Indian Property News on 'October, 2006'

Govt weighs FDI risks in reversing judicial verdict on sealing

The government is faced with concerns that a constitutional amendment to end the sealing crisis could send out a wrong message to foreign investors if it places the law suspending court-ordered municipal sealing drive for a year beyond judicial review.

With the country being billed as rule-based democracy to attract foreign direct investment, the Centre is weighing the risks of such a move could entail at a time when Indian is fast emerging as a major FDI destination.

“You have to take into account the impact of the constitutional amendment on the country’s image when there is a huge flow of FDI, an official source said.

The group of ministers is divided on the ways to tackle the sealing drive issue, with some members opposed to union Urban Development Ministry’s suggestions to place Delhi Laws (Special Provisions) Act under Schedule nine of the Constitution.

“There are arguments that any such move will send out a message that the government could come under pressure from protests over a judicial verdict aimed at setting things right.

“There are concerns that a constitutional amendment to reverse a court order could hit the country’s image as an ideal investment destination where the rule of law prevails,” the source said.

The GoM comprising Law Minister H R Bhardwaj, Delhi Chief Minister Sheila Dikshit besides Union Urban Development Minister S Jaipal Reddy and his Deputy Ajay Maken has virtually refused to intervene to stop MCD drives as it had asked protesting shop owners to instead approach the Supreme Court’s Monitoring Committee.

Source: http://www.zeenews.com

Stone of new housing project laid

A leading real estate company Amariss has started to develop 180 flats in three acres of land in Sunny Enclave (Desu Majra) Kharar. Minister for Local Bodies and Parliamentary Affairs Chaudhary Jagjit Singh laid the foundation stone of the project and also participated in its bhumi pujan today evening.

Director of the company, Tejinder Bhatia, while addressing mediapersons said that these flats have been named Vrindavan Apartments.

He said that the flats have been divided into five categories.

He said that the rate of the flats is lowest in the region ranging from Rs 1,600 per square foot to Rs 1,800 per square foot.

Bhatia said that the company is also going to start its project at Ludhiana (Pakhowal road) with 200 apartments, in Kasauli with 100 apartments and Rs 1,000 crore project at Gurgaon (Sohana Road) on 125 acres of land.

Source: http://cities.expressindia.com/chandigarh.html

Global Infocomm to open 600 real estate showrooms

New Delhi-based Global Infocomm is planning to open 600 real estate showrooms at a cost of Rs 120 crore. Of the 600 real estate showrooms, 70 will be set up in Uttar Pradesh with an investment of Rs 15 crore.

SK Jain, managing director, Global Infocomm Ltd, said the property shops were places where people could buy, sell or rent properties instantly.

Jain said the company planned to open a countrywide chain of property shops, starting with 16 in Delhi and the NCR, Lucknow and Kanpur by December. Agra and remaining districts of UP would follow by the end of next year

The 1,000-sq ft showrooms would have a five-star ambience and a centralised presentation system. Jain said the property shops would be interlinked through a VPN network to the company portal “Jaaydaad.com”, which would serve as a centralised database of all the hot properties listed at the 600 property shops for sale or rent.

Through these property showrooms, he said the company was aiming to create the “largest organized real estate marketing network” in India.

Source: http://www.business-standard.com

4.7 lakh employment opportunities in SEZs for AP

An estimated 4.5 lakh employment opportunities would be created through the 48 Special Economic Zones (SEZs) coming up in Andhra Pradesh in the next two years.

The SEZs will create a conducive environment for investment and exports and rope in foreign and domestic firms, according to an official statement here today.

The Centre has approved 48 SEZs of which IT/ITES will have 27 SEZs, pharma 6, multi product 4, footwear 3, and one each for biotech, apparel, building products, services sector, paper, textile, gems and jewellery and semiconductor SEZ (Fab), it said.

The SEZs approved for gems and jewellery (50,000 jobs), footwear and leather (30,000 jobs) and apparels (60,000 jobs), land for which has been alloted, are employment oriented.

The state is encouraging such SEZs keeping in view the high employment potential. By establishing these SEZs, 1,40,000 jobs would be created among lower middle class, weaker sections particularly SCs, STs, BCs and minorities, the release added.

