Indian Property News on 'December, 2006'

Why Just Faridabad Property?

One reason standing for the success of fast developing Faridabad can be discussed from development viewpoint. With excelling in industry, better medical facilities and better infrastructure, anyone can look forward to new Faridabad in approaching years.

Faridabad, enjoying the status of being industrial heart of Haryana, has grown enormously in the past few years, chiefly because of a large number of industries have come up in the town.

While real estate soothsayers believe that Real Estate Faridabad has witnessed an unparallel growth, particularly because of surrounding property boom in NCR, the fact remains that the city is loaded with large prospects for multifaceted growth. This makes it the next hunting ground for property developers after Gurgaon.

Not only one of the most flourishing cities in Haryana, Faridabad is also posing stiff competition to the other NCR towns of the capital city. Anyone planning to give concrete shape to a dream of yielding high returns by investing in Haryana property, then nothing could be a better prospect than property in Faridabad as compared to its counterparts – Ghaziabad, Noida, Greater Noida, Gurgaon, and Sonepat.

What is most crucial in Faridabad’s location is its proximity to the capital. It takes only a few minute’s drive to step into the city and reach to the places of importance. This in turn brings positive results for the property in Faridabad.

In addition to commercial projects, a multitude of residential projects in Faridabad are also in their phase of development.

Consult the following chart to scout for ongoing and updated property prices in Faridabad:

Faridabad Property Rates

** Price as per the market value in Dec 06
** Property Rates are subject to change due to market vagaries and may differ by virtue of location and project, depending and facilities and other factors.

Gurgaon Property Builders to Pay a ‘Metro Cess’

Now, bringing Delhi’s Metro Rail into Gurgaon and Ghaziabad is going to cost. The Haryana and Uttar Pradesh are considering imposition of a ‘Metro Cess’ to finance several upcoming Metro projects.

The Haryana Government has thought of making its contribution by levying a tax on property developers to raise Rs.680 crore needed for development of Gurgaon’s Metro Rail, says SS Dhillon, director of town and country planning, in the Haryana Government. It would be mandatory for all property builders to pay the tax that will be a part of external development charges.

However, the step can push up the prices of property in Gurgaon as the consumer will have to bear a little portion of the overall cost, says NK Sehgal, president, Ansal Properties Limited.

The Ghaziabad Development Authority (GDA) Board is holding wide range of talks about the issue of levying a Metro tax. The state government will soon come up with final decision. The cost of connecting Ghaziabad by Metro rail with Noida and Delhi will be about Rs 3,300 crore.

The GDA is also considering about imposing the cess on construction of dwelling units in the upcoming “Hi-tech city” and “Integrated City”. But, builders of Vaishali, Kaushambi and other existing residential colonies can breathe a sigh of relief as no tax will be charged from them because these areas have already been developed, says a GDA official.

Gurgaon Sealings – A boon for residents or curse for traders?

The HUDA stepped up its drive and took action against unauthorized commercial establishment operating from residential areas in Gurgaon. The action was spread across the entire Gurgaon, with majority of the effect being seen in DLF Phase I, where the agency sealed 40 units.

369 shops were sent the legal notice for running shops from residential premises in HUDA sectors. Of this, 119 have complied with the notice whereas the rest are still continuing to do business. Despite the fact that there was such a stringent warning beforehand, none of the traders with shops in private colonies have followed it.

However, the residents welcome the steps taken by the HUDA as they find their dwelling units less chaotic after sealing. A multitude of shops was increasing in the residential area that leads to parking problems and undue rush. Now, people are taking sigh of relief here, says Raj Rawat, who lives in South City II.

Most residents believe that commercialization was giving birth to unsocial activities in these areas. “Due to establishment of commercial units, every kind of person comes to our areas. This is perhaps a reason why there is an increase in theft and eve teasing cases”, says Kirti Jain, a resident of DLF Phase IV.

Contrary to this, shopkeepers in these areas are a worried lot. “We will lose our source of livelihood if we close our shops. Why the government is not thinking about us?” complains Hemant Sharma, a property dealer who had his shop in DLF Phase I that was sealed last week.

The sealing drive of Gurgaon property began in the month of October after the Punjab and Haryana Government issued orders in September to seal all commercial establishments running from residential premises.

Officials carrying out the drive are facing stiff protest from shopkeepers in several places and say that fast and smooth sealing process is possible only when the crowds will be cordoned off. This is why they are now accompanied by police personnel for their security.

Signature Group to Launch Real Estate Funds

Dubai-based asset management firm, Signature Group, has announced to launch two real estate funds total over $650 million which would be listed on the Dubai International Financial Exchange (DIFX) in the first quarter of 2007. The money will be used to finance development projects in UAE and India.

