Latest Property News on 'Faridabad'

Amrapali in funding talks with PE firms

Realty firm Amrapali Group is in the process of raising about Rs 220 crore from private equity (PE) firms to fund the construction of two of its large residential projects in Noida. The Noida-based developer is raising Rs 100 crore from IL&FS Investment Managers Ltd for its 20-acre Princely Estate mid-segment apartment project. From JPMorgan Chase & Co, it is raising about Rs 120 crore for its 60-acre Silicon Valley project.

JPMorgan had invested Rs 75 crore in the firm’s Zodiac project in Noida in 2010, reports Mint. “Bank lending is a little difficult and time-consuming if you want a higher sum of capital, and then we have to look at alternative sources such as PE funds,” said Anil Sharma, chairman and managing director, Amrapali Group. “A single bank won’t lend a large sum and arranging a consortium of banks takes time.”

Sharma said Amrapali is raising money primarily to complete the two Noida projects in time; the projects are due for delivery to buyers in 2013. “If you want to target completion on time, particularly for large projects, you need strong financial backing,” he said.

Source: http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=17752&cat_id=1

Delhi: Property prices may fall 20-30% by mid-2012

Real estate prices may fall 20-30% in several pockets of Delhi-NCR and Mumbai in six months, but experts are divided on whether and when prices will decline across the board. A study by HT of the balance sheets of India’s top 10 listed developers revealed a massive oversupply and a slowdown in sales: they are sitting on an estimated Rs 31,000 crore worth of unsold properties. Already, most developers are offering freebies amounting to 5-8% of the property value. And if you bargain really hard, mid-rung developers are offering discounts of 10-15% on a case-by-case basis.

“But real estate firms are not slashing prices (across the board) as they can still access capital from private equity funds or by restructuring loans,” said a real estate analyst.
“Companies are going for high margins compared to high volumes. In the long run, this model is not sustainable,” said Pankaj Kapoor, managing director at real estate consulting firm Liases Foras. Prices will fall when companies begin to feel the pinch arising from slow sales. “There is a downward pressure on prices,” added Ambar Maheshwari, managing director of corporate finance at Jones Lang LaSalle India, a leading property consulting firm. “But it’s difficult to say when prices will actually fall.”

“Developers selling properties in prime areas are seeing sales, especially in completed projects. The sales are not happening in the outskirts and unfinished products,” said Niranjan Hiranandani, head of the Mumbai-based Hiranandani Group, a leading real estate developer. But industry experts said that specific exceptions apart, the oversupply is for real.

Source: http://www.hindustantimes.com/News-Feed/BusinessRealEstate/Delhi-Property-prices-may-fall-20-30-by-mid-2012/Article1-785091.aspx

Does higher Delhi mean cheaper flats in NCR?

The reason why real estate in Gurgaon and Noida is flourishing today is because land is scarce and hence expensive in Delhi. But with the Master Plan proposing vertical growth of the Capital resulting in a leap in housing, will prices of Delhi’s tony neighbours be affected? Most experts believe so. The Master Plan intends to unlock large tracts of land pockets in Delhi, mostly in peripheral and untapped areas such as Narela, Najafgarh, Kanjhawla, Bawana and extensions of Rohini and Dwarka. Super tall structures are expected to come up in most of these areas with private partnerships, which would supply 14 lakh new housing units.

“Gurgaon and Noida are thriving today because no new housing was being developed in Delhi for many years. When new housing units in Delhi are made available, prices in the suburbs would be affected,” said AK Jain, former Commissioner (Planning), DDA. “In fact, most investors in Gurgaon and Noida are from Delhi,” he said. The DDA has failed to provide affordable housing in sufficient number since its inception more than 50 years ago. The demand for housing was evident when more than 12 lakh people applied for the 16,000 flats offered by DDA in its housing scheme last year.

“It is a misnomer that Delhi has no land supply,” said Ramesh Menon, director of Certes Realty Limited, a real estate consultancy firm. “Land is being released for urbanisation in Delhi and Zone L (near Dwarka) and Zone N (near Rohini), are the key areas. “Of the 70,000 hectares of land being available, at least 25,000 hectares are meant for residential townships,” he said. “While Gurgaon and Noida have to create demand, Delhi is sitting on captive demand,” Menon said.