In respect of multi products SEZs being developed for HPCL at Visakhapatnam and ONGC at Kakinada, state government has acquired waste and single crop lands and is making it available to them. These are long term projects and when fully functional, it will create about 50,000 jobs in manufacturing sector, the release added.

Source: http://www.newkerala.com/

Goldmans to invest Rs 10 bn in DLF

MUMBAI, OCTOBER 19: US investment bank Goldman Sachs is likely to invest Rs 10 billion ($221 million) in unlisted Indian real estate firm DLF, a business newspaper reported on Thursday, citing unnamed sources.”Goldman Sachs is bullish on investing in some of the company’s ongoing projects, including the one being developed in Delhi,” the report said.

DLF’s Chief Financial Officer, Ramesh Sanka, said the report was ‘absolutely baseless and speculative’.

Goldman, which ended an investment banking and broking alliance with Kotak Mahindra group in March, has said it was looking to invest $1 billion in India in the next few years.

Source: http://www.financialexpress.com

SC provides breather to Delhi traders

New Delhi: Out of three lakh traders in Delhi, only 46000 have filed affidavits so far. This is the status of the undertakings which were meant to be filed by traders running commercial establishments in residential areas, declaring that they will close down their businesses voluntarily.

Inspite of the October 31 deadline set by the Supreme Court, traders have not filed any new affidavits with the MCD.

”No one has filed any new affidavits,” says MCD spokesperson Deep Mathur.

Traders in the city feel that with conflicting orders being passed between the judiciary and the Central Government, it is safer not to give anything in writing that would hold them accountable.

Ironically for the 46000 traders, who have filed their affidavits with the MCD have no escape route. Even if their commercial establishments fall on the notified stretches that have been exempted from sealing, they are legally bound to shut shop.

The traders were given an extension until January 31 to file their affidavits on the grounds that the capital’s 3000 architects are not enough to help traders file affidavits.

”We are not happy. They are not coming up with any permanent solution,” says Traders Association president Praveen Khandelwal.

Even while the judiciary and the Central Government struggle to look for an effective solution, the resentment amongst the traders is growing every day.

Source from CNN-IBN

DLF plans to invest Rs 8000cr in Madhya Pradesh

DLF Ltd., one of the leading national real estate players in the country, announced plans to invest Rs 8,000 crore in the state of Madhya Pradesh. DLF top management led by Managing Director Mr. T. C. Goyal met ministers and top officials of the Madhya Pradesh State Government to finalise investment plans. The team met the Minister of Industries and Commerce, Mr Babulal Gaur.

The investments are to cover Housing, Industrial SEZs, IT parks and the state’s first international class Convention Centre with a Hotel in Bhopal. Also planned are similar projects in other important cities across the state i.e. Gwalior, Indore and Jabalpur.

“We are planning to invest Rs 8,000 crore in various real estate and infrastructure projects in Madhya Pradesh. This is well in tune with DLF’s plans to provide global standard infrastructure that will act as the drivers of the new age economy. This is our commitment to Building India.” says Mr Rajeev Talwar, Group Executive Director, DLF Ltd.

DLF has in the recent past, firmed up major infrastructure and real estate projects in states as far apart as Tamil Nadu in the South, West Bengal in the East and, Maharashtra in the West.

Already, the company has invested in building up Asia’s first private township, ‘DLF City’ adjoining Delhi. It has gained worldwide reputation as a new technology business hub, housing 70 of the Fortune 500 companies.

Source: http://www.moneycontrol.com

Government okays 22 FDI proposals

New Delhi: The Centre has approved 22 foreign direct investment (FDI) proposals worth Rs 896.25 crore ($198 million), including a Rs 511-crore investment plan of Singapore-based Solitaire Capital Investments Pte and Solitaire Ventures Pte in India’s booming real estate sector.

The Finance Ministry also cleared Mauritius-based power producer Bijlee Bharat Holdings’ plan to set up a subsidiary in India with an initial investment of Rs 308 crore, which will invest in multiple power plants.

The proposals were cleared by Finance Minister P Chidambaram on the recommendations of Foreign Investment Promotion Board.

The plans approved on Tuesday also include a plan by NSK Limited of Japan which has committed Rs 41.25 crore to set up a new JV in Chennai to manufacture magnetic clutch bearings and ball bearings.