Company authorities are currently holding talks regarding negotiating distribution agreements in the Gulf region and other parts of the world, says Rafat Rivzi, board director of Signature Group.

This prominent conglomerate is working hard to finalize several fund structures including development and rental closed and real estate funds for the Middle East and India. Most potential investors from the countries like Korea, Japan, Australia, and Singapore have shown their interest in investing.

Although, demand for Islamic funds is shooting up but still lacks to grab the attention of places like Europe, added Rivzi.

Gulf investors bullish on investing in Indian Real estate

Indian real estate has firmed its niche in the world business space encouraging global players to take a fresh view on fast flourishing India as a business and investment destination. Now, it has been succeeded in attracting Gulf investors by offering the prospects of lucrative returns, tax structuring benefits and increased security being real asset.

The Gulf companies that so far have shown inclination to add Indian property as an asset class to their investment portfolio include the names like Global Asia Real Estate, Dubai Properties, the Signature Group, the Palmon group.

Global Asia Real Estate Fund has recently closed a $75 million fund with an aim to use the fund in booming real estate market of India and China. This Shari’s compliant fund is also likely to focus on distressed assets in the same sector.

Likewise, the UAE based Palmon Group is bullish on investing in red hot Indian real estate. The conglomerate has recently made an investment of Rs. 39 crore in Mumbai’s BSEL tech park.

BSEL Infrastructure has bagged a contract worth Rs. 546 crore for constructing shopping malls in Nagpur. The company is also scheduled to take up the development work in major states like Maharashtra and Gujarat.

Dubai based asset management firm Signature Group will close to launching several real estate funds for investment in the UAE and India. The funds will be launched on the Dubai International Financial Exchange in 2007.

A few Gulf companies like Dubai Properties are holding wide ranging talks with several people for projects in India but have not yet finalized anything, as learnt from the sources.

Real Estate Prices Rise in Tier II and Tier III Cities

As property prices in metros see a shoot up, Tier I and Tier II cities have emerged as the most promising market for residential as well as retail developments. Now, these places experience a sharp increase in property prices which has gone along with increased demand. It has shot up by as much as 40% in the past two years which is believed to be the highest as compared to earlier hike descriptions.

The property boom in Tier II and Tier III cities is further fuelled by the factors like opening up of financial sector, rationalization of income tax and loan policies in addition with well-paid IT jobs. However, the rise in prices does not square with the earning capabilities and is being considered as an unhealthy sign in the long run.

The property market is not going to see a slide in price in the near future, says data showcased by various property surveys.

Tier II cities including Jaipur, Kochi, Pune, Nagpur, and Chandigarh have become common hunting ground for ITes companies, reveals a study conducted by recent Nasscom-KPMG.

Recently, in cities like Meerut and Jaipur, pre-launch projects are being sold in between Rs. 2,400 and 4,500 per square yard as compared to Ambala, where it starts at Rs 3,000 per square yard.

Nowadays, a person interested to purchase a flat in developing cities like Gurgaon and Ahmedabad needs to spend out about four times the money it had been few years ago. The cost of a BHK flat in Ahmedabad has risen to Rs 31 lakh whereas it used to be Rs 8.5 lakh two years ago. The difference itself speaks for the changing trends.

The value of land in the areas like Nagpur, Nasik, Ludhiana, and Punjab will rise manifold in the coming days. Ahmedabad, that is, tier II city is soon going to be regarded as fast flourishing metro. As for the development in Gujarat, it is not city-centric, but spreads across the state. Therefore, there is more room for development in the state.

Indian Government gives green signal to FDI Proposals

The government on Thursday gave a nod to the FDI proposals worth Rs. 4,853 crore, a major portion of which (Rs, 4,080 crore) has been allocated for the use in real estate sector.  It is certainly a merry time for both the NRIs and foreign investors who have been eyeing Indian real estate for long.

Finance Minister P. Chidambaram has approved the two sets of investments by a clutch of overseas investors to invest in commercial as well as residential property, IT parks, and special economic zones.

Urban Infrastructure Ventures Capital Ltd. will provide the first set if investments with an initial investment capital of Rs. 2,484 crore. The company will work as a venture capital fund for the sector thereby providing funds to the companies looking out for investing in the red hot property market in India.

Many foreign construction companies and investors are all set with their collective investment of over Rs. 30,000 crore to park in Indian real estate sector. Mr. Chidambaram has also given his consent regarding set up of a fund called Peninsula Realty Fund (PRF), with an amount of over Rs. 1,596 crore which will be utilized to finance construction projects.

At present, two different schemes A & B have been created by the PRF. Various real estate projects entertaining the interest of domestic investors will fall under the scheme A. Contrary to this, the scheme B will deal with investments in projects that are compliant with FDI related policies of the government.

