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  • 1. Presenting the weekly newsletter from MagicBricks Research Team Edition V (August 03-09)
  • 2. Stock Market and Finance News:
    • Yatra to put $1 bn in realty
    • NYSE listed real estate investment firm Yatra Capital, is planning to invest over $ 1 billion in India over the next 12 months. Yatra has invested 21.6 million euros to pick 49% holding in Kolte Patil Developers. This joint venture will initially develop three residential projects in Pune.
    • Allahabad bank slashes home loan rates
    • The bank has reduced interest rates on fresh housing loans by 1% on fixed and floating schemes. The move is expected to lure more home buyers.
    • ICICI plans $2 billion infrastructure fund
    • ICICI Bank is now in the process of setting up a $2 billion infrastructure fund which will be managed by the bank and not by ICICI Ventures. This will be the largest infrastructure fund by an Indian entity to hit the market. Depending on the interest in the fund, the bank may also expand the size to above $2 billion.
    • Piramal’s Indiareit to raise $750 m
    • Ajay Piramal-controlled real estate private equity fund will raise close to $750 million overseas to invest in the real estate sector. The company is managing a real estate fund with a corpus of Rs 1,300 crore. Global private equity firms have already committed over $3 billion worth of investments in the Indian real estate space. This is the company's second such fund.
  • 3. Stock Market and Finance News:
    • Adopt PPP for infrastructure sector: FM to states
    • The Finance minister says that country will have to raise investment in infrastructure to 8% of its gross domestic product in the next five years from 4.6 % at present. He said that as per Planning Commission’s estimates, investment in infrastructure needs to be of the order of about Rs 14,50,000 crore or $320 billion during the eleventh plan period.
    • Infrastructure finds private investors pillar of strength
    • ICICI bank’s $2-billion plan follows funds floated by Axis Bank and Global PE majors Citi, Blackstone & 3i. ICICI’s fund would invest in roads, ports, power, SEZs and other infrastructure-related activities. The bank is looking at investors with long term commitment of over seven years. The funds would be raised from the overseas market.
    • India's demand-driven real estate sector to witness higher foreign fund inflows
    • Foreign funds are being lured by potential investment returns to the tune of 25% and more from Indian projects. In the residential segment there is a shortage of 19.4 mln units out of which about 6.7 mln are in urban areas.
  • 4. Stock Market and Finance News:
    • HDFC mops up $800 mn for realty
    • Housing Development Finance Corporation has announced the closing of its first sponsored international real estate fund, HIREF International LLC, after mobilising $800 million. This makes it the country’s largest international real estate funds.
    • Quipo to raise $100m from PE funds
    • Quipo, part of the Srei Group, is out to raise the funds by early next year. A bulk of this would be used for financing telecom tower business, even as the company plans foray into the development of airport infrastructure.
    • Shore up infrastructure finance: Experts
    • Capital-intensive infrastructure projects tend to be of long gestation, requiring long-term project financing. Experts advise that the way ahead is to channel flow of liquidity into the lackluster secondary market for corporate debt.
    • Ansal API lines up Rs 1,000-cr follow-on issue
    • The company plans to use the funds generated for part-financing its ongoing real estate projects and undertaking new projects in hospitality and education sectors. Apart from its ongoing real estate projects in northern states, Ansal API is also diversifying into Maharashtra and is undertaking an international project in UAE.
  • 5. New Plans/Ventures
    • Kshitij Investment to set up market cities
    • Kishore Biyani’s Future Group-promoted Kshitij Investment Advisory is establishing seven ‘market cities’. The proposed cities will be complete leisure-cum-shopping destinations with convention centres, food plazas, shopping malls, service apartments, cinemas and even residential complexes. The market cities are being built over 17 to 30 acres of land, and they are coming up within the city limits of Mumbai, Chennai, Bangalore, Hyderabad and Pune
    • Puravankara eyes Rs 500-cr hotel biz, ties up with Accor
    • The cpmpany plans to launch business class hotels in Bangalore, Kochi and Coimbatore. Puravankara has an existing land bank of 14.85 million Sq Ft, plans to look at mixed used development, comprising residential, hotel and high-end shopping complex. The company has 20 projects under implementation out of which 17 are residential and three are nonresidential.
