,” he said.

Resource:indiatimes.com

DLF listing to double market cap of real estate sector

2007-07-05T03:47:00.000-07:00

Market capitalization of the real estate sector in India will more than double, from Rs80,343 crore to Rs1.7 trillion, even if the Delhi-based realtor DLF Ltd stock gets listed on Thursday at its issue price of Rs525 a share.

Following this, the real estate sector’s market cap on the Bombay Stock Exchange (BSE) will jump from 1.9% of the total market cap of BSE to 3.94%. The exchange does not have any index for this sector. Neither does Sensex have any representation from the real estate sector.

A comparison with the emerging markets of Brazil, Russia and China shows that the share of real estate in the Indian market will be almost double that of Brazil and one and a half times of China.
The market share of listed real estate companies is 2.13% in Brazil and 2.63% in China. In Russia, where only five real estate companies are listed, it is 0.08% of the total market cap.
Mint’s research took into account only those companies that are in the real estate development business and excluded real estate-related financial offerings such as real estate investment trusts (Reits) that account for a significant percentage of the markets in Singapore and Brazil.
In India, Reits do not exist by law.

Worldwide, the real estate market grew from $368 billion (Rs15 trillion) in 2002 to $1.2 trillion in 2006. Of this, $651 billion was in Reits and $563 billion was in non-Reits. In 2002, comparable figures stood at $211 billion for Reits and $157 Billion for non-Reits.
Among Asian markets, property stocks have higher weightage on the index in Hong Kong.
The real estate stocks there account for 10.83 % of the total market cap. In Singapore it is 12%, Taiwan 11.5% and Thailand 6.5%. In Japan, however, property stocks are 3.09% of the total market cap and in Indonesia it is 3.6%.

Analysts have pointed out that the doubling of the market cap of Indian real estate stocks would send a positive signal to investors worldwide that the Indian markets have come of age.
Concurs Anuj Puri, chairman, Jones Lang Lasalle-Meghraj, a real estate advisory: “It will send out a positive signal to the international developers that real estate in India is no longer a small ticket business. It will attract the big developers in Europe to India.”

So far, two of the biggest developers from the US, Tishman Speyers and Hines, have set up India offices but European firms have typically stayed away from India.
Yash Gupta, joint managing director of Hines’ India operations, said: “The DLF issue shows the belief of the mature investor in the sector and the India story.”
Not everyone believes the sector is anywhere close to having the impact that it does on other developed stock markets.

Ashish Kalra, managing director, Trinity Capital Llc., believes the Indian real estate market has a long way to go before it reaches the volumes that drives the US and other mature markets.
Source:livemint.com

India to generate 25% revenues for Emaar

2007-06-25T22:24:00.000-07:00

The boom in real estate India sector may have a rub-off effect on global players. For Dubai-based real estate major Emaar Properties, with revenues of $3.8 billion in 2006, India is a key international market that would account for 20-25% of its global revenues by 2010. Currently, almost 80% of Emaar’s revenues come from projects in the Dubai market.

However, by 2010 the group expects the share of its international projects in its top line to be around 70%, with the Dubai market accounting for the remaining. Apart from markets in United Arab Emirates, Emaar Properties has presence in more than a dozen countries including United States, United Kingdom, Saudi Arabia, Syria, Jordon, Turkey, Lebanon, Egypt, Indonesia, Singapore, and Canada.

“India is a very important market in our international operations which is likely to account for up to 25% of our global revenues by 2010,” said Emaar Properties CFO Amit Jain.

The Middle East-based real estate giant, as part of its plans to replicate the model of large-scale development of master-planned communities involving commercial, residential, retail and hospitality projects in markets across the globe, has earmarked investments to the tune of $12 billion over the next five years in India.

On the drawing board are setting up the country’s largest shopping mall complex and the tallest building, senior company executives said. Emaar is present in India through a joint venture with Delhi-based MGF Group.

“Several model projects are in the offing in India over the next six months,” said Shravan Gupta, managing director, Emaar MGF India. Emaar MGF has also qualified for development of the Commonwealth Village in Delhi that would house over 8,000 athletes and officials in 5,000 dwelling units.

Plans are also in the offing to replicate Emaar’s flagship project Burj Dubai in India, though on a much smaller scale. The ongoing $20 billion-Burj Dubai project, spread over one-square kilometer in downtown Dubai, includes the world’s tallest building, 30,000 residential units, nine hotels with 2,000 rooms and over 5 million square feet of shopping space in The Dubai Mall.

Emaar executives claimed that by August this year, Burj Dubai is expected to replace the 509-meter tall Taipei 101 tower in Taiwan, as the world’s tallest building. Burj Dubai has already bagged the second tallest building in the world tag with 134 floors and adding one floor in three days - with a height of 484 meters, overtaking the likes of Sears Tower, The Petronas Twin Tower, and the Empire State Building.

