Latest Property News on 'Real Estate Companies'

Khaitan IAS man to Head Delhi Real Estate Practice

Khaitan & Co has hired ex-bureaucrat and lawyer Dr PK Agrawal as partner to head its real estate practice in Delhi. This is Agrawal’s first assignment at a law firm, which he has now taken up after retirement.

Agrawal said: “As an IAS officer, I was dealing with a lot of court cases, especially in revenue matters and land laws - there were lakhs of cases since it’s a big litigation area. In fact, I was already doing a half-lawyer’s job and I am happy that [in Khaitan] I’ll be doing a full lawyer’s job. Read More »

Demand Boost may Pick up Realty prices

Home prices may remain firm or inch up slightly in metros such as Delhi and Mumbai and their suburbs despite an expected rise in interest rates as demand picks up once again on the back of renewed activity on the employment front, bankers and realty players that ET spoke to said. However, they felt that prices at extended suburbs — such as Greater Noida and Manesar near Delhi and Navi Mumbai, along with tier-II and tier-III townships — will remain under pressure due to over supply of housing, lack of connectivity and paucity of jobs in such locations.

The residential demand is not just the function of the interest rate, said Keki Mistry, vice-chairman and managing director of HDFC, the largest home-loan player in the country. “The demand is primarily driven by job creation and job confidence. When any individual buys a home, he or she enters into a long-term payment obligation. Therefore, buyers need to have confidence of retaining their jobs,” he said. The late-2008 and early-2009 realty crash was largely thanks to the fear of impending job loss in light of the financial slowdown, Mr Mistry said. “Given the robust industrial growth rate, it is apparent that jobs will be created and there would not be any scepticism on protecting jobs. This in turn would continue to fuel demand for homes,” he said. Read More »

30% Decline in DLF’s Net Profit

Despite a substantial jump in revenue, India’s largest real estate company DLF posted a 30% decline in net profit to Rs 468 crore for the quarter ended December 31, 2009, compared to Rs 671 crore from a year-ago period. This is primarily due to substantial increase in interest outgo to Rs 257 crore in the third quarter of the current fiscal as against Rs 94 crore in the corresponding period in 2008-09.

Even tax provisioning has increased to Rs 168 crore in the quarter ended December 2009 from Rs 106 crore in the same period last year. But consolidated revenues of the company rose 43% to Rs 2,152 crore in the quarter ended December 2009 from Rs 1,503 crore in the corresponding period a year-ago. Going forward, DLF targets to become a zero-debt company in medium term. Currently, its debt stands at around Rs 12,500 crore. Read More »

Crisil Rates DLF “A+”

Rating agency Crisil has revised its outlook on the long-term debt and bank facilities of the country’s largest real estate company, DLF Ltd, to ‘stable’ from ‘negative’ with a rating of ‘A+’. The revision reflects Crisil’s expectation that the strain on the operating cash flows of DLF will reduce over the medium-term, as the real estate sector is on the path of recovery. The positive rating has come as a shot in the arm for DLF, whose chairman KP Singh has been awarded Padma Bhushan this year for his contribution to the real estate industry.

According to Crisil’s guidance, DLF’s operating cash flows are expected to increase over the medium-term. DLF’s sales in the second half of 2009-10 are expected to be better than the figures in the first half, although annual sales for the current year are expected to be lower than that in the previous year, Crisil has projected. Singh had earlier said, “During the last few months, DLF converted short-term debt into long-term debt, mainly by securitising cash flows. To reduce debt, it has initiated a portfolio review wherein it is looking to exit the non-strategic businesses.” The move seems to have worked as is reflected in the upgrade in ratings. Read More »

Sobha Developers calls off land sale talks with Shriram Properties

Sobha Developers, which was in talks with Shriram Properties for the sale of around 400 acres in four cities, is learnt to have called off its negotiations following differences over price. While Sobha confirmed that talks have been called off, it did not provide details. Some of the land the firm had put up for sale include 100 acre at Hinjewadi in Pune, 3.8 acres on St Marks Road, Bangalore, 7 acres of NBCC land behind the Bangalore railway station, 330 acres comprising two islands of Valanthakad & Nadukeri and adjoining lands in Manakunnam & Thekumbaghom villages in Kochi. The total value of these land could be between Rs 600 and 800 crore, according to estimates by Mumbai-based research firm Enam Securities.

The latest move by Sobha Developers comes after it managed to strike a deal with an investment fund owned by Infosys co-founder N S Raghavan to raise Rs 225 crore by selling a part of its land bank. The company has also managed to reschedule a substantial part of its loan portfolio. Last year, Sobha raised around Rs 530 crore by diluting close to 22.5% equity through a qualified institutional placement (QIP). Sobha MD J C Sharma had earlier told ET that the company was looking at a stake dilution of up to 25% at the project level through a special purpose vehicle. While the deal would have generated the much-needed cash for Sobha to develop its projects, it would have also helped Shriram Properties, a part of the $5.5-billion Chennai-based Shriram group, scale up its size in the residential market. In fact, Murli of Shriram Properties had earlier said that the firm was in talks to buy 1,500 acres of distressed assets which could be land with development rights, projects under development or mid-sized real estate company. Read More »

India 3rd Most Popular Real Estate Destination among Emerging Countries

According to survey conducted by Association of Foreign Investors in Real Estate (AFIRE), India is 3rd behind China and Brazil to attract foreign investment in real estate. China is heads and shoulders above the others as the preferred country for Foreign investment in real estate – Infact China is the only country where more Foreign Investors showed interest in buying real estate in 2010 as compared to 2009. All other countries in top 5 on the contrary have showed a steep decline.