PRF is launched by Peninsula Land Ltd. which has been looking out for large acreage projects all over India to fund its expansion. The company is also believed to be working on its expansion mode into SEZs and tech parks in Goa and Pune.

Bangalore Prepares to Get a Major Facelift with 5 Satellite Townships

If the Karnataka Government gets its planning right, then Bangalore is all set to witness a massive phase of development with a cluster if five privately built satellite townships spread over a total of 60,691 acres around this cyber city known as Silicon Valley of India.

The intent of the new regime in the Bangalore to develop Satellite Township is seeing majority of bidders jostling hard to grab the project which is to be created on 9684 acres of private land, in Ramanagaram constituency. Indeed, the list also includes the names of major construction consortiums such as Shanghai Urban Construction Corporation and Singapore based Jurong Construction Company.

Karnataka Chief Minister H D Kumaraswamy is personally pitching for the calculated amount of 30,000-crore townships project.

The project draws its inspiration from the countries like China, Singapore, and the US. On completion, it would enjoy the status of being one of the biggest township projects in the country. It is all more unique as it promises to make life easy for the residents by offering a host of amenities minus the congestion, traffic, in a serene atmosphere, explains planning official at the state urban development department.

However, a local farmers’ protection group is raising protest banner against the project, arguing that the land acquisition for the first township at Biddai located around 39 km from Bangalore, will kill the livelihood of around 25,000 farmers.

This community oversees it a futile attempt to progress development of the city at the cost of the local farmers who have no other source of income. H T Lingappa, president of the Sri Ranganatha Raitha Hitarakshana Sangha, a forum of farmers, claims that land being acquired includes traditional belts of coconut, mango, sugarcane and vegetables.

According to BMRDA officials, no member of the farmer community will be persuaded to shift beyond the township and get enough compensation by the Karnataka government as well. They will be integrated into the main stream of economic activities in the coming township.

Genpact to Develop SEZs in fast developing cities

BPO giant Genpact has announced its plans to spread its wings to the fast developing cities of Bhopal, Bhubaneshwar, and Jaipur with set-up of three special economic zones (SEZs). It has already been succeeded to get a nod from the ministry of commerce in these cities. The talks are in the final stage of negotiations with the three state governments.

Formerly called Gecis Global, Genpact has signed a lease and is all set to construct a 1 million (10 lakh) square feet facility on a 12-acre plot within the IT SEZ being developed by DLF in Silokhera, Gurgaon (Haryana).

The company has seen an unparallel growth over the past few years. Excelling to such great heights is what has encouraged this pioneering BPO to plan ahead and partner with state governments to develop the larger Indian BPO/ITES sector. Also, such a new array of facilities will also provide enormous career opportunities to the youth in these states, say Pramod Basin, president & CEO of Genpact.

Genpact is the largest BPO in India with 19,500 employees. And, the company has already started to hunt for top talents to handle its expanding operations in BPO sectors as well as offer its existing staff the option to take a transfer to these facilities.

Japan to Construct Delhi-Mumbai industrial corridor

Apart from sharing a global vision of peace and stability, India and Japan are now marking a new eon of economic prosperity, a milestone of which is the success of Delhi Metro Project.

Business relationships between these two great countries are all set to get more strengthened with development of a Delhi-Mumbai industrial corridor which will symbolize the new vivacity in economic relationships between Asia’s chief economies.

The first round of the meeting regarding signing an economic partnership agreement (EPA) will be held soon. The EPA would include discussion on different issues like trade in goods and services, investment promotion, and intellectual property rights.

This ambitious project will come along the Delhi-Mumbai multi-modal freight route and will provide an array of amenities including power facilities, rail connectivity to ports en route and development of ports on western coast of India.

There is plan to develop a multitude of industrial estates and clusters with top of the line infrastructure along the corridor to grab the attention of more and more potential foreign investors which, in turn, will give a fillip to the economic development of the country.

A task force under Japan’s vice-minister in the ministry of economy, trade and industry and the secretary of India’s department of industrial policy and promotion will shed light on eloquent details regarding the project.

Indian Commerce Minister, Kamal Nath held talks with Japanese Minister of Economy, Trade and Industry, Akira Amari. Both the reverend ministers took up the discussions to increase trade and investment flows between the two countries and covered the ongoing multilateral trade talks at the World Trade Organization.

In addition, Japan is showing good interest to share its own growth experience with India and may soon start with the development of Phase-II of Delhi Metro.

Numbers of Japanese companies are keen to pump in money in India, says Mr. Nath. However, he oversees infrastructure issues in India to be a major constraint to attract more Japanese investment.