Mr Gupta said currently only Delhi and Mumbai markets have the potential to support the development of such tall buildings, with well-defined residential, commercial, hospitality and retail spaces. “We are looking at Burj-like developments in India but on smaller scale as compared to the Dubai property,” he added.

The India story for Emaar does not end with its investments in India. Over 40% of buyers for Emaar’s properties in Dubai are from the Indian subcontinent. “This more or less is in line with the demographic profile of Dubai,” said Mr Jain. There has been a growing interest from NRIs and high net worth individuals from India in Dubai’s housing market, he conceded.

Talking to ET, Mr Jain said the proposed initial public offer of Emaar MGF next year would largely fund the development of the ongoing projects in the country. “While this gives us access to cheap capital for development of projects, it would also help to bring more discipline in the local operations,” he added.
source://indiatimes.com

Top local real estate firm DLF Ltd. opens India biggest IPO

2007-06-12T04:00:00.000-07:00

The Top real estate India company, DLF Ltd., began taking orders from investors Monday for its initial public offering of shares in what will likely be India's biggest IPO ever.

DLF is offering 175 million new shares to the public in a price band of 500 rupees to 550 rupees, the company said. If all shares are subscribed, the company will raise between 87.5 billion rupees (US$2.1 billion, euro1.6 billion) and 96.25 billion rupees (US$2.35 billion, euro1.75 billion) depending on the cut off price.

A successful listing would boost the net worth of Chairman K.P. Singh and immediate family members, who together own 97.4 percent of the company, to more than US$18 billion (euro13.4 billion).

The sales end Thursday, and the stock is expected to list on the Bombay Stock Exchange as well as the National Stock Exchange by end of June.

India's largest IPO until now was that of Britain's Cairn Energy, which listed its Indian subsidiary on the local stock exchanges in December, raising 58 billion rupees (US$1.4 billion, euro1.1 billion)

India's booming economy, which is growing at close to 9 percent annually, has seen property prices soar in recent years, bringing windfall gains to companies like DLF that hold large land reserves on the outskirts of major Indian cities. Those were bought from farmers at rates much lower than the current market price.

However, the growth in the property market has slowed in recent months because of high prices and a series of interest rate hikes, most analysts and research groups feel the lull is temporary.

DLF's IPO is expected to be subscribed at the higher end of the price band, making it a US$23 billion (euro17 billion) company in terms of market capitalization, nearly twice that of its nearest rival Unitech Ltd., valued at about US$12 billion (euro9 billion).

DLF, the country's largest real estate firm in terms of the area it has developed, first tried to make a public offer last year, but scrapped the plans amid a stock market meltdown and disputes with minority shareholders.

The company plans to spend nearly 70 billion rupees (US$1.7 billion) from the IPO proceeds on acquisition of more land and construction of ongoing projects, DLF said in a filing with stock market regulators. The rest would be used to pay loans before they mature, it said.

Source://chinapost.com

Construction boom in Kovai

2007-06-05T03:56:00.000-07:00

Real estate development in Coimbatore looks all set to peak, according to builders’ estimates, with takers for luxury apartments and residential complexes expected to rise in the coming year.

“We see much scope in Coimbatore since it promises a lot of development in the next few years,” said Nirmal Gadhiya, Director of Chennai-based Deccan Estates and Constructions Limited.

The company has ventured into Coimbatore with its ’All Seasons Luxury Apartments’ at Ramanathapuram, which include facilities like an aerobics room, gymnasium and swimming pool.

Expected to be completed in the next two years, the price for an apartment would range from Rs 30 to Rs 40 lakh.

Deccan Estates had also finalised land at the Race Course to cater to the needs of high-end customers, Gadhiya said.

The city already has players like Jain Housing, Mayflower Enterprises, Srivari and Presidium Constructions.

True Value and Real Value, both Chennai-based companies, have started work at Coimbatore, while Delhi based Orchid has submitted plans to develop a township at Kalapatti.

According to G Srinivasan, Chairman of Coimbatore unit of the Builders’ Association of India (BAI), “Most of the developers are targeting middle and upper middle class residents.”

“With the manufacturing sector looking up and the IT Park coming, the demand for housing projects is bound to go up. There are lots of companies coming in, including the Belgium-based Hansen Transmissions International NV and aN L&T plant,” said Jayakumar Ramadoss, former Chairman, CII.

Source://newindpress.com

India's top real estate firm upbeat on IPO, owner set to join world's billion

2007-06-01T04:22:00.000-07:00

The top real estate india company, DLF Ltd., is confident of a strong response to its initial public share offering - the biggest in Indian stock market history � when it opens next month despite tapering house price rises, it said Wednesday.

