At a time when the real estate players in the country are highly bullish on the sector, here in one developer who has dared to foray into the US where the housing sector woes are continuing.

It is the Pune-based D S Kulkarni Developers which is smelling a business potential in the US and has become the first organised sector real estate player from India to make a foray in the US market.

The company one had popular actress Madhuri Dixit on its board.

Kulkarni Developers has floated a fully-owned subsidiary in Delaware, USA, to develop residential and commercial projects.

Company chairman D S Kulkarni told PTI the idea was to cater to the demands of the Indians settled there. However, a large number of non-Indians have also queued up to buy the houses being constructed by the company.

He said DSK has acquired about 18 acres of land in New Jersey and construction of over one lakh sq ft is on. The company has already invested Rs 80 crore on the US foray and plans to invest another Rs 100 crore over the next one year. Incidentally, the company had posted turnover of over Rs 300 crore last fiscal and about Rs 80 crore in the first quarter this year.

Kulkarni conceded the profit margin in the US market is much less compared to what it is in India. But felt it is steady and reasonable. The cost of land there worked out to about USD 70\80 per sq ft while the cost of construction is about USD 80\90 per sq ft.


Source:->http://economictimes.indiatimes.com/

The Malaysian government and its tourism authorities are trying to attract Indian corporate houses and super rich tourists to invest in its residential properties.

Indian IT companies are showing a great interest in investing in these residential properties and over 700 Indians have acquired residential properties in Malaysia over the last three years.

P Manoharan, director, Malaysia Tourism India, told Business Standard: “Indian IT companies having their operations in Malaysia are showing great amount of interest in investing in residential properties in Malaysia.

Malaysian government launched “Malaysia my second home” programme around three years back. Under this programme we are trying to attract Indians to invest in Malaysian real estate. Our target is the super-rich tourists who would like to have their own property in Malaysia.”

“However, Indian corporate houses, especially some big IT companies have shown great interest in investing in Malaysia’s residential properties. After the programme was launched over 700 Indians, including some corporate houses, have acquired properties, mainly in Kuala Lumpur,” Manoharan said.

Explaining the programme, he added that at present the Malaysia is allowing Indian tourists and corporate houses to invest in the residential properties. “However, the government is considering allowing Indian investors to buy commercial properties also. At present Malaysia is allowing Indians to buy only residential properties. The lower limit of investment is Rs 15 lakh and there is no upper limit.”

On the differences between the real estate prices in India and Malaysia, he said, “Our real estate prices are very low when compared to India. If a property is worth Rs 300 to Rs 400 per square foot in India, then the same property is Rs 50 to Rs 60 per sq ft in Malaysia. So the difference is quite wide. Your budget for an apartment in India will get you a prime property located on a beach in Malaysia,” Manoharan said.

Manoharan added that the Malaysian government is witnessing around 20-25 per cent increase in Indians buying properties there. “As an incentive for the Indian investors we also allow these buyers 10 years’ multiple entry visa,” he said.

Malaysia is celebrating 50 years of its independence this year. “Visit Malaysia Year 2007” campaign was launched to mark the golden jubilee year celebrations. Malaysia has charted out 240 events in Malaysia with 50 key events.

On the increasing number of Indian tourists, he said, “Malaysia has always been a favourite tourism destination for Indians. Last year (2006) we registered 280,000 Indian tourists in Malaysia. This year, till July, this number has already touched 270,000. So one can imagine the increase in the Indian tourist inflows to Malaysia.”

Malaysia is also introducing a lot of unexposed destinations like Sabah and Sarawak, Kotakina Balu within Malaysia.

main source:-http://www.business-standard.com/

After staying in a rented flat for the last two years, Tejas Warudkar, a software professional recently purchased a new flat in Kothrud area of Pune. Though his plans realised now, after waiting for more than four months, he got an affordable deal.

Despite the wait, Tejas was in a win-win situation when he purchased the two-bedroom flat for Rs 20 lakh. On the one hand he received the "long awaited" increment in March/April, on the other the price of his newly bought flat remained stable during the period thereby helping him to manage the monthly budget.

Tejas' example shows that the real estate market in Pune has shifted its northward rise track and instead shown a stabilisation in prices.