    • DLF, Fortis to invest Rs 3,000cr for 15 hospitals
    • Under the agreement, the two companies could form a joint venture for the hospital projects. Fortis may hold 74% stake, while the rest will lie with DLF. The hospitals are likely to be of 250-400 bed capacity with a minimum built up area of 20,000 Sq Mts.
    • Pricol Property in JV with Pune's Vascon's Engineers
    • The Coimbatore based company is developing 30 acres residential and commercial complex in 30:70 joint venture with Pune based Vason Engineers. The JV will also develop a 300 room hotel.
  • 6. Municipal Issues
    • Transfer fee on property likely to go
    • The Government is planning to abolish transfer fee charged by the developers from buyers at the time of sale. The fees vary from different properties located in different locations and ranges from Rs 100-700 per Sq Ft in the Capital. One of the prime objectives of the move is to bring down the real estate prices for the end user. Abolishing the transfer fee will not be difficult for the state governments because it does not have any implications for the state exchequer.
    • Authorities trying to thwart Apartment Act
    • Realising that implementation of the Delhi Apartment Ownership Act 1986 could lead to a revenue loss of nearly Rs 10,000 crore by way of lease money (that is being wrongly collected from nearly 5 lakh apartment owners), the Union Urban Development Ministry, the Delhi Government and the Delhi Development Authority have been collectively trying to thwart the Act
    • NHAI to develop wayside amenities
    • NHAI will tie up with RIL, HPCL and Essar to develop way-side amenities at every 100 km of national highways. Outlets would not only provide fuel but also food, recreational facilities, washroom, vehicle accessories and workshops.
  • 7. Trends
    • Govt lays foundation for 5-day-flat registration
    • A new model for property transactions is being drafted to ease cumbersome procedures and reduce documentation requirements for fast-tracking property mutation process. At present, it takes two months of efforts for a buyer to get a property mutated, or transferred, in his name. Apart from facilitating the consumer, the move could help in attracting foreign investment in the real estate sector. It is felt that foreign investors are wary of investing in Indian real estate due to red tape.
    • Pune's closed factories become a real estate play
    • The rise in real estate prices is tempting companies to convert their factory premises into real estate projects in the Pimpri-Chinchwad area. These projects could fuel the rise of the Pimpri-Chinchwad, which already enjoys better roads, is well laid-out, and a cheaper alternative to Pune.
    • DLF IPO sets new commission standards
    • Brokers in India typically receive commissions of 0.2-0.4 per cent of the value of IPO shares allotted to their retail clients, but for the DLF issue brokers are being paid commissions of Rs 200-500 per application form -- whether or not clients get the shares.
  • 8. Trends
    • Realty developers now zero in on the masses
    • A drop of around 20% in residential transactions since January has persuaded many developers to take a second look at their business models. Prices have fallen 15-20 % in New Delhi and Punjab and have paused in Mumbai after sharp rises. Most developers have been targeting the roughly one million families bringing in $25,000-50 ,000 a year — for example , middle level accountants or software programmers. Another million families are expected to join their ranks over the next three years, while the number of ‘super-rich’ families with an annual income of more than $250,000 is set to nearly triple to 141,000.
    • Easy home loans for poor in the pipeline
    • The Govt is thinking of providing home loans at subsidised interest rates. This scheme will increase credit flow to the economically weaker sections (EWS) and lower income groups (LIG) who find it difficult to purchase a house due to problems in getting loans from banks and the high interest rates prevailing in the financial market.
    • Rising interest rates dampens realty growth: Assocham
    • Rising home loan rates is acting as a dampener to the growth of housing sector, lowering its growth to 26.6 per cent in 2006-07 from 29.1 per cent in 2005-06. Nearly 60 per cent of loan aspirants are staying away from the pre-launch sales.