A successful listing will propel Chairman K.P. Singh and his family that owns 97.4 percent of DLF into the league of the world's richest, giving them a net worth of more than $18 billion.

DLF is offering 10.26 percent of its equity, or 175 million shares, to the public in a price band of 500 rupees to 550 rupees. If all shares are subscribed, the company will raise between 87.5 billion rupees ($2.1 billion) and 96.25 billion rupees ($2.35 billion) depending on the cut off price.

"We are very, very confident of the response we will get," Singh told reporters. "Those who don't buy (DLF shares) today will realize they lost an opportunity to make money," he said.

The initial public offer of shares will open on June 11.

India's booming economy, which is growing close to 9 percent annually, has seen property prices soar in recent years, bringing windfall gains to companies like DLF that holds large land reserves on the outskirts of New Delhi and other major Indian cities and towns. Most of the land was bought from farmers at rates much lower than the current market price.

Although, the growth in the property market has slowed in recent months because of high prices and a series of interest rate hikes, most analysts and research groups feel the lull is temporary.

The housing shortage in the country is currently estimated at more than 20 million units, while demand for shops, malls and office space continues to outpace supply and has pushed prices of commercial real estate to record levels.

"People say there is an asset bubble (in the real estate). It's a figment of imagination," Singh said. "It's the sunrise industry."

With the mood in the stock market staying upbeat, analysts see DLF's IPO getting subscribed at the higher end of the price band.

"It will sail through easily," said Sujit Jain at Mumbai-based brokerage Pioneer Intermediaries. Jain said the pricing is actually lower than what the market had expected. Pioneer Intermediaries is not involved in the share sale.

A successful listing will make DLF a $23 billion company in terms of market capitalization, nearly twice that of its nearest rival Unitech Ltd., which is valued at about $12 billion.

With Singh and his family owning 87.4 percent of the company after the IPO, DLF's listing will add a new name to the Forbes' list of billionaires. Earlier this year, Forbes rated Mukesh Ambani, chairman of petroleum major Reliance Industries Ltd., as the richest resident Indian with a net worth of $20.1 billion. Ambani came 14 in Forbes' 2007 worldwide rankings.

DLF, the country's largest real estate firm in terms of the area it has developed, first tried to make a public offer last year, but scrapped the plans amid a stock market meltdown and disputes with minority shareholders.

The company plans to spend nearly 70 billion rupees ($1.7 billion) from the IPO proceeds on acquisition of more land and construction of ongoing projects, DLF said in a filing with stock market regulators. The rest would be used to pay up some loans before they mature, it said.

Singh's daughter, Pia Singh, who is a director on DLF's board, said the company is partnering with several international firms to scale up operations.

It has set up a joint venture with the U.S.-based Hilton Hotels Corp. to build a nationwide chain of budget hotels, she told reporters.
Under a similar partnership with Dubai-based real estate developer Nakheel, DLF plans to build two new towns in India, she said without elaborating.

Source://turkishdailynews.com.tr

Curb to slow inflows in real estate: FM

2007-05-21T00:24:00.000-07:00

The latest restriction on external commercial borrowings is aimed at slowing inflows of foreign debt into India's booming real estate sector, the finance minister said on Monday. "The idea is to slow down external debt in the real estate sector. I hope it will slow down foreign debt in the sector," Finance Minister Palaniappan Chidambaram told reporters.

On Friday, India tightened overseas borrowing rules, making it harder for less creditworthy and smaller local companies to raise funds.

Source://indiatimes.com

Indian Real Estate Slows

2007-05-18T00:04:00.000-07:00

The hike in home loans rates in India is having a slowing down effect on the property boom. In the last few years the interest rates on home loans has increased by about 3 percent.

Recently the premier ICICI bank hiked its interest rates for new customers by 50 basis points (0.5 percent). This meant that the current floating rate stands at 11 percent. One and half years back it was 7.5 percent.
For fixed rate loans currently it stands at 13 percent while it was almost 11.50 percent earlier.

Coupled with the huge increase in property prices the effect of this is a slowdown in the residential market. This is seriously affecting the middle class buyer and his dreams of owning a home.

Shivkumar Mani, Head Marketing, Dewan Housing Finance Limited which is a reputable home finance company expresses his opinion. “Higher interest rates in home loans have certainly impacted India’s property scene as it means higher EMI and therefore lower disposable incomes after servicing the loan. Currently the home loan buying process has slowed down as people are contemplating and some may even decide to wait before purchasing a new house.” He further states that those who had saved to buy their dream home would now be forced to purchase a smaller home in a cheaper locality.

