Noida Real Estate Property

"We have applied to Sebi for approval. We hope to launch our IPO of Rs 1,500 crore early next-fiscal," BPTP's Managing Director, Kabul Chawla, said here today.

The company, which presently has a networth of Rs 1,600 crore, is hoping to clock a topline of Rs 1,000 crore and PAT of Rs 200 crore in FY10.

From the issue proceeds, the company plans to pre-pay Rs 325 crore of its debt while Rs 500 crore has been earmarked for government use, he said.

The realty major, presently, has a consolidated debt of Rs 900 crore.

In 2011, Rs 150 crore will come up for repayment and in 2012, Rs 600 crore, Chawla said, adding that "though we are not stressed in terms of debt, we plan to pre-pay Rs 325 crore out of the issue proceeds."

JP Morgan and SSKI are the Book-Running Lead Managers (BRLMs) to the issue.

Source: Business-standardRealty major BPTP plans Rs 1,500 cr IPO in early FY11

The developer was looking to sell 16 million square feet of residential properties in the fiscal 2010, and by December it was able to sell just 8.5 million sq ft of properties.

Now, with just a month left for the fiscal, analysts believe DLF would not be able to meet its target.

When contacted, Rajiv Talwar, executive director at DLF, refused to comment.

About 65% of the 8.5 million sq ft launches were city-centric, and 70% of the sold volume came from the National Capital Region. About 47 % of NCR volumes came from a single city-centric project, Capital Greens.

DLF’s property sales picked up recently across projects in Gurgaon, Kochi, Bangalore and Hyderabad.

It sold 3.1 million sq ft of residential properties in the third quarter and about 1.8 million sq ft of that came from luxury projects.
However, analysts believe the pace of sales has not met with their expectations. “While the recovery has occurred, it is slower than we anticipated, with DLF likely to miss our prior volume estimates,” Aatash Shah, an analyst with Nomura, said.

Source: dnaindia.com By Vivek Seal DLF may miss residential sales goal

"A National Rural Housing and Habitat Policy has been drafted by the ministry after wide consultation with the stakeholders including state governments, bankers etc... The draft policy is at consultation stage with the Planning Commission," minister of state for rural development Pradeep Jain Aditya said in written reply to a question in the Lower House.

"The goal of the proposed policy is to ensure adequate and affordable housing for all in the rural areas," said Aditya.

The draft policy also aims to facilitate development of sustainable and inclusive habitats in rural areas by expanding government support, Aditya added.

It seeks to promote community participation, self help and public private partnership within the framework of Panchayati Raj, he said.

The minister, however, replied in negative to a question whether the government has formulated or proposes to formulate a national rural housing policy and housing guarantee scheme on the lines of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

"If the signal from the bank and government is to raise the price, then why prices will not go up? That means the economy is ready to take a price hike. It will be wrong to assume that developers should not raise prices. How can you have two contradictory signals?" DLF group executive director Rajeev Talwar said on the sidelines of a CII seminar.

While a few private sector lenders, including ICICI Bank and HDFC Bank, recently increased home loan rates by up to 100 basis points, the Budget proposed to impose service tax on the realty sector both on commercial rentals as well as on sale of under-construction housing units.

The service tax would come to be about 3.5 per cent of the cost of the apartment that includes the value of the land and also the cost of construction, realty body Credai said.

"Which tax has been absorbed in our country? It has only been passed through. Somewhere the new levy must be adjusted, how can you hope that the new levy will be adjusted and yet there will be no increase?" Talwar asked.

However, Talwar did not quantify the likely jump in the prices, saying, "It will vary from location to location, project to project."

"Gulshan Homz plans to invest Rs 250 crore initially to launch few projects in residential and commercial segments in 2010-11 fiscal. The company intends to raise fund in the form of term loan from Foreign Institutional Investors (FIIs) by pledging our projects with them. At present, the company would concentrate on Delhi-NCR region but would definitely look forward to good opportunities in tier II and III cities across north India," Deepak Kapur, director of Gulshan Homz, said in an interview.

When asked about the details of new projects, Kapur added, "In the current scenario, Gulshan Homz would like to lay more emphasis on developing affordable homes. As a step in this direction, the company is presently working on two projects -- Homes121 and Vivante -- in Noida. Vivante would be launched in a week's time. Further, we are planning to launch a retail-cum-commercial project in Kota shortly."