"There is certainly a correction in the property prices in Pune. After the city started witnessing sharp rise in real estate prices during the past one-and-half year, the builders were inclined to build ultra modern flats for the upper middle class to make extra money which resulted in a shortage in properties for the middle class. But recently it was again observed that some upcoming and already existing developers have again began exploring the once ignored middle or lower middle class," said Sujay Kalele, Manager, Capital Markets, Jones Lang LaSalle Meghraj, the world's leading integrated global real estate services and money management firm.

"Although the equilibrium between the demand and supply equation has not yet been reached, the gap has narrowed," he added.

AA Swamy, project advisor, High Street Residential Consultants Private Ltd said, "After a sharp rise in the prices in the past two years, buyers had adopted a wait-and-watch option hoping that the property rates going up will stop. The already excessively high prices, in addition to the increased bank interest rates, brought a sense of stagnation in the industry and thereby forcing the builders to stabilise the rates."

As the city's mid-segment real estate market is mostly driven by the information technology (IT) clients, there are new avenues coming up as favoured destinations close to IT companies. The city, which earlier was spread within a radius of 15 to 20 kilometers, has extended to 30 kilometers.

"Declining property rates in other big cities forced the buyers of Pune to wait in anticipation of a similar trend. This brought a stagnation in the market, halting the continuously growing prices," said the President, Promoters and Builders Association of Pune (PBAP). He added that the trend is being witnessed from March-April and will continue for some more time.

Citibank’s real estate arm is investing close to $80 million (Rs 325 crore) in Delhi-based realty firm BPTP to acquire an unspecified equity stake in the firm. While equity size could not be ascertained, company sources claim it would be around 10%, which puts an enterprise value of Rs 3,250 crore to the four-year-old firm. An e-mail query to BPTP did not elicit a response. However, company sources confirmed the development.

This is the second big funding that has come BPTP’s way in the last three months. In May this year, Merrill Lynch’s real estate arm pumped in Rs 218 crore in the company in a deal marketed by Jones Lang La Salle.

Then, it was a mix of plain and preference equity and the amount was raised to fund the development of IT Park which is scheduled to come up on the Gurgaon Expressway on five acres of land. BPTP has developed close to four million sq. ft of real estate in Delhi and NCR.

According to company sources, the fresh tranche of investment would be used for the development of BPTP IT park that is coming up in Greater Noida and future projects.

Citibank’s investment marks the continuation of private equity players’ bullishness on the real estate sector. Industry analysts believe PE firms may be willing to loosen their purse strings since property prices are cooling off and bank funding drying up.

Some of the leading global real estate funds are reported to be lining up to enter the Indian realty market. According to market estimates, close to $1.5 billion has already been committed and by the end of the current fiscal PE investments in the sector could hit $3 billion mark.

Most developers have tied up their capital in building land banks, and are short of funds to execute projects. With bank debt no longer an option, developers face a huge liquidity crunch. So the deals, which looked exorbitant earlier are now much more reasonable as the developers are willing to wait to take their profits at a later stage.

From PE players viewpoint, many are under pressure to deploy funds raised from investors. Little wonder then, contruction majors such as Shapoorji Pallonji & Co have generated tremendous attention from PE funds, of late. Experts feel this is just the beginning. An even bigger wave of organised funding is expected when real estate mutual funds become a reality, and exit routes for these funds look a lot clearer.



Surce//http://economictimes.indiatimes.com

Home-grown residents, migrants cashing in on the real estate boom, Ganpati bappa’s blessings and an effervescent cultural scene, Pune has retained its local charm with hints of cosmopolitanism. Continuing our series on 60 things that make us Puneites....
Laxmi Birajdar

21. Migrants galore
Earlier known as a pensioner’s paradise, Pune is now a cosmopolitan city, thanks to a large number of migrants from all over the country who prefer settling down here. Suburban Pune, especially, is home to out-of-towners-turned-localites who usually house themselves in plush confines of the booming real estate scenario.

22. Lezhim special
The performnce sees a massive participation from the youth during festivals, more importantly during the Ganpati festival.

23. Puneri phetas
They are not just an important part of weddings and festivals, but have also been making waves abroad. Due credit to Murudkar Jhendewale, who have been an important part of this unique export business.

24. Evasive helmets
In spite of being the city with the highest number of two-wheelers in the country, no number of rules has succeeded in compelling Puneites to take to the helmet.

25. Name calling
Bestowing the title of Kaka and Kaku to almost anyone…be it the man behind the counter at the movie theatre or your neighbour.

