Latest Real Estate News on 'Delhi'

Ambience to invest Rs 1,950 cr on two new housing projects

Comments Off on Ambience to invest Rs 1,950 cr on two new housing projects   |  November 11, 2014

NEW DELHI: Realty firm Ambience today said it will invest about Rs 1,950 crore over the next four years to develop two luxury housing projects in Gurgaon and Noida.

The Delhi-based company will develop over 1,030 apartments in these two projects launched today.

Ambience has presence in Delhi and Gurgaon property markets. It is developing a 150-acre project ‘Ambience Island’ in Gurgaon that comprises premium homes, ‘Leela Ambience’ hotel with over 400 keys and a huge shopping mall.

In Delhi, it has a ‘Kempinski Ambience’ hotel comprising 480 keys and a shopping mall at Vasant Kunj.

“We are coming up two new projects in Noida and Gurgaon. We are entering into the Noida market for the first time,” Ambience group Chairman Raj Singh Gehlot told reporters here.

Asked about the investment, he said the project cost for both Noida and Gurgaon residential complexes would be about Rs 1,950 crore and would be financed through internal accruals, and loans from banks and HDFC Ltd.

That apart, Gehlot said: “In 2010-11, we had raised Rs 170 crore in form of equity in Gurgaon project from private equity firm Indiareit.” However, he did not disclose the stake divested in the Gurgaon project.

Ambience Group had planned Rs 1,300 crore initial public offer (IPO) in 2010-11 but had to shelve the plan because of bad market conditions.

Asked whether the company would revive IPO, Gehlot said “there is no such plan at this moment”.

Elaborating on the project, Ambience Director Aman Gehlot said the company will build 280 flats in the 3.5 acre Noida project ‘Ambience Tiverton’ at a cost of Rs 465 crore.

In Gurgaon, he said over 750 flats would be constructed on 14.5 acre project ‘Ambience Creacions’ at Rs 1,480 crore cost.

Ambience has fixed the selling price in both projects at Rs 9,000 per sq ft. The cost of the flats would be in the range of Rs 2 crore to Rs 4.5 crore.

The construction work on both the projects have started and the completion is expected in four years.

At present, Ambience group has about 1,000 acres of land bank, including 350 acre in Panipat where the company plans to develop a township.

Source: ET

Real-estate firm asked to pay over Rs 11 lakhs for deficiency of service

Comments Off on Real-estate firm asked to pay over Rs 11 lakhs for deficiency of service   |  November 6, 2014

NEW DELHI: The Delhi state consumer panel has asked real estate firm Omaxe Buildhome Pvt Ltd to pay over Rs 11 lakh to a retired Indian Airlines official after holding the realty firm of “deficiency of service” in the allotment of a flat at Greater Noida in Uttar Pradesh.

The Delhi State Consumer Disputes Redressal Commission (SCDRC), presided by judicial member S A Siddiqui, asked the firm to pay Rs 11.14 lakh to Secunderabad resident Pradeep Chaudhary.

Chaudhary had approached the Commission alleging “unfair trade practice” and “deficiency of service” on the firm’s part and said that despite his strong opposition, the company, on its own, changed the location of the flat booked by him.

He had further alleged that the firm first asked him to take the flat in other Tower and on being refused to accept, it later illegally forfeited the deposited money after canceling the allotment.

The panel, in its order, said that in case of cancellation of the allotment, the firm should have returned the balance amount after deducting the forfeited money. However, it failed to do so and it amounted to “deficiency of service”.

“We are of the firm view that complainant (Chaudhary) was entitled to refund of the amount deposited,” it said.

The Commission, however, said that Chaudhary had defaulted in payments and hence, the firm was entitled to forfeit a sum of Rs 6.56 lakh.
“The complainant has also been subjected to a lot of harassment inconvenience mental pain and agony and therefore in our considered view he is further entitled to get Rs one lakh as compensation. He will further be entitled to get Rs 20,000 towards costs of litigation,” it said.

Chaudhary had said that he had applied for allotment of a flat in the firm’s upcoming project at Greater Noida in September 2006 by paying Rs 6,40,000 as initial payment.