Gulshan Homz had recently handed over two projects in Indirapuram named GC Centrum and GC Grand, and one in Vaishali dubbed as GC Emerald Heights. According to Kapur, these units were also in the affordable housing category and were a big hit amongst buyers. "The current real estate scenario is favourable for affordable housing. The demand has risen considerably in the last six months because of which many projects are coming up. It is likely to increase further in the coming days. This will also generate the demand for commercial as well as office spaces."

Source: Realty Plus By Vishnu Rageev R Gulshan Homz betting strategically on affordable homes

When contacted, he said, "We are presently planning to open an IPO in the first quarter of financial year 2010. The market sentiment has improved so far this year due to higher government budget spending and global recovery. The IPO climate also has improved a lot since the first quarter of 2008. Of course, we will make it this time." In February 2008, Emaar MGF's attempt to raise Rs 6,400 crore through an IPO notably failed after the issue got only 39 per cent subscription.

Emaar MGF filed draft red herring prospectus (DRHP) with the market regulator on September 29, 2009. "We have received the final observations to our DRHP from the regulator. As per the new SEBI regulations we have a one year window to complete the IPO. The board of directors of the company are considering an opportune time to open our IPO," according to the official spokesperson of the company.

Of the total proceeds from the issue, Emaar MGF will utilise over half of the fund to repay its debt. The company has a debt of Rs 5,807.79 crore as on August 31, 2009 and plans to utilise Rs 1,972.1 crore raised from IPO in part repayments.

Source: Realty Plus By Vishnu Rageev R Will Emaar MGF make it?

Though the finance minister announced the continuation of sops to the downturn-hit realty sector in Budget 2010-11, stakeholders feel that more could have been done to speed up its revival India

The realty sector was expecting that Union Budget 2010-11 would contain provisions that would accelerate its revival. In the event, the Budget has proved to be a disappointment. On the positive side, the government announced an increase in expenditure on rural housing and housing for the poor, offered sops to the salaried class in the form of tax savings, and extended the interest-rate subvention scheme on low-cost housing. On the negative side, however, it did not offer direct benefits to home buyers or real estate developers, and worse, it quietly brought back the service tax on lease rentals.

THE POSITIVES

Extension of deadline for availing tax concessions. In his Budget speech, finance minister Pranab Mukherjee announced the continuation of concessions offered to the sector earlier. He said that he was providing this one-time interim relief to the housing and real estate sector that is reeling under the impact of the global recession. “I propose to allow pending projects to be completed within a period of five years instead of four years for claiming a deduction on their profits,” he said in his speech. Projects that received approval between April 1, 2007 and March 31, 2008 have been exempted from paying any tax on their profits. However, the caveat earlier was that these projects had to be completed by March 2012 to avail of this tax holiday. This deadline has now been extended to March 2013.  

Extension of interest subvention. The government’s decision to extend the provision of 1 per cent interest subsidy on home loans up to Rs 10 lakh for buying houses costing up to Rs 20 lakh is expected to help middle- and lower-middle class buyers. The subsidy will translate into a saving of Rs 28,920 on interest payment in case of a five-year loan and up to Rs 1.51 lakh in case of a 20-year loan. The interest rate subvention will be delivered through scheduled commercial banks and housing finance companies registered with National Housing Bank.

According to Prof PSN Rao, head of housing at New Delhi-based School of Planning and Architecture, the government’s measures will help minimise the growing gap between demand and supply. “In India, demand far outstrips supply. In order that the wheel of real estate moves and carries the economy forward, demand and supply both have to be fuelled. The government has attempted exactly that. By continuing with the 1 per cent interest subsidy for sub-Rs 20 lakh housing units, it has fuelled demand,” he says.

This measure is especially expected to boost demand in smaller cities where housing costing less than Rs 20 lakh is mostly available. “There will be a significant perk-up in transaction volumes in tier II and tier III markets. These markets were perceived to be losing steam of late,” says Anuj Puri, country head, Jones Lang LaSalle Meghraj.

praveen.singh @expressindia.com

• INDIRECT BENEFITS
• THE NEGATIVES
• DEVELOPERS’ ANGST
• GLASS HALF FULL
• BOTTOMLINE

Source: The Indian Express By Praveen K Singh Too feeble a boost

Bangalore-based developers, such as Nitesh Estates, Prestige, Puravankara, Brigade and Mumbai-based Godrej Properties are adopting this route to develop properties, aware of the keen need to save cash in a market that is becoming increasingly tight-fisted for real estate firms.