26. Hong Kong Lane
Without which any collegian’s shopping trip remains incomplete. To keep up with the changing trends, the shops always manage to stock the latest in accessories and knick-knacks at dirt-cheap prices. Another highlight of this narrow lane, between JM Road and Goodluck Chowk, are the many book-shop-cum-libraries that are a storehouse of literary treasures.

27. The Kirtankaars
A small but fascinating community that finds a place of importance at most pravachans, Kirtans and powada programmes. Pune is probably the only place where female Kirtankars also actively participate. Incidentally this is also the city that pioneered the concept of women preists.

28. Shivaji Market
It is always buzzing with activity and stocks everything to satisfy the culinary needs of our very own Puneites and also the hordes of foreigners that troop to the city for various reasons.

29: Games people play
Late afternoon card games among senior citizens at Maharashtrian households is a daily ritual. Visit these families on any given day, and the latter part of the day, has enthusiastic silver citizens, especially, women, enganging in a riveting game of bridge.

30. Haldi kunku
Come January and the Haldi Kunku during Makar Sankranti is one of the major and much sought-after festival for ladies. Dressed in their auspicious best, the women are treated to delicious saffron-laced milk and gifted home utility items.

31. Dagdusheth Ganpati
How can one overlook Ganpati bappa’s darshan at the famed Dagdusheth Halwai Temple in Budhwar Peth? The highly worshipped elephant God receives hordes of devotees daily. But the homage is every bit worth it, even if it means scrambling for the diety’s glimpse while being stuck in an over-ecstatic crowd.

32. Paithani
The whole six yards of luxurious silk and brocade are any Puneri woman’s sartorial pride. Right from being an integral part of a Maharashtrian bride’s trousseau to flaunting it important social functions, the Paithani is an eternal feminine favourite.

33. Kelkar Museum
Founded by Dr D G Kellar, the Raja Dinkar Kelkar Museum in Shukrawar Peth pays homage the everyday life in India in the 17th, 18th and 19th centuries. Be it showcasing exotic artefacts, unique earthenware or glimpses of the majestic Peshwa era, the museum is a storehouse of a bygone era.

34. UoP and Symbi
Be it various institutes under the Symbiosis umbrella or the University of Pune, for students outside the city getting a seat in one of these halowed places is almost a dream come true. Not to forget, it’s a status symbol to have one of these names flashing on your cirriculum vitae.

35. News you can use
Local community kattas, stocked with newsapaper booths make for a typical Puneir picture. Citizens, old and young, flock to these mofat vachanalayas that store mostly Marathi, Hindi and sometimes English dailies to catch up on current affairs.

36. High spirits
Puneites are making headlines for having increased their alcohol consumption. the usually conservative localite, doesn’t mind spending big bucks on letting the cocktails work you their magic.

37. Straight talk
Being politically correct or exchanging sweet pleasantries is beyond an average Puneite’s comprehension. Even if driving the point home with in-your-face, straight talk usually makes the other person respond with complete shock.

38. NDA cadets
They are seen strolling around Camp on weekends. Not only do they stand out for their unique haircut and uniforms, but they also remind us that our city houses one of the most prestigious defence establishments in the country, like NDA and AFMC.

39. Trekking community
Who devote their weekends to exploring the many hills and forests around the city. The adventurous spirit of the city is also reflected in the many Leh-Ladakh expeditions that city bikers undertake.

40. Hospitality redefined
Housing societies invariably sport boards on their gates with at least half a dozen pointers elaborating on the parking rules and regulations, code of conduct and instructions for salesmen and hawkers. A typical one would go: No parking, No salesman, No spitting, No thoroughfare. Sigh! Once upon a time boards outside homes used to say ‘Welcome’.

 

Source://expressindia.com

Owning a second home in places away from the hustle and bustle of hectic city life may have earlier been restricted only to affluent individuals but now the trend is changing. It’s no more just the top entrepreneurs who are investing in the second home market, even middle and upper middle level management now see such homes as feasible getaway investments.

Property consultant firm Jones Lang LaSalle (JLL) Meghraj finds that the primary second-home buyer segment is now the middle-to-top management and entrepreneurial class, usually in the age bracket of 35-45. They attribute this shift to a change in mindset. “There has been a fundamental shift in the overall mentality. Second homes have emerged as an acceptable investment route for a lot of people now and owning a farmhouse, home in the hills or a beach cottage is certainly a matter of personal pride and prestige,” reveals Anuj Puri, chairman and country head, JLL Meghraj.

