Indian Property News on 'April, 2008'

Blackstone Makes First Indian Real Estate Acquisition

Blackstone Group LP’s property unit has made its first purchase in the Indian real estate market by paying $18 million for a minority stake in Synergy Property Development Services.

Blackstone’s property unit is buying the stake in the Bangalore-based property management and construction company, the newspaper reported. Blackstone was one of the most active private equity firms in India last year, concluding five deals valued at about $800 million. Read More »

Super luxury apartment complex planned in Kochi

Dewa Projects Private Ltd., a venture promoted by a group of NRIs based in Kuwait, will build a super luxury apartment complex on Marine Drive in Kochi. K. Venugoplan Nair, chairman of the company, said the project would set new benchmarks for residential property.

The apartments will have a 10-year warranty. Kitchen, bathroom fittings, doors and other fittings would be provided by top companies in Germany, Italy, Australia and Canada. The complex will have six towers comprising 400 apartments surrounded by four acres of landscaped garden. It will have a quake-resistant structure. The price of a three-bedroom apartment will be more than Rs.3 crore. Read More »

Delhi hot favorite retail destination in India

With the Indian retail industry poised to become a $637 billion sector by 2015, the capital city is emerging as the largest consumer market in the country consisting of a booming middle class. Delhi has the highest concentration of households with an annual income of $110,000 and per capita income more than double the national average.

“Delhi is a destination for shopping across India besides its own consumption appetite. It is the principal business and commercial centre in northern India, well complemented by industrial areas in the National Capital Region,” Minister of State for Industry Ashwani Kumar said at a symposium organized by the Confederation of Indian Industry (CII) here. Being the biggest consumption zone in northern India, Delhi has also emerged as a distinguished centre for trade, he said. Read More »

A New Reality For Realty Mutual Funds

At last, the decks have been cleared for the launch of Real Estate Mutual Funds (REMFs) in India, with the Securities and Exchange Board of India (SEBI) notifying amended regulations for such products last week. For mutual fund investors, this may mean a welcome relief from the stream of new equity fund offerings, playing on every imaginable theme, that have clamored for attention over the past three years. But don’t hope for this to happen too soon!

It may be some time before fund houses queue up to offer REMFs with the same enthusiasm that they now display for equity funds. Though SEBI’s recent notification clarifies some of the grey areas in REMF regulations relating to valuation and disclosures, getting such products off the ground may prove to be quite a challenging exercise for the existing fund houses. Read More »

Madurai Real Estate Hots up

Famous for its temples, Madurai has always been on tourists’ radar and gets a steady flow of visitors round the year. But that’s not the only claim to fame for the second largest city in Tamil Nadu. The IT boom has touched this temple town too, with Honeywell’s Research Lab (tied to the Thiagarajar Engineering College) and the TCS Disaster Recovery Centre being instrumental in IT development.

Spread over an area of 130 sq km, Madurai has a population of approximately 1.3 million. Domestic flights connect the city to state capital Chennai, Bangalore and Hyderabad. International connectivity from Madurai airport, located 13 km from the city centre, is also expected to begin this year. In fact, according to a Cushman & Wakefield (C&W) report, real estate development is increasingly moving to the southern and western parts of the city, mainly around the airport, Rirupparankundram Road and By-pass road. This is due to a scarcity of land in the CBD (Chinnakadai). Read More »

60 Acres may be freed up for Real Estate Development in Bandra

With Mumbai grappling for additional land for expansion, the city’s western suburb Bandra could see availability of close to 60 acres of real estate for development. The residents of the Maharashtra government’s employee staff quarters have suggested that government redevelop the colony spread across 96 acres. The residents association has suggested the government to redevelop the land on the build operate and transfer basis.

According to the proposed plan, the redevelopment project is expected to cost Rs 1,686 crore with estimated revenue of Rs 1,899 crore. It also makes provision for construction of government offices for the suburbs. The Maharashtra government constructed the colony in 1958-60 on a reclaimed land. Madhukar Vichare, advisor, Government Quarters Residence Association, said, the relocating of existing staff in the multi-storey buildings will require 25-30 acres of land while the government can exploit the rest for further development. Read More »

Mahindra’s Jaipur SEZ to become partly operational from July

The Special Economic Zone being developed by Mahindra’s at Jaipur will become partly operational in July with first group of clients moving in, a top official said on Friday. Mahindra Lifespace Developers, the real estate and infrastructure development arm of the USD 6 billion Mahindra group, has also started buying land at Karla, near Pune, for an SEZ project, Arun Nanda, vice-chairman of the company told reporters while releasing financial results here today.

The company has managed to get a premium of 20 to 40 per cent over the current market rate for some of its residential projects in Mumbai and Faridabad, he said. The company has an estimated land bank of 35 million sq ft across the country and expanding to new places like Nashik and Nagpur, he said. Read More »

Double Whammy for High-End Luxury Realty Market

THE high-end luxury real estate market is facing a double whammy. The demand from domestic buyers has already dried down and now even non-resident Indians (NRIs), who constituted a significant market for luxury real estate developers, are developing cold feet. “With the US property market witnessing a correction due to subprime crisis, the NRIs are expecting the same to happen in India and are holding back on their purchases,” says Delhi based real estate firm Omaxe CMD Rohtas Goel, who recently launched a luxury project in the National Capital Region (NCR).

Three-four years ago, there were only a few big developers into the game of building luxury homes. But the higher margin in the business prompted many others to join.“The developers entered the luxury segment without a proper assessment of the market. Now they are faced with a major supply-demand mismatch. In Punjab, Delhi NCR and Mumbai suburbs, the supply far outstrips demand,” says real estate consultancy firm Jones Lang LaSalle Meghraj India chairman Anuj Puri, adding that the exit of speculators and investors has impacted these markets, where the supply exceeds demand by 25-35%. Read More »

23 big firms eye Thatipur realty project in Gwalior

As many as 23 big real estate firms are eyeing the Thatipur project in Gwalior, Madhya Pradesh. Reliance, DLF, Parsvnath and Gammon are in the fray to bid for the mega project, of which the bid submission will end on May 7. The MP government has not set a reserve price for the project. The bidders have been asked to quote speculative prices. The state government has roped in India Infrastructure Initiative Facility of IDFC and Feedback Ventures as project advisors for selecting the developer of the project.

After the bidding is over for the Central Business District project in the prime business locality of New Market in Bhopal, Thatipur will attract mega investment under the “re-densification scheme”. Unlike the Bhopal project, which fetched Rs 338 crore from Gammon India for infrastructure development on 15 acres for a lease period of 30 years, the winning bidder will be awarded the Thatipur project on 95 years’ lease and will be asked to develop residential and commercial complexes on 50 acres in an integrated manner. Read More »

Commercial Development of Vacant Railway Land

The Ministry of Railways have set up Rail Land Development Authority (RLDA) by an amendment to Railways Act, 1989 (Amendment No. 47 of 2005) for commercial development of vacant railway land for generating revenue. So far 115 sites, covering a total area of 1139 hectares (approx) have been entrusted to the Authority for commercial development at different places. In addition, 26 stations located in metropolitan cities and important centers have been identified for redevelopment as world class stations through Public Private Participation (PPP) by leveraging the real-estate potential of the land around and the air space above the stations.

As per current thinking Railway land is to be given to developers for commercial development through transparent bidding process on long term lease basis for development work without any budgetary resources. The work of redevelopment of identified 26 stations into World Class Stations are planned to be undertaken through PPP basis. Read More »