He paid Rs 16.51 lakh, out of total Rs 42.43 lakh, over a period of a few years to the firm, the plea said, adding that the firm changed the location of allotted flat.

Chaudhary later came to know that allotment of his booked flat had been cancelled and the firm forfeited the money. The firm opposed the plea saying it was not maintainable.

Source: ET

FDI in real estate may double after easing of rules: NAREDCO

Comments Off on FDI in real estate may double after easing of rules: NAREDCO   |  October 30, 2014

NEW DELHI: Foreign direct investment (FDI) in the real estate sector could jump over two-fold in the next one year with easing of FDI rules in the construction sector, realtors’ body NAREDCO said today.

Real estate developers and consultants were of the view that this move would give fillip to cash-starved realty sector, which is reeling under a slowdown since last 2-3 years. It will help developers in raising funds to complete projects.

Yesterday, the Cabinet relaxed FDI rules in construction sector by reducing minimum built-up area as well as capital requirement and easing the exit norms.

“Reduction in minimum built-up area to 20,000 sq meters from 50,000 sq meters and reduction in capital investment to $ 5 million from $ 10 million has the potential to more than double FDI inflows into housing, commercial real estate, hotels and townships in the next one year,” NAREDCO Chairman Navin Raheja said in a statement.

In 2013-14 fiscal, the FDI in construction development, which include housing and township, was $ 1.22 billion. During April-August period of this fiscal, the sector has attracted $ 446 million worth FDI.

Hailing the move, India’s largest realty major DLF Group Executive Director Rajeev Talwar said: “Praise to the Finance Minister for being so prompt in meeting the requirements of this industry in his budget announcement, then approval for Real Estate Investment Trusts and now relaxation in FDI norm. There will be huge amount of FDI inflow in this sector”.

Unitech MD Sanjay Chandra said this would “surely provide a boost to the real estate industry and go a long way in fulfilling Prime Minister Narendra Modi’s dream of creating smart cities throughout the country.”

Permission to sell completed projects to foreign investors will help Indian developers get much needed liquidity into the system, Chandra added.

Parsvnath Developers Chairman Pradeep Jain said: “We are thankful to government for this move. The sector is reeling under acute funding pressure. The foreign investment in real estate has also gone down in last few years. Hence, this move has sent a positive signal for the real estate sector”.

Terming the decision as a positive development, realty consultant CBRE South Asia CMD Anshuman Magazine said: “Real estate and infrastructure industry is starved of funds. This announcement will widen the base of investors, especially mid-sized financial institutions.”

It would also encourage new development projects in prime areas of large cities and in tier II towns, Magazine added.

Property consultant Cushman & Wakefield said the move is likely to give fillip to real estate sector. This step would be beneficial for the next phase of urban development.

PM’s plan for 100 smart cities: Government set to ease norms for FDI in construction

Comments Off on PM’s plan for 100 smart cities: Government set to ease norms for FDI in construction   |  September 23, 2014

NEW DELHI: The Narendra Modi government is set to substantially ease norms for foreign investment in the construction sector, hoping to drum up interest in the prime minister’s plans for 100 smart cities as well his affordable housing initiative. The government is seriously considering the removal of all restrictions on size and minimum capitalisation for the smart cities as well as affordable housing projects. “The discussions are on for exempting smart cities from all FDI conditionalities. We need to give them a push by making it attractive for investors,” said a government official.

The new policy is also expected to provide easier exit windows.The proposal could be moved for the Cabinet’s consideration as early as next week. The new foreign direct investment (FDI) regime may allow developers to exit after the completion of the project or through the approval of the Foreign Investment Promotion Board ( FIPB) against the three-year lock-in period currently imposed, a condition that has been a big deterrent to foreign investment in the sector.

Developers will be exempt from restrictions related to minimum capitalisation and exits if they commit 30% of the project cost to affordable housing. “The thrust will be on affordable housing and smart cities. The proposal is that they be exempted from the conditionalities to attract more foreign investment. There is a need to channelise investments in the affordable housing segment,” said a government official aware of the development.