Destinations such as Goa, Pune, Alibagh, Khandala, Lonavla and hill stations like Dehradun, Mussoorie, Ooty and Simla are in high demand among the new second home buyers. The price range for second homes can cost anything between Rs 15 lakh to even Rs 2 crore! Yet, their demand continues to soar.

Developers on their part are understanding this inherent need in people to own holiday homes that are away from the city. Hence they are coming up with a number of projects to cater to this increasing demand. OSB Group, for instance, has Kot Farms located near Kotputli which offers the chance to experience modern luxurious living in comfort. Their Sea Shells project in Goa boasts of being an integrated luxury housing complex. Says P K Sanyal, president, OSB Group, “The demand for second homes is expected to grow fast in the coming years. We are also out with special offers to further attract our buyers in which they can go for this option on a time sharing basis. They can thus use their property to rent out like a resort and fetch good return for their investment. They may retain their property till such time they get expected resale value.”

Real estate majors such as Ansal API also have golf villas in Lucknow, apartments in Kundli, Sonepat, Jodhpur and Karnal that address the need for a second home. “There has been atleast a 15-20% increase in the second home market. People see this as a good investment option and it is a growing market,” says Kunal Bannerji, president - marketing, Ansal API.

Places such as Real Estate Pune , Talegaon, Lonavla or Jodhpur are also seeing a lot of buyer interest. Disha Direct, a real estate marketing company and a leading player in the second home market, has a number of options in store.

Their villas in Thane, ‘Sylvan Springs,’ spread across 82 acres and 134 plots offer a mix of recreation and scenic beauty. Says Santosh Naik, CEO, Disha Direct, “Every individual has the desire to own a bungalow, want to spend quality time with their families and also want the best investment options. That’s why their market is catching up so fast in India as well,” reveals Naik.

So now you now where to head when you plan your next holiday destination - Home, sweet second home!
Resource://indiatimes.com

RSB Group, a leading engineering and component manufacturing house, on Monday announced that it has concluded a private equity placement of Rs 154.35 crore with the IL&FS Investment Managers (IIML) as lead investor along with a co-investment by Evolvence.

RSB Group, one of the largest engineering and automotive components manufacturing entities in the country that had a turnover of Rs 400 crore, will be using the private equity infusion for capital expansion activities and to grow organically and inorganically through joint ventures and acquisitions.

t has recently acquired Miller Brothers, an auto ancillary based in Michigan, USA. The group is ambitiously aiming to be a $ 1 billion global group by 2013 through both organic and inorganic growth.

“We believe that the auto ancillary and construction equipment sectors in India are high growth areas, driven by increased infrastructure spending, development of roads and highways and rising exports. RSB Group is an established, high quality player well positioned to ride this high growth.” said Shahzaad Dalal, vice chairman and managing director, IL&FS Investment Managers.

IIML is one of the country’s largest domestic private equity fund management companies, managing over $ 1 billion on behalf of leading Indian and International institutions.

IIML presently manages an array of funds focused on investments across infrastructure, life sciences, manufacturing, information technology, real estate Pune and consumer services.

R K Behera, Chairman, RSB, said, “We selected IIML as our partner because of their enriched knowledge and illustrative experience in the private equity sector. Not only did they demonstrate out of the box approach in structuring the deal, but also are long term investors and have conviction in the huge economic potential of RSB Group and automotive and auto components sector. We look forward to a symbiotic professional relationship with IIML.”

Source://expressindia.com

Limited supply of office space is leading to an increase in commercial rental rates by 10-20% on a quarterly basis in most Indian cities.

While Delhi has registered an increase in rentals by 7-8% (in central business district) and 15-20% (in the secondary business district), in Bangalore it is to the tune of 10-20%.

Chennai has seen a moderate increase in commercial rental rates by 8-15%, Hyderabad by 5-10%, Kolkata by 10% and Mumbai by 15%. Pune is the only exception, with rentals showing no appreciation owing to high vacancy levels in the city.

According to real estate consultants DTZ, rentals continued to increase in the Delhi due to steady demand generated by expansion plans of companies. Rentals in CBD have increased by 7-8% on a quarterly basis and by 50-80% on a yearly basis. The quoted rentals in the SBD are in the range of Rs 170-225 per sq ft, per month and have witnessed a considerable increase of about 15-20% quarterly and 50-70% yearly.

