Latest Property News on 'Real Estate India'

India to Unveil Single FDI Policy for Financial, Banking Sectors

India will unveil a single policy for foreign direct investment, including in sectors such as financial services, insurance and banking by March 31, Commerce and Industry Minister Anand Sharma has disclosed. After 3 days of discussions with senior administration officials, Sharma acknowledged that “it’s true that we were slow off the block when we started the process of economic reforms and liberalization,” but asserted in the past few years, “it would be appreciated that India has moved much faster.”

“India works on a very small negative list and the FDI which comes into India - the majority of the sectors - are in the automatic route,” he said. Sharma argued that for all of the criticism and whining, “When you look at the pace at which some of these sectors - financial services, insurance and banking - have been opened, then India has done far better than many of the countries, including in Europe and here, in these sectors.” He pointed out that “you have more US bank branches in India. You have more British bank branches in India, or for what matter, of the other countries, and there are partnerships of the major insurance companies with the premier insurance companies in India.” Read More »

Unitech to Focus on Real Estate-Looking to De-merge Non-Core Business

Unitech Ltd, the second-largest real estate developer in the country, is looking to de-merge its non-core businesses in order to focus only on real estate, a source familiar with the development said. The company’s non-realty businesses include construction, special economic zones (SEZs), power, telecom and hotels. The company plans to unlock value through private equity investment or outright sale, the source said.Details such as valuation or the interested companies could not be ascertained immediately and a Unitech spokesperson declined to comment.

The New Delhi-based developer has been trying to sell its telecom tower-making business, based near Nagpur in Maharashtra, for about Rs 700 crore as part of the de-merging plan. This arm initially operated through a tie-up with Hyundai. Unitech acquired Hyundai’s stake some years back. Unitech has also been planning to sell its non-core assets like hotels, commercial properties and land plots. Read More »

Banks Seek Clarification from RBI on New Interest Rate System

Commercial banks are concerned over the Reserve Bank’s new interest rate system under which lending rates are to be linked to a base rate. They are seeking clarifications in an attempt to de-link home loans from the plan. This is because the expected base rate of around 8.5 to 9.5 per cent could lead to home loans being offered at 10 per cent or more. At present, home loans are available at 8.5 per cent for start-up customers at “teaser” rates offered by some banks.

Bankers say home loan rates must be kept at affordable levels for consumers. “Though most concerns over the implementation of the new system have been addressed by the Reserve Bank of India, certain more clarifications are awaited,” the chairman of a public sector bank told Hindustan Times. Bankers say “teaser” rates to lure customers should be discontinued, but add that lending rates cannot be unreasonable either. “Affordable housing is an important issue and we are yet to get clarification from the central bank if home loans would also be linked to the base rate,” said M S Sundara Rajan, chairman and managing director, Indian Bank. Read More »

SBI is the Biggest Player in the Home Loan Sector

With the teaser rate tenure coming to an end, it is time to gather the market share earned by the different players during the reign. Of the total amount of Rs. 45000 crore lent as cheap loan, SBI seems to have gathered the biggest chunk of the pie by sanctioning a colossal 67% of the total loan amount offered during 2009. The trump card used by the banking sector this year has been the teaser home loan rates. SBI has lent a prodigious amount of Rs. 30,000 crore this year as a part of the teaser loan regime. HDFC has secured a distant second position with a total sanction of Rs. 9,000 to Rs. 9,600 crore under the home loan segment.

Teaser loans from other banks however did not receive such good response. While Bank of India could sanction only Rs. 289 crore in a time frame of seven months, Punjab National Bank, IDBI Bank and Union Bank disbursed nearly Rs. 1,050 crore, Rs. 1,500 crore and Rs. 1,600 crore respectively over a time span of six months. Many banks had stopped the teaser rate regime after the RBI announced a hike in the cash reserve ratio by 75 basis points. Despite the varied response received by various banks on sanctions, all banks seem to be happy by the results of teaser rates. Manju Srivatsa, President - Retail Banking, Axis Bank, says, “From what we had been doing before we launched fixed rate scheme, we were able to do 40% more sanctions and 35% more number of loans which is a good number.”

Tranport Corp Approves Demerger of its Real Estate & Warehousing Undertaking

Logistics company Transport Corporation of India Ltd India’s on Wednesday announced that its board has approved the demerger of its real estate & warehousing undertaking into a new company namely TCI Developers Limited (TDL).

The demerged entity would have properties and investments with a book value of Rs50 crore, the company said in an emailed press statement. The company presently has real estate properties in metropolitan and tier two cities including Delhi, Chennai, Pune, Nagpur, Bangalore, Ahmedabad among others. Read More »

Mumbai Builders Focusing on Luxury Flats Targeting NRI Customers

Mumbai developers seem to have given up on housing for the middle-class. If you thought the realty revival in the city would come through middle-level affordable housing, you cannot be more off the mark. Most new launches are looking at the Rs1-crore residential houses project.