"Developers no longer want put cash upfront and invest inland. The JV works both for developers as well as landlords," said Amit Mookim, director, transaction advisory service (real estate), KPMG.

Under the arrangement being discussed by some firms, landowners team up with developers through a special purpose vehicle (SPV). The owner comes on board as an equity partner in lieu of the land he puts on the table. When the project gives returns, the landowner gets a fixed percentage of the revenue in proportion to his equity holding.

The developer invests in the construction and marketing costs, but avoids tying up his funds in land. Bangalore-based Nitesh Estates will use this model to undertake new projects. "This is expected to allow us to deploy our capital towards development expenses and the expansion of our operations," a company official said.

Source: Economic Times By Sobia Khan Realty companies opt for joint play to save on costs

"At present, there is no house left in Vijay Nagar's Babu Colony. You have to wait till May to see whether there's any cancellation, but chances are less because who's going to get rid of this mega offer. Give us your contact details, there are similar new schemes coming up and we will be in touch with you," a local property broker said when Property Pulse visited his office to learn more about the developments.

When asked about the details of location and project, he added, "Earlier, this 6-7 acre land was being occupied by poor slum-dwellers. Mayawati government freed this area by pulling them out. Since her government is sloganeering for poor, they had later come up with this scheme to re-settle those who lost their land and house here. However, nobody knows who has left and who's going to buy, so we are in the business."

When contacted by Property Pulse, Narendra Kumar Chaudhary, vice chairman, GDA said he is unaware of any such illegal activity happening there. "If we receive any complaints, we will take stringent action against the culprits." Chaudhary declined to comment, when asked about their criterion for allotting flats to EWS. Also, an e-mail sent to GDA elicited no response at the time of filing this report.

Source: Realty Plus By Vishnu Rageev R GDA illegally selling homes made for EWS

गुरुवार को अथॉरिटी ने 6 प्लॉटों की स्कीम जारी की थी। इसमें 4 प्लॉट मेट्रो स्टेशनों के पास थे। शुक्रवार से बैंकों के माध्यम से टेंडर मिलने वाले थे लेकिन तब तक पता चला कि स्कीम वापस ली जा रही है। अब सवाल उठने लगे हैं कि जब स्कीम वापस ही लेनी थी तो इसे लाने की घोषणा क्यों की गई। स्कीम वापस लेने की सूचना समाचारपत्रों में अथॉरिटी के एसीईओ पी. एन. बाथम के हवाले दी गई है। जब उनसे इसका कारण जानने के बारे में पूछा गया तो उन्होंने कहा कि उनको न तो स्कीम लॉन्च करने की जानकारी है और न ही वापस लेने की।

उन्होंने फोन पर यह भी बताया कि मैं इस समय लखनऊ में हूं। अथॉरिटी के सूत्रों के मुताबिक अथॉरिटी के कमर्शल सेक्सन देख रहे अफसरों को भी योजना लाने की जानकारी नहीं थी। इसलिए उन्होंने कोई तैयारी भी नहीं की थी। बिना संबंधित विभाग से जानकारी के यह स्कीम कैसे लॉन्च की गई। इस पर बहुत से सवाल उठ रहे हैं।

All the top retailers such as Future Group's Pantaloon, Shopper's Stop, Aditya Birla Group's More Retail and Reliance Industries' Reliance Retail are expanding their operations, according to real estate consultancy firm Knight Frank India. It is estimated that by December 2010, approximately 2.5 crore sqft new retail space will be developed countrywide, mainly in big cities and lucrative tier II cities, which is 50% more than what was developed last year.

The last couple of quarters have seen some increase in rentals, but they are still 25-30% lower than the peak rates during the boom period of 2007-08. Also, companies are bullish with improved salaries and job opportunities in sectors such as IT, pharmaceutical, finance and manufacturing in big cities fuelling fresh demand in retail space in metros, say industry veterans and analysts.

"We have revived plans but we are not very aggressive," says Rajeev Talwar, group executive director at DLF, the country's largest real estate developer. "Places like Jalandhar and Ludhiana, which have a propensity to spend, will be on radar rather than other tier II and III cities."

He, however, said it will take another 12-18 months for the retail sector to regain its old glory. No wonder, this time retailers are more cautious in their scaling up exercise.

