Latest Real Estate News on 'Gurgaon'

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

1 Comment   |  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

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

Add comment   |  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

Builders hunt for cheaper land & technology to offer affordable housing

Add comment   |  July 21, 2014

NEW DELHI: Builders are scrambling to acquire cheap land and technology for low-cost housing after the government and central bank announced incentives for affordable housing, including cheaper loans to developers and buyers.

Real estate companies including Tata Housing, ATS Infrastructure, Bhartiya Group and Anantraj Industries are busy sewing up land deals for projects in the Rs 5-20 lakh home segment. There is unlimited demand for homes in this segment, say experts.

“There is a large market for such homes but a big supply constraint as well,” said Shailesh Pathak, executive director of the Bhartiya Group, which is planning to build 10,000 low-cost homes over the next two-three years on a 50-acre land near Chennai. Its larger plan is to upscale this to a million homes in the next decade across the country.

According to the ministry of housing, India faces a shortage of 18.78 million homes, of which 96% is in the economically weaker and low-income segments. The challenge for builders is to find cheaper land that makes it economically viable for them to build such homes. Such lands, however, are only available away from the cities, where, in most cases, there is a lack of transport facilities.

What is also required in this segment is a way for the builder to keep cost of construction in check, which can be achieved by adopting technology to speed up construction.

Tata Housing, which has decided on a long-term strategy for this segment, has set up a pre-cast plant in Bangalore where a house is literally manufactured and then assembled on site. “This technology standardises our homes and because it is factory based, we save on both time and cost,” said Rajeeb Kumar Dash, head of marketing services at Tata Housing.

What conventional construction achieves in three to four years, this technology does in two to three years. The one year saved translates into cost benefits.

Pathak of the Bhartiya Group says Korea has been successful in providing mass housing, while Mexico and South Africa have interesting success stories. His company is looking at international and other Indian case studies with the aim of incorporating key learnings and eventually adopting one of the technologies.

Noida-based ATS Infrastructure has built 400 apartments priced less than Rs 10 lakh in Bulandshahr in Uttar Pradesh and is looking at similar projects on the outskirts of tier-2 cities such as Muradabad, Kanpur, Saharanpur and Bhiwadi.

Managing director Getamber Anand said ATS Infrastructure would look at incurring capital expenditure for technology only after a certain scale is reached. At the moment, his in-house construction team sources materials from around project sites to keep costs low, as did noted British-born Indian architect Laurie Baker.

“This is a volume game, with very thin margins,” Anand said. Builders are working on different models. Anantraj Industries, for instance, secured cheap land from the Rajasthan government in Neemrana, but on condition that the company would not sell houses over a certain price. It built 2,300 homes with one room, toilet and kitchen in the industrial area and sold them at Rs 8-9 lakh each.

“We are now looking at replicating the model for other projects as well. Low cost of land and low cost of money will help,” said Amit Sarin, director at Anant Raj Industries.

Mayank Saksena, managing director at property advisory firm JLL, said several developers are looking at buying cheap land and some are even open to revenue share and joint developments for projects with owners of land in good locations. But there is a word of caution.

While the government has articulated a clear vision for housing in the budget this month, apart from cheaper capital and land, approval delays and regulatory hurdles need to be sorted out.

“Any delays could severely impact such projects because of the thin margins they operate on,” said Vishal Gupta, managing director of Ashiana Housing.

CCI orders fresh probe against DLF firm for Gurgaon project

Add comment   |  June 30, 2014

New Delhi : The Competition Commission of India (CCI) has ordered a fresh probe against a DLF group firm, DLF Universal, for allegedly imposing unfair and unreasonable conditions on office buyers at one of its commercial projects — Corporate Greens at Sector 74A — in Gurgaon.

CCI said in its 11-page order dated June 23 that “the conduct of DLF Group, emanating from its dominant position in the relevant market, prima facie, amounts to imposition of unfair terms and conditions on the commercial office buyers which is anti-competitive”.

After looking into the complaint, CCI said its prima facie opinion was that despite the presence of other developer in commercial real estate space in Gurgaon such as, Emmar MGF Land, Unitech, Spaze Towers, Vatika , Bestech Indian, JMD, DLF Group appears to be dominant in the relevant market. “Having examined the clauses of the agreement, it appears that some of them are unilateral, one sided and loaded in favour of the opposite party (DLF Universal),” CCI said.