Take Kalpataru developers — it is building a 750-unit project — Kalpataru Aura — in Ghatkopar. The project launched a couple of months ago has properties in the price range of Rsl.25 crore to Rsl.50 crore. Its Malad project, Kalpataru Pinnacle, will have 80 exclusive apartments, each priced at around Rs3 crore. Lodha Developers has launched a 42-storey apartment building, Lodha Imperia, at Bhandup, with flat prices inching towards the Rs1-crore mark. The target audience of these builders is apparently NRIs from Europe and the US. Read More »

Big developers Partner with Local Developers to Complete Projects Quickly

Hyderabad-based PBEL Property Development (India) Ltd has a new strategy to break into unfamiliar markets: partner with local developers to complete projects quickly. The realty firm wants to divide its 42 acres on Old Mahabalipuram Road off Chennai into four or five portions, each of which will be handed over to local developers for building residential apartments. “We don’t know much about the Chennai market and think it’s a good idea to bring in people who have the knowledge,” said Anand Reddy, director of PBEL Property, which has a project pipeline mostly in southern India. “Of course, we will keep a portion of the land which we’ll develop ourselves.”

A number of large developers are similarly forming joint ventures (JVs) or special purpose vehicles with smaller, local developers for specific projects on a revenue-sharing model. “We will see more developers getting into such JVs depending on what the local partner brings to the table,” said a senior research analyst at First Global Securities Ltd, who didn’t want to be named. “It could be land, local domain knowledge or even good building capacity.” Mumbai-based developer Sunil Mantri Realty Ltd, for instance, prefers local partners with the potential to speed up projects by procuring building approvals and helping in the conversion of land status quickly—often, the most time-consuming aspects of development. Read More »

Mahindra Lifespace to Set up Business Parks in Chennai and Pune

Mahindra Lifespaces Developers Ltd is in the process of acquiring around 4,000 acres in Chennai and Pune, where it intends to set up two more business parks, a top official said late on Monday. The company is acquiring around 1,000 acres of land in Chennai and around 3,000 acres in Pune, its Managing Director and Chief Executive, Anita Arjundas, told Reuters in an interview. Arjundas declined to comment on the cost for land acquisition. The firm, part of the diversified Mahindra Group, specialises in both the residential housing and commercial development segments. A business park is a township with office spaces.

It already has two business parks of about 4,000 acres under its commercial segment. The parks are operated under the brand Mahindra World City’, at Chennai and Jaipur. “Land procurement is underway, so once we are done with a significant part of it, we will start development,” she said. She did not provide a timeframe for completion of the business parks. Mahindra Lifespace is also looking to tap the recovering residential housing market by launching new projects in two tier-1 cities, she said, but did not elaborate. It focuses on the mid market and premium residential customer segments. Read More »

Gurgaon Mumbai Emerge as Top Residential Destinations

Gurgaon and Mumbai have emerged as the top destinations for residential investment in the country. Both have seen a massive infusion of commercial and retail space owing to residential demand, which in turn was spurred by a growth in employment opportunities, according to the fourth quarter Asia Pacific Property Digest by global real estate consultant Jones Lang LaSelle. The residential market in both the regions witnessed a price correction of 25-30% from their peak values which presented opportunities to end-users and investors alike.

Despite being hit hard by the recent turmoil, the residential sector of the crisis-torn Indian real estate industry has emerged as the sole bright spot for individual investors, the digest ranked Noida, Pune, Bangalore, Chennai, Hyderabad and Kolkata behind Gurgaon and Mumbai. The six cities, which are witnessing an influx of IT/ ITeS employees, also provide residential units at affordable prices. However, infrastructure continues to remain a concern across most of these cities as it is unable to keep pace with the growth in population. With the exception of Bangalore, oversupply will be a concern in the short term due to large number of projects launched over the past 3-4 quarters. Read More »

Assocham Asks Govt to Withdraw Service Tax on Real Estate Sector

Industry body Assocham has asked the government to roll back the service tax proposed on real estate developers at the time of construction, as it would increase the tax burden on home buyers and impact the recovery of the sector. The government, in the Budget, said that real estate complexes will attract service tax, unless the entire consideration for the property is paid after the construction is complete.

In its post Budget memorandum to the Finance Ministry, Assocham had said that the real estate sector was gradually returning to normalcy and imposition of service tax on immovable property would increase the cost of housing by four per cent. “In addition, it would also make the entire housing facility costlier to end-consumer and will be contrary to government’s aim of providing affordable housing,” it said.