In 2009, more than 18% Foreign investors showed interest in India’s real Estate, while this year the figure dropped to close to 11%. The other countries which show sharp decrease in interest in real estate acquisitions are Brazil, Mexico, Turkey and Russia.

Builder Unveils Chennai’s Costliest Apartment Project

A city-based builder is all set to promote Chennai’s costliest apartment project, where each flat will be priced at Rs 8 crore and have a foyer studded with diamonds, precious stones and pearls. Christened ‘The Art’, the project derives its theme from the cubist paintings of the legendary Pablo Picasso. A limited-edition super luxury residential complex, it is being promoted by Vijay Shanthi Builders on Kothari Road in Nungambakkam.

The previous record for the most expensive residential apartment in the city was one promoted by Kgeyes developers in the posh Poes Garden at Rs 7.46 crore per unit in 2007. PepsiCo CEO Indira Nooyi had bought one of the four flats in the project, located in the area where AIADMK leader Jayalalithaa and actor Rajnikanth live. The latest project has an opulent style, unusual even by the standards of high-end apartments. The marble floor of the foyer in every flat will be engraved with a peacock, studded with precious stones. Suresh Kumar, MD of Vijay Shanthi group, told TOI, “Our aim is to create homes that are unique, luxurious and provide value for money. It is meant only for those who want to make a statement of luxury in impeccable style.” Read More »

DDA Turns Down DLF’s Request to Refund Rs 900 Cr

The Delhi Development Authority has turned down a request by DLF to refund Rs 900 crore the real estate major paid when it was awarded the bid for the Dwarka Convention Centre, near IGI Airport, in 2007. DLF was the sole bidder for the project, then estimated to cost Rs 3,000 crore. The convention centre was to be ready before the Commonwealth Games this October. Soon after it was awarded the contract, DLF requested DDA to allow it to attract foreign funding for the project by creating a special purpose vehicle. But the land agency turned down the request after consulting various experts, including the Solicitor General of India. The real estate firm indicated last year that it wanted to pull out of the project.

“We received a request for a refund a few months ago,” a senior DDA official told Newsline. “As far as we are concerned, the question of a refund does not arise — as per our agreement with DLF, they will have to execute the project.” Rajeev Talwar, a spokesperson for DLF, said: “We submitted a request for a refund and we are still waiting for a response. We are not going ahead with the project at present.” With the economic slowdown last year, DLF had drawn up a monetisation plan that included selling a few assets and the refund of the Rs 900-crore it had paid DDA. Read More »

Over 50% Drop in Unitech’s Consolidated Net Profit in Q2

Real estate company Unitech Ltd on Saturday posted an over 50 per cent drop in its consolidated net profit for the second quarter ended September 2009 to about Rs 178 crore, as property market downturn hurt sales realisations on a year-on-year basis. The net profit stood at Rs 358.9 crore in the year ago period. The income from operations almost halved to Rs 509.49 crore in the second quarter, from Rs 985.2 crore in the same period previous year. Sequentially, however, the company fared better. The net profit during the quarter was 12.73 per cent higher over quarter ended June 2009.

The Unitech Managing Director, Mr Sanjay Chandra, said that sequential growth in performance was heartening and that it hoped to maintain the momentum going forward. During the quarter, the company launched UniHomes – houses in the price range of Rs 10-25 lakh across six cities. “Encouraged by the strong response, the company plans to offer similar product in other cities. While the momentum in residential sales is continuing, there have been positive developments on leasing of IT space as well in the recent weeks,” he said. Read More »

RE/MAX All Set to Commence Operations in Gujarat

After Jones Lang LaSalle and Cushman & Wakefield, another US based real estate organisation is now making inroads in Gujarat. RE/MAX India, a division of US-based RE/MAX International Property Group, is all set to commence its operations in Gujarat next month. The Delhi-headquartered real estate brokerage franchising company is currently identifying companies interested in buying broker-office franchises to operate throughout Gujarat.

According to Manan Choksi, regional franchisee owner in Gujarat, “The market for real estate broking services is currently fragmented and unorganised in the state. As there is a lot of migration in to the state, coupled with investments, we expect a compound annual growth rate (CAGR) of 20 per cent in the next 5 years. Besides, we expect to conquer 25 per cent of the brokerage transactions in Gujarat. We wish to employ the top 15 per cent of brokers in the state who are most productive. This will ensure the desired market share as we believe in ‘outstanding agents, outstanding results. Eventually, over a period of 10 years, we expect a 35 per cent market presence in Gujarat.” Read More »