  • 9. Trends
    • Realty booms creeps into hospitality sector
    • Ansal API has floated a special purpose vehicle (SPV) with Ambience Hospitality Management to build 30 hotels at various locations at an investment of Rs 2,000 crore. It includes Greater Noida, Mohali, Jaipur, Jodhpur, Amritsar, Lucknow, Ghaziabad apart from South India. Besides this, Jones Lang LaSalle Meghraj is planning to introduce Jones Lang's hotel division from the US, and service Jumeirah hotels of Dubai and Dusit Hotels from Thailand.
    • Freebies rule big as builders seek alternatives to rate cuts
    • Developers are offering incentives such as free parking space and monetary assistance to attract homebuyers. Express Garden in Indirapuram is offering free parking space in a bid to encourage home buyers. Bangalore-based developer, Akme Projects Ltd, has tied up with HDFC Bank, ICICI Bank Ltd and Centurion Bank of Punjab Ltd to offer prospective buyers home loans right at the venue of the project launch.
    • Realty feels IT-ITES ripple effect
    • Factors like rising manpower and real estate costs are causing IT-ITES companies to move to newer Tier-II and Tier-III destinations which have lower real estate and manpower costs.
  • 10. International Realty News
    • Plaza Centers' Indian real estate venture
    • European property developer is investing $1.2 billion in India to set up 50 entertainment and commercial centers over the next five years. The first such center is expected to open by the end of 2008 or early 2009. The Amsterdam-registered company has already begun land development in the western city of Pune in partnership with a local firm. It plans to start projects in the southern cities of Bangalore, Channai, Trivandrum and Cochin.
    • West Properties firms up India realty plans
    • The London-listed company will invest Rs 500 crore in its properties in the next couple of years. The company is building a 7,26,000 Sq Ft mall in Kalyan, on the outskirts of Mumbai. It has completed the first phase and will start the construction of the second phase in five months. The mall would have four levels of retail and entertainment space.
    • Berggruen Holdings to invest over $300 mln in India
    • The private equity firm is looking to invest in real estate development in India, with each investment ranging between $20-100 mln. US investment firm sees opportunity if India slows US investment firm Berggruen Holdings Inc expects the flow of foreign funds into India to slow down, creating big opportunities in real estate, private equity and potentially in the stock market.
  • 11. Regional Realty News
      • HUDA plots to be priced higher
      • HUDA has quoted the massive expenditure on mega infrastructure projects such as Metro extension in Gurgaon, wider roads and flyovers, costlier acquisition of land and rising development cost of the colonies as reasons for the proposed hike in its property rates. Sources said HUDA was planning to put a price tag of Rs 10,000 per Sq Yard or more for plots in its future colonies such as Sectors 48, 49, 50, 51 and 52, which it is going to float by the end of the current financial year.
      • QVC to develop two townships in Gurgaon for Rs 2,500 cr
      • Bangalore-based real estate firm has acquired 200 acre land in Gurgaon for developing two townships of 100 acre each. These townships will be developed in next 3 years.
      • CM Hooda announces plan to construct new canal
      • The new canal will stretch from Hathni Kund to Naraingarh. A budget of Rs 400 crore has been allotted for this project. This canal will boost irrigational network in the state.
      • RIL may shift food stores in UP to malls
      • The company is in talks with developers to book significant space as anchor tenant in malls coming up in Lucknow, Allahabad and Kanpur. The company has signed up as the anchor tenant for Greater Noida’s Ansal Plaza.
      • UP Govt Announces 1000 km expressway
      • The Expressway will stretch from Noida to Ballia, on the left bank of the Ganga, which will cost about Rs 40,000 crore. Normally such projects take five to seven years to be completed, the UP government intended to finish it in three years.
  • 12. Regional Realty News
    • DELHI
      • DDA's biodiversity park a green worry
      • Delhi Development Authority plans to convert 223 hectares of southern ridge near Vasant Kunj and Vasant Vihar into a mammoth park called Aravalli Biodiversity Park. The DDA wants to build a safari park, a rock garden, a cactus house, interpretation and information centres, among other things, in the 223 hectares.This has irked environmentalists who say that the natural forest should be left alone.