According to Knight Frank India, K Raheja Group, Oberoi and Runwal Group in Mumbai, Prestige and Sobha Developers in Bangalore and DLF, Ansal and Emaar MGF in the National Capital Region (NCR) in Delhi are some of the companies involved in developing retail space. "The fact is that retail is all about location which makes it necessary to find the best location. Hence metros continue to provide an edge over Tier II and Tier III locations," says Vikas Oberoi, MD of Oberoi Constructions.

Source: Economic Times By Maulik Vyas & Supriya Verma Mishra Retailers scale up ops in metros

Dilip Kawathkar, joint project director and spokesman for the Mumbai Metropolitan Region Development Authority, said a continued "recession in the real estate market" may have led to the absence of bidders today. The reclaimed marshland was valued at a minimum of 4.35 billion rupees ($95 million) after being offered for a reserve price of 300,000 rupees a square meter, unchanged from similar sales two years ago.

The failed sale in the city's Bandra-Kurla Complex area may force the government to revise rates or defer sales of land in the area, which it wants to develop into an alternative to the congested Nariman Point business district in India's financial hub. Rents in Bandra-Kurla had dropped 36 percent by December from a June 2008 high, according to data from CB Richard Ellis.

"The land price seemed to be on the higher side," Pujit Aggarwal, chief executive officer and managing director of developer Orbit Corp., said by telephone today. Orbit was one of the companies that had attended the preliminary bidding meeting last month. "It would have been tough to make money."

Source: www.businessweek.com By Sumit Sharma Mumbai's First Land Sale in 18 Months Gets No Bids

Under this scheme, Haryana Housing Board has come up with low-cost housing options in the industrial belts of Bawal on NH8 and Barhi on NH 1. Sources in the Haryana Housing Board told Property Pulse that in all 882 apartments are available on hire purchase basis. Out of these, 602 apartments are in Barhi Industrial Area, just 20 km from the Delhi border. The tentative sale price is Rs 7.20 lakh.

Giving project details, a Haryana Housing Board Official said that these freehold low-cost flats with innovative and earth quake resistant design are located in posh and fully developed neighborhood and have all basic amenities amidst lush green area with wide roads.

Haryana Housing Board which has reserved 33 per cent flats for the women has opened the registration for the allotment of these apartments. The 40 per cent of the apartment cost has to be paid at the time of possession and balance 60 per cent through EMIs spread over 10 years.

Fund houses, private equity firms, venture capitalists, bankers, institutional investors, companies, high networth individuals, nonresident Indians, indeed just about every potential property buyer, are dialing local real estate experts in order to get a feel of the local market.

The best part is, to just share one's knowledge of the real estate scenario in a city like Bangalore, the consultants/experts get paid anywhere between $300 and $500 an hour. Over and above that, if they are required to fill in a market survey, he gets paid around $200 per survey form.

Farook Mahmood, CMD of Silverline Group and the president of the Bangalore Realtors' Association, has been flooded with calls from overseas buyers, who pay $500 an hour for an update on what's happening in the city.

Mahmood, who has been dealing in Bangalore's real estate market for the past 30 years, says that "this trend of overseas clients paying per hour or for a service is a recent phenomenon." According to investment bankers, this demand for knowledge from local real estate consultants is also happening in other markets such as Mumbai, Delhi and Chennai.

Real estate consultants say they receive around two/ three calls a month, with some consultants doing more. "I get calls one month in advance, where a date and time is fixed for telephonic interview to happen," says Mahmood.

Questions frequently asked are about the real estate climate whether or not it's a suitable time to invest; about specific micro markets within the city; about developers and their standing in the market; and the trends in the commercial and residential space.

One such global firm actively calling real estate consultants is Gerson Lehrman Group. The company is a network of consultants, physicians, scientists, engineers, attorneys, market researchers, and other professionals from around the world.

"Most of the local property consultants and experts have a very sound knowledge of the local market, they have great access to developers and know what's going on," says an investment banker.

The credit-squeezed real estate sector gradually recovering from the onslaught of the economic downturn, today saw mixed fortunes in the Budget 2010-11. While extending measured benefits to the realtors, the UPA II re-affirmed its commitment to promote aam aadmi housing by proposing major allocations for it. Developers and real estate companies, however, were looking for much more than what the finance minister had to offer.

Unveiling the Budget, finance minister Pranab Mukherjee steered clear of extending any direct benefits to the real estate developers and instead announced extension of the deadline for profit-based tax deduction for ongoing housing projects from four to five years. The move, realtors believe would help them to offset the effects of the recent downturn to a certain extent, but clearly they expected more.