“However, in an exceptional case the quoted rentals have also touched Rs 325 per sq ft per month for a building in SBD region (Nehru Place). The rentals in Gurgaon prevailing at about Rs 100 per sq ft per month have increased by 20% quarterly and about 100% yearly in select grade A buildings due to shortfall in immediate supply,” says the consultancy in its city-wide snapshots. The rise in rentals in Bangalore, on the other hand, is not very steep compared to the last quarter. The average rentals for CBD and SBD are Rs 75-90 and Rs 42-45 per sq ft per month respectively, an increase in the range of 10-20% on a quarterly basis. In Chennai too, rentals have increased throughout the city with CBD at a high of Rs 70 per sq ft, showing a moderate increase of 8 -15% quarterly. As far as Hyderabad is concerned, rental values have increased in the range of 5-10% quarterly with the SBD being at a high of Rs 50 per sq ft per month.

Rentals in the CBD are expected to remain stable due to lack of fresh demand expected in the region. In Kolkata, the rental values in the CBD have remained stable in the last quarter. Rentals in the peripheral areas of Salt Lake and New town (Rajarhat) have marginally increased from around Rs 35-40 per sq ft per month to Rs 40-45 per sq ft per month.

Source://financialexpress.com

Oakwood worldwide, the US realty major and Los Angeles-based temporary housing and service apartment provider, has commenced operations in India with its Pune project. “Oakwood has set up base in Pune with its first venture Oakwood Residence, an 84-unit project located in Koregaon Park. Another project is being planned for Pune and will be ready by 2008,” said Veronique Sirault, general manager, Oakwood Residence, Pune.

“The market in Pune is growing with new projects such as the Tata Fiat JV, General Motors and Volkswagen setting up base in the city. Top management executives are, therefore, choosing to come to the city for longer spells of three-six months to begin the planning process for these projects. In such cases, instead of putting them up in hotels, company managements prefer to offer employees a home away from home. Oakwood will target top executives of such big companies,” Sirault said.

During the venture, Oakwood is bringing two of its service apartment brands to Pune — Residence, which offers the comfort of a four-star hotel and Premier which offers five-star hotel comforts through the real estate developer Panchshil Realty.

The company’s Premier brand in Pune is called Linear, a 200-unit project in the city, Sirault said.

Oakwood Residence in Pune will have one and two bedroom apartments with broadband Internet, plasma TV with DVD and international cable TV, custom designed furniture and a fully equipped kitchen. Amenities include a fitness centre, swimming pool and a lounge serving light meals. Prices would range from Rs 10,000 per day for a one BHK to Rs 13,000 per day for a 2BHK apartment. “The company has sourced furniture from China, kitchens from Germany and bed linen from Dubai for its customers,” Sirault said.

Besides real estate Pune, the company is planning to introduce service apartments in Mumbai, Hyderabad, Bangalore, Chennai and Kolkata by the end of 2009.

Source://expressindia.com

Ajay Piramal-promoted real estate fund Indiareit on Wednesday said it has signed a JV with Real Estate Pune-based developer Paranjape Schemes (Construction) to develop one of the largest integrated development projects at Hinjewadi in Pune.

Indiareit would invest Rs 250 crore to develop the project. Ramesh Jogani, CEO and managing director, Indiareit Fund, said, “Out of the total Rs 250 crore, part of the deployment will come from the Indiareit domestic fund and the rest from the Indiareit offshore fund. Private equity fund 3i is an investor in the offshore fund.”

The UK-based 3i had invested over $200 million in the offshore fund. Spread across 138 acres at Hinjewadi, the project envisages a development of IT/ITES special economic zone (SEZ), residential apartment and villas, a retail mall and a star hotel.

The project entails more than 9 million sq feet of development. Shashank Paranjape, managing director, Paranjape Schemes, said, the project would have a market value of more that Rs 3,200 crore.

Source://indiatimes.com                                

Economic growth means different things to different people. For Panda Babu, 34, a carpenter from Kolkata, it means a regular paycheck, being able to live with his family, seeing his 5-year-old daughter go to school and having access to drinking water and toilet closeby.

Panda, a high-school passout, has never had it this good in his 15-year-old career. Working at a residential complex in Pune, bang in the middle of a real estate boom, his skills are in demand. At least two contractors have sent out feelers in the last six months. But he does not get tempted. Gera Developments is taking good care, he says.