Many people are considering prepaying their loans. This is after they do the math and realize that their funds parked in a bank account offer a higher rate of returns.

Moreover a buyer now has not only reduced buying capacity but also has a reduced eligibility to apply for home loans.

A number of bankers believe that thought the housing market in financial terms has gone up by over 30 percent; the actual physical expansion has only been 3 percent. The supply has just not kept up with the increasing demand which has been a result of the booming economy and the rising purchasing power of the consumer. This was of course until now. The hike in interest rates has already slowed down the market and time will reveal how far down it will go.

Source://homesgofast.com

London company in Bengal real estate

2007-05-08T02:53:00.000-07:00

A UK com- pany is taking the lead role in two housing projects near Calcutta, setting the stage for fresh foreign direct investment in Bengal real estate after the Salim Group’s initiative.

REIT Asset Management, a London-based company that manages real estate assets valued at over $6.8 billion globally, will partner a local developer to build nearly 5,000 flats on the northern and southern fringes of the city.

The project in Bonhooghly, opposite the Indian Statistical Institute (ISI), will involve redevelopment of a refugee colony. Around 800 families living there now will be given a flat each, free of cost.

The southern project at Maheshtala will be a fully commercial venture but the developers have promised to build a sports-cum-cultural centre for the municipality.

The cumulative project cost is an estimated Rs 465 crore. The two projects will be developed over two to four years.

David Cohen, the chairman of REIT Property Management India, told The Telegraph the projects are the beginning of what he believes will be “a long-standing relationship with the state and the city”.

“We are attracted by the opportunities in the state and look forward to be involved in more,” Cohen, who is now in France, said.

The company had set up office in India two years ago, but has invested only in one project in Pune so far.

“We are choosy. We looked at some 140 offers and selected three — two being in Calcutta,” Cohen said.

REIT will hold a majority stake in both projects with local partner Eden Realty Ventures, promoted by NRI businessman Indrajit De. “We are delighted to work with a global investor like REIT in Bengal,” De said from New York.

Both projects will have active participation from government departments. The Bonhooghly project will be a public-private partnership with the Refugee Relief and Rehabilitation Department of Bengal, while the Maheshtala Municipality will partner the other project.

In Bonhooghly, structures built in the ’50s to accommodate refugees will be pulled down. The displaced families will be given the flats in two years. Till then, each family will be given Rs 1,000 a month for temporary accommodation.

Of the 18 acres in Bonhooghly, 6 acres are earmarked for rehabilitation. The rest of the land will have 25 buildings, including 16 G+15 towers. Prices are expected to be in the range of Rs 10-22 lakh.

The Maheshtala project will have 44 buildings, including 30 G+15 towers, mostly for the middle-income group.

Source://telegraphindia.com

Foreign funds bet on real estate

2007-05-06T23:06:00.000-07:00

With more than 35 big-ticket foreign funds having already checked into the real estate sector India, global realtors, banks and bond houses from New York to Jerusalem are suddenly finding the opportunity to invest in India irresistible.

If the year 2006 marked some of the country’s biggest land deals, the future bets on India realty are set to usher in a gold rush. A study by the India Brand Equity Foundation (IBEF) suggests that the first half of 2007 will see at least 20 more funds making an entry into India. This translates into $10 billion of foreign direct investment in realty. In fact, the study indicates that India would be merely scratching the surface of the potential infrastructure opportunity with $191.51 billion of investments committed over the next five years. The sector is estimated to grow at a CAGR of 15% over the next few years . Merrill Lynch forecasts that the Indian realty sector will grow from $12 billion in 2005 to $90 billion by 2015. Prominent global funds including Carlyle, Blackstone, Morgan Stanley, Trikona and Warbus Pincus are sitting on a total corpus of $12-15 billion, say experts.

Eminent global real estate business houses like the Philippines-based Ayala, and Signature group, Och-Ziff Capital, EurIndia and Old Lane from Dubai are keen on sizeable investments into India . While FDI from the UK is also likely to pick up in the next few months, investors in the US, Israel, Malaysia and Singapore want to be a part of the India story.

Australian real estate consultancy major LJ Hooker, with 700 odd franchises in South East Asia, has opened its India account with a franchisee in Bangalore. US-based global investment bank Goldman Sachs and Unitech, the largest listed real estate company in India, will set up a special purpose vehicle (SPV) with a corpus of $208.7 million for investments in the real estate sector. DLF Ltd has forged a 50:50 joint venture with Nakheel, the largest property developer of the UAE, for two integrated townships in India at a whopping investment of $10 billion.

Source://financialexpress.com

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2007-05-06T22:50:00.000-07:00

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