Roaring retail…

Spain-based Lladro Commercials S.A. will pump in Rs 5.85 crore for increasing its equity in Spa Agencies (India) from 26 per cent to 49 per cent.

Additionally, the government also cleared two more proposals in the retail sector.

These include Sri Lanka-based Damro Exports Pvt Ltd’s proposal to sell furniture under the single brand name ‘DAMRO’ and Italian firm Rino Greggio’s plan to set up a joint venture for selling silverware and other allied products.

UK-based Alpha Airport Group’s proposal to establish a wholly-owned subsidiary for setting up duty-free shops, flight kitchens and food and beverage outlets at airports in the country at an investment of Rs 22.5 crore was also approved.

A proposal by the Netherlands-based Diageo Highlands Holdings to set up a joint venture for manufacturing liquor received clearance as well.

Tele-funds allowed

The government also gave its nod to Aircel Cellular Ltd and Dishnet Wireless Ltd to accord the conformity approval to the acquisition of 73.99 per cent stake by Mauritius-based Global Communications Service Holdings, which is owned by Malaysian telecom firm Maxis.

Other proposals that were cleared include Bermuda’s Mandarin Oriental Ltd’s plans to set up a wholly-owned arm for providing consultancy services in hotel and tourism sector.

In the media field, a proposal by Reed Elsevier Overseas of The Netherlands to set up a joint venture for publishing six magazines was also cleared by the Central Government.

Source: Mumbai Mirror Bureau

http://www.mumbaimirror.com

Reserve Bank likely to ease SEZ lending norms

The Reserve Bank of India (RBI) may review its decision to club lending to special economic zones (SEZs) with commercial real estate after the government unveils a revised policy.

An indication to this effect was provided by the RBI at recent meetings with bankers, who had sought clarifications on how should they treat lending to genuine infrastructure projects in SEZs, banking sources said.

The RBI is likely to prescribe a graded structure of risk weights for bank finance to SEZs. It may lower the risk weights for lending to infrastructure projects in SEZs to 75 or 100 per cent from 150 per cent applicable for commercial real estate exposures.

Recently, the RBI decided that the exposure of banks to entities setting up special economic zones or for acquisition of units in SEZs would be treated as exposure to commercial real estate sector. This entails 150 per cent risk weight for such loans.

A 100 per cent risk weight means banks have to allocate capital of Rs 9 for every Rs 100 lent and a risk weight of 150 per cent would translate into capital allocation of Rs 13.5 for every Rs 100 lent.

The RBI has hiked the risk weights on exposure to sensitive sectors to 150 per cent from 100 per cent in the last couple of monetary policy reviews. These included exposure to capital market, home loans above RS 20 lakh and commercial real estate.

Banks have been going slow on lending to SEZ following the stringent directions of the RBI. The central bank is of the view that most projects in the SEZ are primarily real estate development and is indirectly fuelling asset prices, which have reached the peak.

Source: http://www.business-standard.com/

Indian realty lures global investments

In the corridors of international investment, what’s really grabbing all the eyeballs towards India right now is the hot property market.

Experts are predicting high returns of 15-30% from the burgeoning Indian real estate market, which has already seen a fund flow of $1.5 bn and slated to grow at 30% annually. Foreign investors are hoping that they will be able to reap the harvest.

Leading international player Calpers has invested $100 mn into an Indian realty fund. US investment bank Morgan Stanley may invest $1 bn in Indian Construction companies. US developer Tishman Speyer has tied up with India’s ICICI Bank to pour $1 bn into the market.

Players like JP Morgan , Lehman Brothers and Merrril Lynch are hunting for deals even as funds are also coming from places like Middle East, Malaysia and Singapore.

The relaxation in FDI norms has also increased foreign fund flows into the Indian realty market and a lot of new funds are also being setup, but deployment is rather slow.

The global players are betting big on India. However, on the flip side, experts fear that valuations look stretched and the climbing land prices could pull down returns. The distribution of foreign funds have been rather uneven, as most of the funds have gone to places like Bangalore, Mumbai, Gurgaon and Hyderabad.

India’s property market is attracting global realty funds and industry players expect a flow of up to $5 bn over the next five years to flow into India. Even though soaring prices pose a risk of a meltdown, foreign players are quiet confident that the ground will not fall from beneath their feet.

Source: www.timesnow.tv