A crèche and makeshift school for children, basic medical care, comfortable huts to live in—everything is available on campus. His skills are developing as he’s put through training sessions to use new tools, and there’s a lot of thrust on safety too. “Who would provide all this,” he says. These comforts encouraged him to bring his family from Kolkata. Inspired, a few of his fellowmen back home are now seeking livelihood in Pune rather than Punjab.

Scarce talent, buoyant growth and surging attrition have led to hefty pay hikes, pushing companies to focus on employee well-being and better work environment. But most of it seemed to be happening in the rarefied world of white-collar, air-conditioned corporate offices. Scratch a little deeper and cast the net wider. Perhaps not as brightly, but India seems to be shining at the bottom of the pyramid as well. It’s beginning to show in a few places that liberalisation seemed to have skipped past. There could not have been a better example than the construction and infrastructure sector.

The second-largest job creator after agriculture, the $70-billion construction industry is likely to create 90 million new jobs by 2012. Around 60 million will be unskilled and 25 million skilled and semi-skilled workers.

“Business is coming easy. It’s the labour shortage in the construction industry that is becoming one of our biggest challenges,” says GMR Group chairman GM Rao. Employers mourn the labour shortage, but workers are simply loving it. Salary hikes, better work environment, training and development—in an industry dominated by unorganised, unskilled and semi-skilled workers—indifferent employers are being forced to learn new lessons in employee engagement.

Source://indiatimes.com

Vidyut, an IT graduate from Shirdi, wants to make a career in the BPO industry. To pursue his dreams, he was planning to shift to bigger cities like Mumbai or Pune. However, he may as well stay put. More and more companies are eyeing Nashik to set up their BPO centre as Mumbai and Real Estate Pune have already reached a saturation level.

Currently, nearly 20 IT companies, including BPO companies like WNS Global Services, Tricom India, and Datamatics have found a new home in Nashik. According to a recent report on top alternative destination for BPOs in India by US-based consultancy firm Alsbridge, for smaller cities, Nashik tops the list followed by Mangalore.

Mangalore already has companies like Wipro, First American Corporation, and Mphasis, while Jaipur has one significant presence, Genpact. Ahmedabad is another upcoming city where companies like Bosch Rexroth, Stork, and Oracle are operating.

“Nashik is just witnessing the shift that is happening globally with other tier III cities,” says Sabyasachi Satyaprasad, head of advisory services at research firm NeoIT.

“There is increasing intent by both third-party service providers and captive BPOs to shift to tier III cities like Nashik to optimise the cost of operations resulting due to high attrition rates and increasing real estate costs in top IT cities,” he adds.

Nashik officials are touting huge manpower resources as one of the selling point for the city to the talent-starved ITeS industry. According to a government source, the current strength of BPO workforce in Nashik is believed to be around 2,000, but the number is expected to swell up to 10,000 by 2009.

“Talent base is getting saturated in metros and top IT cities, hence we had to look for the newer resources of talent in other areas like Nashik,” says Chetan Kothari, managing director, Tricom India. Tricom has nearly 400 employees in its Nashik facility and plans to scale this number to 700-800 by the end of the next quarter.

Shifting to Nashik has resulted in 10-15% savings in manpower costs for Tricom, said Mr Kothari. It is interesting to note that along with the BPO ready workforce in the region, companies opening centres in Nashik are also banking on the undergraduate college population to join the companies as they adopt the earn-and-learn model, say recruiters in the city.

Resource://indiatimes.com

There is a new trend in the real estate sector: developers demerge their company to move all FDI-compliant projects into a special purpose vehicle, retaining in the original company only those which do not fulfil FDI norms. This has the advantage of giving scale while overcoming government restrictions on equity participation by overseas investors in the domestic real estate sector.

Among those who have successfully done this are two Mumbai builders — Shahid Balwa and Vinod Goenka — who have each divested 10% in the SPV created for their FDI-compliant projects to Lehman Brothers.

The Bangalore-based Skyline builders is believed to have moved five of its projects which meet FDI norms, of a total of 21 projects, into an SPV. In Pune, Kumar Builders is eyeing a similar route. Kumar Builders chairman Lalit Kumar Jain admitted as much.

“We are thinking of moving all FDI-compliant projects into a SPV although we have not taken a decision on this as yet,” he said. Norms for FDI lay down that a residential project must be of a minimum 25 acres and 50,000 metres for commercial, with a minimum investment of $5 million.