There are others, however, who believe that even with an increase in housing supply in Delhi, Gurgaon and Noida wouldn’t be affected. “Gurgaon and Noida see a different kind of demand and cater to a different demographic. They have enough latent demand, which would not be impacted by additional supply of housing,” said Vineet K Singh, Business head, 99acres.com.

Source: http://www.hindustantimes.com/India-news/NewDelhi/Does-higher-Delhi-mean-cheaper-flats-in-NCR/Article1-785041.aspx

Realty thugs on prowl in Noida, NRIs soft target

Even as more and more people are moving towards the twin townships in search of affordable homes, the numbers of property frauds have also been increasing. Police records show that nearly 200 property fraud cases were registered in Noida and Greater Noida this year with miscreants targeting NRIs and non-residents. Senior police officers said that they suspect organized gangs to be carrying out such operations. “The nexus is generally between local residents, property dealers and persons who are authorized notaries. In some cases, even Authority employees have been found involved,” said an officer.

Experts say the modus operandi of the gang involves, first in targeting a property to be sold illegally, then framing of fake documents by a notary, and finally searching gullible buyers by property dealers. “The gangs generally vanish after selling the property at handsome rates,” said an officer. The police say buyers pay a large portion of the property in cash or ‘black’ money which acts as a catalyst for such frauds. Cops also blame investors for trying to buy property through general power of attorney and in such cases documents can be forged easily. Last year, the district administration had formed a task force to monitor the illegal set ups and frauds, but none of the gangs were caught.

Source:http://timesofindia.indiatimes.com/nri/other-news/Realty-thugs-on-prowl-in-Noida-NRIs-soft-target/articleshow/11173151.cms

Unitech cuts debt by 40%, to reduce it more: Sanjay Chandra

Realty major Unitech has lowered debt by 40 per cent in last two and half years and would further reduce the borrowing in coming quarters from operational cashflows.
“We have reduced our gross debt significantly from over Rs 9,000 crore in March, 2009 to about Rs 5,500 crore now. The trend will continue in the next two-three quarters after that we may not need to reduce further,” Unitech managing director Sanjay Chandra said in his first interaction after getting bail in 2G telecom scam.
Besides gradual reduction in debt, he said the company would infuse more funds on construction of ongoing projects for fast execution of about 80 projects across the country. It invested Rs 1,300 crore on construction last fiscal.

“We do not have any concern on the debt front. Operational performance is leading to continuous reduction in debt and not asset sales,” Chandra said.
He noted that the company’s debt-equity ratio was in a comfortable position at 0.46 per cent and is very low compared to peer groups.
Unitech, the country’s third largest realty firm, has cut debt by nearly Rs 400 crore in the first half of this fiscal.
In 2009-10 fiscal, the company had raised about Rs 4,500 crore from qualified institutional placement of equity shares, out of which about Rs 2,200 crore was utilised to cut debt. After that reduction has been through operational cash flows.

On sales performance, Chandra said: “We are not pricing our products too expensive that sales are affected. We should achieve sales booking of Rs 1,000 crore per quarter despite macro-economic deteriorating”.
During the first half of this fiscal, Unitech has sold 3.71 million sq ft of area, mostly residential, worth Rs 2,088 crore. The company has launched projects comprising 6 million sq ft of saleable area and more projects are in pipeline.
Chandra said the company would not shelve its plan to develop 13 shopping malls because of the government’s decision to put on hold its plans to open FDI in multi-brand retail.

“We have nine malls under construction and we have land for another four malls. We will develop these malls,” he said, adding that the the company would invest up to Rs 3,000 crore in the next five years for this.
Unitech’s share price fell by nearly eight percent on Friday to close at Rs 19.55 on the BSE. The scrip has plunged from Rs 68.05 on January 4 this year. The market cap of company stood at Rs 5,111.24 crore.

Source:http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=17695&cat_id=1

Realtors turning business complexes into housing projects: Crisil

A huge oversupply in retail real estate sector is forcing Indian developers to turn their mall projects into homes. About 96 million sq ft of retail space is expected to be added by 2013 in the top 10 cities in India, while demand will be only for 34 million sq ft, said Crisil Research. This will create a significant demandsupply mismatch, arresting the rise in rentals. Bangalore-based , RMZ Corporation has recently converted its 1.1 million sq feet mall plan into residential-cum-hotel project. The firm had earlier tried to reduce the size of the mall to 500,000 sq ft and add a new office space component. “We are now building luxury homes at the location,” said Raj Menda, managing director of RMZ Corp.