The minimum built-up area has been proposed to be cut to 20,000 sq mt from 50,000 sq mt while the minimum capitalisation requirement will be halved to $5 million from $10 million. The government hopes the easier rules will also help in the faster completion of projects delayed by a squeeze on funds because of elevated debt levels. “The (Cabinet) note is more or less finalised,” the official added. The government is planning to set up 100 smart cities across the country that will provide modern amenities, education and employment opportunities. Finance Minister Arun Jaitley had proposed an allocation of Rs 7,060 crore in the Union Budget toward smart cities in the country.

The sector attracted $1.2 billion in FDI in 2013-14, down 8% from 2012-13. Investors would likely be able to exit projects on receipt of occupancy and/or completion certificates issued by the competent local authority or after FIPB’s nod.” It is being discussed to do away with the minimum lock-in period of three years after the completion of the project. A developer should be allowed to exit immediately after completing it,” the official added.This will also create an incentive for faster completion of projects.

“The prime minister has a vision of developing 100 smart cities as satellite towns of larger cities and by modernising the existing mid-sized cities,” Jaitley had said in his budget speech.

Under current rules, 100% FDI is allowed through the automatic route in development of townships, housing and built-up infrastructure, subject to stringent conditions. Present norms require minimum capitalisation of $10 million for wholly owned subsidiaries and $5 million for joint ventures with Indian partners.Between April 2000 and July 2014, construction development, including townships, housing and built-up infrastructure in the country received FDI worth $23.77 billion, or 10.4% of the total FDI attracted by India during the period.

The issue related to agricultural land will be dealt with at the state level. The BJP government is on a foreign investment liberalisation drive. It increased the FDI cap in defence to 49% from 26% last month and allowed 100% FDI in railway infrastructure while partially opening up railway operations. “International investors are already looking at India again.

The relaxation in construction FDI will definitely create a strong positive sentiment as far as smart cities are concerned. It will need to be backed by faster approvals and addressing issues related to the land acquisition policy,” said Sachin Sandhir, MD, RICS South Asia. “The government will give concessions to smart cities to make it attractive for foreign investors. Easing of norms has generated high interest levels from not just the foreign investors but also domestic players,” said RR Singh, director-general, National Real Estate Development Council (Naredco).

Source: ET

Indian home prices fell most in 52 nations, says IMF

Comments Off on Indian home prices fell most in 52 nations, says IMF   |  September 1, 2014

NEW DELHI: Is India’s real estate bubble finally bursting? The International Monetary Fund’s recently-launched data series on global housing prices hints at that. Among 52 major markets for which IMF has collated house price data, India has witnessed the steepest fall.

IMF’s calculation on the annual percentage change in property prices shows that prices in India fell by 9.1 per cent, the highest among major real estate markets. The fall is even worse than in countries struggling with the ongoing European Union’s financial crisis. Property prices in Greece, Italy, Cyprus, Spain and Portugal have all come down, but at a much slower rate. Ireland, on the other hand, registered a 4.3 per cent increase in housing prices.

Prices came down by 7 per cent in Greece, 6.5 per cent in Italy, 4.9 per cent in Spain and 3.3 per cent in Portugal. The annual change is calculated for latest available data or prices for the last quarter of 2013.

The data shows that there is an overall improvement in the global real estate market as prices are going up in a majority of countries. Of the 52 countries for which data is available, 33 have witnessed increase in prices, while property has become cheaper in 19.

Slump in Russia too

Among advanced economies, the US, Germany and UK witnessed an increase in prices whereas the property market seems to be slumping in France, Japan and Italy. Among larger emerging economies, China, Brazil and South Africa saw a rise in prices, while India and Russia face a sinking realty sector.

The IMF website states that the new data series released in June this year is aimed at keeping track of property boom-and-bust cycles. Boom-bust cycles in housing prices have predated many banking crises in recent times.

Global Property Guide, one of the IMF’s sources for real estate data, also confirms the downward trend of India’s housing market. The organization, which collates real estate data from across the world, links this to high interest rates and slow GDP growth.