Trammell Crow Meghraj Consultants MD Anuj Puri said with the country being awash with FDI funds, this is the preferred route of builders, to raise funds. According to one estimate, there is as much as $5 billion waiting to be invested in the realty market.

Given this boom, the Promoters and Builders Association of Poona, an industry body, estimates that the city has already received around $800 million investment by way of FDI in the past 15 months. This indicates that there are projects which fit the FDI norms of size and investment required.

Among the most recent FDI investments in the city are the Future group’s $45 million (Rs 180 crore) in the City Group’s Amanora Market City via its offshore fund, Horizon Realty LLC. The entire project is a Rs 850 crore. Recently. IndiaReit Offshore Fund picked up 30% stake in a special purpose vehicle formed by Paranjape Schemes for its 140 acre township-cum-SEZ project, which is located close to the IT Park at Hinjewadi.

Resource://indiatimes.com

Pune strikes an average. Housing is costlier in Pune as compared to Kolkata, but is still lower than Delhi/NCR and Mumbai. A three-bedroom flat of 1,350-1,600 sq. ft in Pune would come at Rs 45 lakh (Rs 4.5 million) with an expected price appreciation of 15 per cent in the next year.

Pune, an emerging infotech destination, is exuberant about the real estate pune developments it is witnessing. "The market is sluggish at present," says Pune-based Aditi Watve, senior executive (investment and sales), TrammellCrowMeghraj, "but is likely to go up in August-September. Six-eight months from now, there will be no drop in the rates and genuine buyers will create a strong demand."

Chennai and Bangalore, too, priced high. The markets of Chennai and Bangalore lack the exuberance of Pune. Housing continues to be costlier in Bangalore with property on Outer Ring Road, off Sarjapur, slated at Rs 4,290 per sq. ft and that in Whitefield at Rs 3,000-3,500 per sq. ft.

Prices in even suburban areas like Jakkur and Hennur, 6-8 km from the city, is Rs 3,000 per sq. ft. Riding on the IT wave, a few pockets of the city had seen prices going up by almost 200 per cent last year.

"The trend correction will happen," says Hari Menon, vice-president (sales and marketing), Mantri Developers. "The prices will stabilise, but in the next six-eight months, we anticipate a 10 per cent appreciation."

How good is it a time to sell? "Someone who has been invested for two to three years will get 80-150 per cent returns on his investment," says Menon.

Chennai is no less hot. In Old Mahabalipuram Road, prices range between Rs 3,000 and Rs 4,500 per sq. ft. The enthusiasm of buyers seems to have waned. Says Thirumal Govindraj of Chennai-based CB Richard Ellis, a property consultancy firm, "The prices have escalated up to 20-30 per cent. We expect a correction of at least 15-20 per cent to happen in the first quarter of 2008. A demand-supply mismatch is leading to speculation and causing rates to spiral up." An appreciation of only 5-10 per cent is expected in the next six-eight months.

Basu and Arora still meet for their 'snooker-over-sips' ritual every Saturday. Arora is still hopeful of buying a house in Delhi or NCR or even Mumbai. But, he still does not have answers to the questions 'when?' and 'where?'

Source://rediff.com

 Pune’s skyline is all set to change. The city will soon have its first 22 storey high-rise residential complex on a 400-acre integrated township. This is under the special township policy brought out by the Maharashtra government.

Real estate developer, City Corporation, has roped in 70 farmers in Hadapsar in Pune who have been co-opted as shareholders in the township called Amanora Park Town.

City Corporation is promoted by Aniruddha Deshpande, who is considered to be close to NCP leader Sharad Pawar. “This is Maharashtra’s first high rise residential project outside of Mumbai. The first offerings of Amanora Park Town will have 10 towers, each between 18- 22 stories high,” Deshpande, MD, City Corporation Ltd said. The Rs 9,000 crore township will have its own 100 mw power plant, a railway station and be a digital city.

The township will totally consist of 16,000 apartments in ten 18-22-storey towers designed by the Singapore based architects P&T Consultants Pvt Ltd. This includes 680 apartments of two bedroom, three bedroom and four bedroom luxury apartments which will be ready for occupation in 24 months.

The company has received clearances from the railway authorities for setting up a railway station and is willing to invest for the infrastructure for setting up the railway station,” Deshpande said.

He expected the railways station to commence once a critical mass was reached in the next couple of years.