Looking at the numbers, many real estate developers in India are seeking to convert their malls into mixed-use or residential projects. “This phenomenon has increased recently,” said Amit Bagaria, chairman of retail consultancy Asipac. While some micro markets in Bangalore will see an over supply of 168%, Hyderabad , on the other hand, from a present shortfall of 66% is headed for an oversupply that could go as high as 322% in 2014. The Mumbai Metropolitan Region will see an oversupply of 58% with Pune at 128%.

Because of the expected oversupply , a number of big mall projects, such as Atul Ruia’s Pheonix Market City mall, Sobha Developers’ Global mall, RMZ Corporation’s Galleria in Bangalore, Parsvanath’s Metro mall in Delhi and Lanco’s mall projects, are either being redesigned or shelved. Delhi-based builder Parsvnath has shelved five retail projects due to fund crunch.

Moreover, Pheonix Mills, Entertainment World Developers , Salarpuria, Omaxe, IVRCL and Goel Ganga Group are reconsidering their mall projects in Hyderabad, Bangalore and Pune. Sobha Developers has included a residential component in its maiden mall project , which it is jointly developing with Davnam Constructions. The mall was earlier expected to have an ice skating rink, amusement park, hotel and a commercial tower as well.

“With many other malls coming up in the same vicinity , Sobha is building only 660,000 sq ft of retail space while the rest will be residential ,” said a person with direct knowledge of the development . Sobha Developers confirmed the development but refused to comment on it. Delhi-based Omaxe Ltd said that over supply of mall spaces will only lead to stress on rentals and lower occupancy. “Building malls is not a lucrative business venture as the demand from retailers is very lukewarm , especially in the NCR. We are not looking at setting up new retail project now. The decision to launch new projects will be entirely linked to foreign direct investment in retail,” said Rohtas Goel, managing director of Omaxe.

Source:http://economictimes.indiatimes.com/markets/real-estate/realty-trends/realtors-turning-business-complexes-into-housing-projects-crisil/articleshow/11139740.cms

CREDAI Seeks 100 Basis Point Cut in Policy Rates

The Confederation of Real Estate Developer’s Associations of India (CREDAI) today demanded that the Reserve Bank of India (RBI) should cut the key policy rates by at least 100 basis points to improve liquidity position in the system and boost business sentiments. Reacting to RBI’s decision to keep the key policy rates unchanged, CREDAI Chairman Pradeep Jain said: “The RBI needs to bring confidence into economy and it should cut repo and reverse repo rates by at least 100 basis points to create liquidity and for support of the entire industry.”

Pointing out that business sentiments at the moment were very low, Jain said the central bank should take steps to improve it. “Inflation can only be controlled by improving supply and not curtailing demand,” he observed. In its mid-quarter review of monetary policy, the central bank maintained repo (rate at which banks borrow from RBI) at 8.5%, reverse repo (rate at which the RBI borrows from banks) at 7.5%. The halt in rate increase comes after 13 hikes since March 2010. The interest outgo of realty firms, which are sitting on a huge debt, have gone up significantly due to increase in cost of funds following subsequent rate hike since March last year.

Source: http://business-standard.com/india/news/credai-seeks-100-basis-point-cut-in-policy-rates/153128/on

Fresh Govt push for retail, civil aviation FDI

The government has not given up on liberalizing the foreign direct investment (FDI) regime despite suffering a setback on allowing foreign retail chains to set up shop in India. Within a week of announcing a pause on FDI in multi-brand retail, it is beginning fresh consultations with stakeholders, starting Tuesday, to get the plan back on track. To begin with, the food processing sector and small and medium enterprises are being consulted, with farmer groups and traders to follow.

Separately, the finance ministry is in talks with the Securities & Exchange Board of India (SEBI) to see how foreign airlines that acquire stakes in Indian carriers are not bogged down by the new Takeover Code in completing transactions. The new rules mandate that companies acquiring 25% or more in another entity have to make an open offer for an additional 20% stake. If the rules were to be applied to the civil aviation sector, then the FDI ceiling would be breached as the Manmohan Singh government is planning to allow foreign airlines to acquire up to 26% stake in Indian entities, which has hitherto been a taboo.

Sources said the issue is expected to be sorted out over the next few days as all ministries – including civil aviation that initially suggested a 24% cap – are now on board. If everything goes according to script, the government is planning to get Cabinet clearance soon after the winter session of Parliament ends.