Mukherjee announced continuation of the concessions offered earlier to the sector. He said that in order to provide one-time interim relief to the housing and real estate sector impacted by the recession, “I propose to allow pending projects to be completed within a period of five years instead of four years for claiming a deduction on their profits.” Projects approved between April 1, 2007 and March 31, 2008 have been exempted from paying any tax on their profits. Removing the caveat that these projects had to be completed by March 2012 to avail of this tax holiday, Mukherjee extended the deadline to March 2013.

Source: The Indian Express Low-income housing gets major benefits, but not much for sector

• Service-tax could significantly increase the transaction cost for specified asset classes. Service-tax @ 10.3% is now proposed to be levied on value of (i) additional services provided by the builder such as offering preferential location, etc (ii) lease of vacant land, if construction is undertaken thereon. For developers, there may also be a trade-off between the realizing pre-sales, and reducing transaction costs, as service-tax would now be levied on sale of property, unless the entire consideration is paid after completion of construction.

• On the other hand, extension of the interest subvention of 1% for low cost housing to March 31, 2011, along with increase in the slab rates for individuals should provide the necessary demand boost for low-cost housing.

• In what should provide much-needed succor to residential developments staring at project delays, the time-limit for completion of projects eligible for deduction under section 80-IB has been extended to 5 years. Liberalizing the limit of commercial space that could be created in such projects will also help. On the flip side, however, companies executing such projects would now need to pay a higher minimum alternate tax of 19.93%.

• Hospitality would receive a much-needed boost by the investment-linked tax holiday being made applicable for all new hotels in the 2-star plus categories.

On the positive side, however, the Finance Minister did acknowledge the contribution of SEZs to India's export-growth, and expressed the government's commitment to the continued growth of SEZs. One could, therefore, expect that the revised Direct Tax Code, which the government intends introducing by April 1, 2011, may not hopefully tamper with the fiscal incentives being offered under the SEZ regime.

By Avinash Narvekar
Tax partner-real estate, Ernst & Young

Real Estate got a mention in this year's budget unlike last year where it was largely ignored. The finance minister provided one time interim relief by allowing a one year extension to housing development projects to claim deduction on profits.

The scheme of 1 per cent interest subvention on housing loans up to Rs 10 lakh for a house costing not more than Rs 20 lakh has been extended by one more year and an additional Rs 700 crore have been allocated to the scheme. The allocation to Housing & Poverty Alleviation has been raised to Rs 1,000 crore. The significant increase in allocation of funds by 75 per cent to Rs 5,400 crore for urban development is a welcome move. The finance minister also announced increased allocation of Rs 10,000 crore for Indira Awas Yojana -- a popular rural housing scheme. These positive measures will encourage demand, especially in the tier II & tier III cities and towns.

The Rajiv Awas Yojana scheme for extending support to states that are willing to provide property rights to slum developers got a substantial incremental allocation of Rs 1270 crore. This is in line with the government's announcement of making India slum free and is certainly a step in the right direction.

I am pleased that infrastructure got its due attention especially getting 46 per cent of the total planned allocation of the budget. Schemes such as Bharat Nirman, The Backward Region Grant Fund, increased allocation by 13 per cent on road transport, railways, the Delhi Mumbai Industrial Corridor project, etc., will give an impetus to infrastructure development in the country.

Source: Realty Plus Tier II, III towns to benefit more from Budget: CBRE

If your property has housed tenants for a long time and commanded fairly competitive rates, you can expect a better valuation.

The case would be vastly dif- ferent for a property that sees short-term tenants and rates that spike periodically .

Always remember to factor in transaction costs such as stamp duty and brokerage.

This counts as good advice because these costs can be quite high. Apart from specu- lation, demand and supply determine the price of your property most significantly.

Selecting your tenants While selecting a tenant, you must consider certain attrib- utes. Primarily, you must ascertain that you have the right mix of positive cash flow and security for your property. The badly chosen tenant can steadily become a nightmare ­ which might never end!

It is the class of your prop- erty that eventually attracts the type of tenant. And that's a fact. You may find some aspirants who offer you a higher rent for your property and some that don't quite make it to your expectations in the department.

However, don't blindly go in for the largest bundle of cash offered. Keep in mind the painful fact that the tenant eviction process in India can be excruciatingly long.

Source: Hindustan Times By Jai Mavani Your Guide - Delhi Rentals: Playing Landlord