Source://financialexpress.com

The picture is becoming bigger for the core sector. Lower margins from infrastructure projects and expectations of a higher yield from real estate projects have seen many a core sector company jumping on the realty bandwagon.

Over half a dozen infrastructure companies laid their hands on the realty sector either with their own land or through acquisitions in recent months.

They include: Garnet Construction, Hindustan Construction Company (HCC), Valecha Engineering, KSL Realty and Infrastructure, Unity Infrastructure and Patel Engineering.

According to industry estimates, infrastructure projects have margins between 4 per cent and 5 per cent, while realty projects provide returns in the range of 20-25 per cent; and in certain cases this can go above 40 per cent.

Garnet Construction has announced a Rs 1,200-crore residential-cum-commercial township project at Panvel near Mumbai on its own 400 acre land. To woo international buyers, it has tied up with the Dubai-based real estate developer Sternon group. Besides, Garnet has announced a Rs 800-crore residential project in Nasik, for which it will acquire the land soon. It is also planning a JV with Sternon to develop and market properties in Sweden and Mauritius.

To focus on diversification, companies such as HCC and KSL Realty have floated subsidiaries. HCC announced its real estate foray through its 100 per cent subsidiary, HCC Real Estate, which will invest Rs 1,000 crore initially. The firm is developing a 150-million sq ft hill town project at Lavasa, Pune, on 12,500 acres.

From its land bank in Vikhroli in Mumbai, the company is building a 1.7 million sq feet corporate park and two slum-rehabilitation projects on 25 acres of land. It is acquiring land for a 1,000-acre SEZ in Nashik, a 300-acre township in Real Estate Pune and a 200-acre township in the Mumbai Metropolitan region. The total value of all the projects is pegged at Rs 28,760 crore, the company said.

KSL Realty and Infrastructure is investing Rs 450 crore and Rs 225 crore in Nagpur and Kolhapur respectively through its wholly owned subsidiary, Reward Real Estate Company. The company is also planning to develop properties in Gujarat, Punjab, Himachal Pradesh and Dadra & Nagar Haveli, a company spokesperson said.

Patel Engineering, which has also forayed into power generation, has around 500 acres of land across the country. It has 350 acres in Hyderabad and 80 acres in Mumbai, Panvel and Karjath near Thane. It is likely to take up commercial development projects in Mumbai. “We plan to go for development in a phased manner. With land bank in hand, construction is a small component,” says a official from the company.

Infrastructure development company Valecha Engineering has taken the SPV route for its realty foray. It also plans to make the owner of the land a partner in the project. The company will invest Rs 100 crore in the venture. It recently acquired 21 acres in Pune.

Explaining the rationale behind the new-found love of core sector companies, Naveen Jain, an analyst with Emkay Shares and Stock Brokers, said, “You cannot do projects with 4 to 5 per cent net margins. Even if real estate projects strain the company’s financials in the short term, they yield results in four years,” he says. Source://business-standard.com

Hindustan Construction Company (HCC) aims to participate in the build-operate-transfer (BOT) projects in the airport and road construction segment in a big way this financial year and is eyeing an order book worth Rs 5,000 crore from it.

“We would also look at hydel power projects in the coming years,” HCC chairman and managing director Ajit Gulabchand said.

The company is looking for strategic partnerships in these sectors in the coming two years and wants to proactively participate in the public private partnership schemes.

It is also contemplating forming a 100% subsidiary for such projects. “We may create a 100% subsidiary for our BOT projects. It is yet to be decided whether we would first form a subsidiary or get the contract for 3 projects and then create a subsidiary, but eventually it has to happen,” said Gulabchand.

HCC would prefer a JV partner in all its major projects as the company feels it reduces the risk involved in the project. Also one person less would participate against the company in the bidding.

For the implementation of BOT projects, a special purpose vehicle (SPV) involving all the stakeholders has been formed.

HCC’s real estate arm has so far invested Rs 200 crore in various projects including its hill township project, Lavasa, coming up near Pune. It has over 63% stake in the project. It expects its real estate business to generate revenue from 2009. For Lavasa, the company has signed a MoU with Accor, Starwood and Fortune for building hotels and resorts. It currently has a land bank totalling 14,036 acres.

The company, which had earlier planned to construct an IT park at its 11-acre plot in Vikhroli, Mumbai, now plans to convert it into a corporate park.

Source://dnaindia.com