India’s own National Housing Bank (NHB) Residex index shows a mixed trend in Q1 2014, with 13 of the 26 cities for which property price data was available witnessing an increase in prices and 13 registering declines. Global Property Guide’s analysis of India says that because of high inflation, a comparison of house prices at nominal rates might give a misleading result. At inflation-adjusted rates prices, it says, prices have actually fallen in 21 of these 26 cities. Even these numbers might not give a real picture of India’s highly unregulated property market and the problem might be much bigger. According to Global Real Estate Transparency Index-2014, a ‘fairness in property transactions’ ranking complied by a US based real-estate consultancy, India’s property market falls under the semi-transparent category.

Among 102 major real estate markets ranked by the consultancy, India’s tier-1 cities’ property market is ranked 40th while tier-2 and tier-3 markets are 42nd and 50th respectively in the world. All of them are labelled semi-transparent.

Source: ET

Office rentals may rise by 25 per cent says Cushman & Wakefield

Comments Off on Office rentals may rise by 25 per cent says Cushman & Wakefield   |  August 20, 2014

NEW DELHI: One would imagine that office rents would go down with a strong bounceback in demand for space from corporates. Pure economics, one would think? Not really. Office rentals are likely to climb up in the coming months because of a shortage of quality spaces in key business districts around the country.

“In certain key locations, rentals could go up 20-25 per cent in the next 12 months,” says Sanjay Dutt, executive managing director for South Asia at property consultancy Cushman & Wakefield.

The situation has been brought on by the fact that most developers and even private equity players have chosen to focus on the residential property market over the last three years, ignoring the office market that saw a dip in demand from companies because of the global economic slowdown.

“Because the money moved away from commercial, we will see office supply getting tightened,” says Anshul Jain, chief executive, India, at property advisory firm DTZ. Jain says that if a client came in today asking for 100,000 sq ft anywhere north of Sohna Road near Gurgaon, he will probably have only three options to show the client. “You will see a space constraint on the commercial side in the relevant areas. And rents are already moving up,” he says.

According to property advisory JLL, in calendar year 2014, 30.7 million sq ft of good quality office space will be completed in the top seven cities of the country. In 2015, about 35 million sq ft will be completed. In comparison, between 2008 and 2011, over 40 million sq ft of supply came in to the market each year. A landslide victory for BJP-led National Democratic Alliance in the recently-concluded elections has triggered new-found excitement in the corporate sector. A rising stock market has further helped improve business sentiments across sectors. Sensing an improvement in the economy over the next 12 months, companies are already starting to plan for that growth which has led to a rise in demand for office spaces, say property consultants.

Some corporates have already picked up spaces in the last few months. KPMG recently leased over 700,000 sq ft of space in Bangalore.

Tata Consultancy Services recently about a million sq ft between Noida and Gurgaon. There is a buzz that many big Japanese and Korean firms are looking for space too. Accenture is looking for space. E-commerce player Flipkart is looking for 1.5 million sq ft of office space. Pharma firms Abbott and Lupin are also eyeing space, say consultants. According to an informal survey of top property consultancies, various corporates are looking to lease over 40 million sq ft of space in the top seven cities over the next 12 to 18 months.

Companies in sectors such as ITeS, captive facilities for banks, software development, pharma, aviation, insurance and other services are in the market today for leasing space for expansion. “It’s difficult to find space today on the Outer Ring Road in Bangalore, which is a preferred location for companies,” says Juggy Marwaha, managing director, south for JLL.

Another consultant who did not wish to be named says if a client was looking for 200,000 sq ft of space together in a good location in Mumbai, it would be difficult to find more than five options today between Andheri, Bandra Kurla Complex and Lower Parel. It’s the same in the two prime locations in Gurgaon —Cyber City and Golf Course Road. “It is still a tenant leaning market but the dynamics are changing fast,” he says.