The move, which is back in favour after a decade, is expected to ease the pressure on debt-laden airlines such as Vijay Mallya-promoted Kingfisher. While Indian airlines were earlier resisting the entry of overseas giants, they are the ones who are now keen on a partnership. Ditto for FDI in multi-brand retail where again, Indian promoters are now hoping that global chains will tie up with them and also ease the burden.

While a part of the discussion is aimed at getting feedback from the stakeholders, a major part of the exercise will focus on educating them about the advantages of allowing foreign retailers who are expected to bring in new technology to reduce wastage, generate jobs and help local vendors scale up to meet international standards. The discussions are also expected to focus on providing additional safeguards to protect local interests. Last week, the government had said it had decided to put the plan to allow 51% FDI in multi-brand retail on hold till a consensus was reached.

Source:http://timesofindia.indiatimes.com/business/india-business/Fresh-govt-push-for-retail-civil-aviation-FDI/articleshow/11088671.cms

Unitech Receives Shareholders Approval to Put Infrastructure Expansion Plans on Hold

Indian real estate firm Unitech Ltd said on Monday it has put on hold a plan to expand its infrastructure business and withdrawn another to merge two of its subsidiaries due to poor macroeconomic scenario. The firm had received shareholders and creditors’ approval for the plans, proposed to focus on its core business of constructing and developing residential and commercial real estate projects and expand its infrastructure business, it said in a statement.

“Keeping in view the prevailing macroeconomic scenario, the company has decided to put its plans to expand the infrastructure business on hold and focus on its core business,” it said. Unitech, which holds a minority stake in a telecoms joint venture with Telenor, has also been hit by a multi-billion dollar telecoms licensing scandal. Police have also charged and arrested 14 people in the case, including Unitech’s managing director Sanjay Chandra. All accused have denied any wrongdoing.

DLF to Sell Hotel subsidiary to Kolkata Based Square Four Housing

DLF Ltd, the country’s largest real estate company, is set to sell its hotel subsidiary to Kolkata-based Square Four Housing & Infrastructure Private Ltd for Rs550 crore, its third divestment in the last three month as it disposes non-core assets to pare its Rs22,500 crore debt. As reported by ET last week, the Delhi-based real estate company had acquired Hilton International’s 26% stake in DLF Hotels & Hospitality forRs120 crore and is now the sole owner of the hotels unit which own land parcels in four cities – Kolkata, Chennai, Mysore and Thiruvananthapuram.

This subsidiary’s assets do not include Aman Resorts, another non-core asset that DLF has been trying to sell for a long time. Two persons with direct knowledge of the transaction said DLF has signed a non-disclosure agreement with Square Four and expects to conclude the deal by third week of January 2012. The stake purchase from Hilton was a precursor to a total selloff, they said. “We are in discussion with DLF and cannot comment until we achieve the financial closure of the deal,” said Square Four Housing chairman and managing director Ganesh Singhania. The DLF spokesperson declined to comment.

DLF Hotels would be the third big-ticket asset sale by the realty giant in the current fiscal. Earlier this month, it completed the sale of its IT Park in Noida to IDFC for Rs512 crore. A couple of months ago, DLF divested a 28-acre land parcel in Gurgaon for Rs400 crore. One of the persons familiar with the development said Square Four has already paid a part of the financial consideration and expects to complete the deal by third week of January. It is in discussions with financial institutions to raise resources to fund the transaction, said this person.

Square Four will develop the Kolkata and Chennai land parcels for hotel-cum-commercial-cum-residential projects while the land in the other two centres – Mysore and Thiruvananthapuram – will be developed as pure luxury hotels. “Square Four has also started discussions with leading hospitality chains such as Four Seasons and Radisson and Hilton, among others, to form strategic alliances for developing all four hotel properties,” said the person familiar with the development. He added that the firm is also in discussions with some leading Mumbai-based real estate players for developing the residential and commercial parts of the Kolkata and Chennai projects. Singhania said his Square Four group specialises in buying distressed assets and turning them around.

The group has a net worth of Rs500 crore and owns an asset reconstruction company called Square Four Asset and Management Reconstruction Company. DLF is attempting to sell its IT SEZ in Pune, which it owns in partnership with Akruti City, as well as Aman Resorts, the super luxury hospitality chain it bought in 2007 for $400 million.