      • MCD’s slum wing in one more scandal
      • MCD authorities let the favoured builder construct a huge basement at a commercial complex in West Delhi. This is no ordinary encroachment — the basement is twice the size of the plot that had been paid for. MCD officials favoured the builder over Delhi Metro Rail Corporation (DMRC) in direct violation of an order of the Union cabinet. The builder was able to acquire the land at almost the reserved price despite its prime location in Raja Garden, next to the Metro station, triggering suspicions within MCD and outside.
      • MCD may seal W Delhi building and cancel lease
      • Smelling a possible scam in land allotment, MCD says aid that they would be sealing the said property in West Delhi and canceling its lease very soon. The basement encroached upon is twice the size of the plot that had been paid for. Moreover, the MCD officials had favoured the builder over Delhi Metro Rail Corporation (DMRC) in direct violation of an order of the Union cabinet.
  • 13. Regional Realty News
      • Parsvnath to invest Rs245 cr in Hyderabad commercial project
      • The company, which performed the ground-breaking ceremony of the project, would develop the commercial complex and hotel in the next three years. The complex would have a total saleable area of 3 lakh Sq Ft and the 5-star hotel would be spread over an area of 1.75 lakh Sq Ft.
      • HUDA’s search for accommodation continues
      • The Hyderabad Urban Development Authority is searching for a proper accommodation after it received a letter from the Government to vacate Paigah Palace at the earliest and hand it over to US Consulate authorities.
      • Tribals occupy 70 acres of land in Andhra
      • CPI(M) State secretary launched the second phase of ‘ bhooporatam ’ (land struggle) in the tribal areas. Govt aims to consolidate more and more land and hand it over to the tribals.
      • Land for Gandhinagar IT park alloted to DLF at cheap rates: Congress
      • Congress MLA claimed that the state government has given 25 acre land in Gandhinagar for constructing an Information Technology (IT) Park to DLF for just Rs 50 crore. The land was worth Rs 125 crores as per existing market rates
  • 14. Regional Realty News
      • BDA approves mega housing scheme around Bangalore
      • The Bangalore Development Authority approved the formation of five new layouts, which will envelop about 1.76 lakh house sites of various dimensions. The developed layouts would be owned by the BDA and land owners in the ratio of 60:40. The cost of land would be Rs 500 a Square Foot.
      • Land acquisition for Bijapur airport causes concern
      • The airport is being planned to develop the airport in 650 acres of land. Once commissioned, the project is bound to give great fillip to tourism, horticulture and industry. However, locals feel that they may be robbed of their traditional jobs.
    • ASSAM
      • Majuli Development Authority set up
      • Chief Minister Tarun Gogoi announced the constitution of a Majuli Development Authority and earmarked Rs 100 crore for it for undertaking development works in the erosion hit river-island Majuli.
      • MAHARASHTRA Fiat evaluating bids for Kurla property
      • The automaker is evaluating bids for its 54-acre property in suburban Mumbai’s Kurla area. The property is estimated to fetch Rs 300 crore to Fiat. Shiv Sena leader Manohar Joshi's Kohinoor Group is interested in the deal.
  • 15. Features
    • Condominiums on ships
    • The first condominium cruise-ship, The World, was launched a few years ago and offers 110 luxury residences, a medical centre, a swimming pool, an art gallery, a spa and restaurants. Ports of call vary with the season but, within a year, The World plans to take in some of the most desirable seaside locales in the Mediterranean, western and southern Africa, the Caribbean and Asia. Prices start at $825,000 for a 31-Sq Metre studio, including furnishings and an entertainment centre.
  • 16. Area Profiles
    • Glamourising Ghaziabad
    • Ghaziabad is the sixth most dynamic city of the world and is now becoming the hottest investment destination in the NCR with a number of major world-class projects on various fronts. As part of the 2010 Commonwealth Games, GDA is planning to have two big five star hotel projects in the city. The Jal Nigam is planning to increase the water supply to the city
    • Flourishing Faridabad
    • The first townships to develop there on the lines of Gurgaon private mode include Charmwood Village (developed by Eros), Lakewood City and Greenfield Colony. These townships also enjoy close proximity to South Delhi. The fastest surge in Faridabad has been experienced by Sector 21. The market rates in Sector 21 varies from Rs 25,000-30, 000 per Sq Yard.