One broker says he has only three good quality properties to show in Gurgaon, but there’s competition among several clients who want them. Bhumesh Gaur, co-chair at the India chapter of CoreNet Global, an association of corporate real estate professionals whose members include over 100 Indian and foreign corporates, says demand is coming back but availability of space is a challenge today. DLF, for instance, has over 17 million sq ft of office space at Cybercity in Gurgaon but very little vacancy. “We have a good demand pipeline from captives and IT/ITES companies for Cybercity as a preferred workplace destination. However, we are left with very limited space with Cybercity today at 98 per cent occupancy level,” says Amit Grover, national director, office at DLF.

Rentals are going up in many of these locations. Rents on the Outer Ring Road in Bangalore, Cyber City in Gurgaon, OMR in Chennai, for instance, are up 15 per cent in the last one year. Bandra Kurla Complex in Mumbai has seen rentals remain flat but they are expected to rise now.

Source: ET

Steep rentals, lack of quality retail real estate making it tough for luxury brands to expand business in India

Comments Off on Steep rentals, lack of quality retail real estate making it tough for luxury brands to expand business in India   |  August 19, 2014

MUMBAI/DELHI: Niche luxury brands like Italian suit maker Kiton and British shoemaker John Lobb have started bespoke made-to-order services in India, but they are in no hurry to open swanky stores in the country. Reason: inability to find a place on the right location at reasonable rates.

“Rentals in India are as high as international markets, but the demand is not as much,” said Pratik Dalmia, founder of Mumbai-based Regalia Luxury, which has the rights to market and sell Kiton and John Lobb brands in India.

Steep rentals and lack of quality retail real estate at strategic locations near high-income neighbourhoods are making it hard for luxury brands to expand their business in the country in a viable manner, forcing many players to tweak their business plans and go slow.

Indian metros emerged among the lowest in a recent study on luxury retail penetration in top Asia Pacific cities. Delhi, Mumbai and Bangalore rank at 25, 25 and 27, respectively, according to property consultant JLL’s recent report which tracked the presence and expansion patterns of 100 top international luxury and mid-tier retailers in 30 major Asia Pacific cities.

“Though rents for baseline retail properties in India are generally affordable, prime retail assets command premium rentals across Indian cities when compared to other cities in the Asia Pacific region,” said Ashutosh Limaye, research and real estate intelligence service head at JLL India. “Given that the size of consumer spending in Indian cities is still on the threshold of growth when seen in the Asia Pacific context, the breakeven period for retailers here is discouragingly high,” he added.

Even established players like Reliance Brands, which operates a large number of stores for a clutch of big luxury brands such as Zegna and Brooks Brothers, find it challenging to justify investments. “Irrespective of the financial strength of a company, profitability is the focus. And rentals in India affect profits,” Darshan Mehta, CEO at Reliance Brands, said.

He said the handful of malls charge anywhere between Rs 300 and Rs 1,000 per square feet per month and on top of that around .`50 per square feet for maintenance. Then, there is 12% service tax, Mehta pointed out. Mall operators defend their pricing, saying they are currently investing in building the right ecosystem for luxury business to flourish in an emerging market like India.

“We have to constantly invest in building a destination for luxury consumption and drive footfall for the brands. And that requires money,” says Dinaz Madhukar, president of DLF Emporio luxury mall in Delhi. While retailers wait for the scenario to change in their favour, they have figured out alternatives. Mehta of Reliance Brands said he has launched at least four international fashion brands online by exclusively tying up with portals like Flipkart and Jabong.

As of now, a total of 70.7 million sq ft of retail space is ready and operational in top seven cities of the country. Out of this 25 million sq ft is grade A and it is completely taken up with zero vacancy, while the vacancy level for total retail real estate space is 12%. Although no sharp reduction in rentals is expected, the price gap between prime and affordable assets may reduce as 3.9 million square feet of retail space is getting added by the end of 2014 and 8.4 million sq ft by 2015 end.

Of this total space, around 50% is going to be of grade A, according to Limaye of JLL. “More malls have started positioning and reserving space for luxury retailers,” he said. He also expressed optimism that the new central government’s push for infrastructure development will create new locations with improvement in mobility and this will result in a steady reduction in the rentals going forward.

Source: ET

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