Some other group entities of the real estate major have already faced probe by the CCI with regard to various other cases of anti-competitive practices. CCI had also imposed a fine of Rs 630 crore against DLF for abuse of its dominant market position a residential real estate case, but the company had challenged the same.

The director general has also been asked to investigate the role of the DLF Universal’s officials who were in charge and their involvement with respect to the firm’s alleged conduct.

Source: TOI

Internet influencing real estate decisions worth $43billion in India: Google

2 Comments   |  June 18, 2014

NEW DELHI: As more Indians log online to seek information before entering into property deals, Internet today is estimated to be influencing decisions worth about USD 43 billion, search engine giant Google said.

According to a study commissioned by the US-based firm, over 50 per cent of real estate buyers’ decisions are influenced by Internet research.

“This phenomenon of researching online for real estate information before making a decision is not limited to metros but also extended to buyers in tier II cities,” Google India Industry Director Nitin Bawankule told reporters here.

The overall influence of Internet on real estate transaction value of both residential and commercial property including rentals amounts to USD 43 billion (USD 31 billion for residential and USD 12 billion for commercial), he added.

The primary reasons for researching online were easy access to in-depth property information and market trends (60 per cent), large comparison options (52 per cent), easy access to contact details of owners and developers (49 per cent) and financing and document processing information (43 per cent).

The survey, conducted by consultancy firm Zinnov across 15 cities in India included the metros, Pune, Lucknow and Ahmedabad with 6,196 respondents.

Talking about search trends on Google, Bawankule said the number had seen a 3x growth in the last three years.

“There is tremendous opportunity for both online real estate aggregators, brokers and developers to engage the buyers online by providing rich, meaningful and immersive experience to buyers on the Internet,” he added.

According to the study, 62 per cent respondents said aggregator sites (like and were top sources of information for them on the Internet, followed by websites of real estate companies (52 per cent).

About 45 per cent said they visited broker sites, blogs and forums to find information before making a decision.

An increasing number of people are also using their mobile devices to search for properties online.

“Mobile queries (those originating from mobile phones) are doubling every year and about 40 per cent of total searches came through mobile phones,” Bawankule said.

Also, the study found 73 per cent respondents saying they prefer using their mobile apps for researching for property.

However, a major concern for people researching online was the lack of accurate and updated information.

Respondents said websites of developers and aggregators often lacked availability of in-depth information about property and features like easy price comparison.

Real estate company MD booked for alleged fraud

Add comment   |  May 23, 2014

GURGAON: The managing director of real estate company Vigneshwara Group and two of his family members have been booked by Gurgaon Police in a multi-crore fraud case. Some estimates put the scale of the fraud at more than Rs 1,000 crore.

Despite taking money from around 700 investors for properties in and around Gurgaon in 2006-07, and promising assured returns till possession, the group allegedly didn’t begin construction of some projects and defaulted on payments to investors.

An FIR was filed at Sushant Lok police station against group MD Sunil Dahiya, his brother Sanjay and father Daryav Singh. Dahiya hasn’t been taken into custody yet because he complained of illness and was hospitalized.

Dahiya and the others have been accused of putting out misleading advertisements promising 12% returns on investment in under-construction properties at Gurgaon’s Sector 74 and IMT Manesar.

Geetha Venkatesan, one of the 38 investors in Vigneshwara projects who filed the complaint, alleged she had not received payments since last month and that cheques issued by the company had bounced. She also alleged that the project at IMT Manesar, which started in 2006-07, was just 20% complete while the one at Sector 74 was yet to take off.

“The three were booked under sections 420 (cheating), 406 (breach of trust), 120B (criminal conspiracy) and 34 (common intent) of the IPC,” Sushant Lok police station officer Naresh Kumar said. “We have served notices on all the accused to join investigations but the main accused said he was unwell and was admitted to hospital for treatment. Police will detain him soon.”

Ram Singh, another complainant, made similar accusations against Vigneshwara. Kiran Kumar, also an investor and a complainant, said, “We were assured that the money will be returned by May 20 but the promise was not fulfilled.”

The case was registered after investors protested at the realtor’s office in Sector 52.

Source: TOI

Hoping for a turnaround, realty brokers bet big on Narendra Modi government

Add comment   |  May 21, 2014

NEW DELHI: Since the election results were announced last week — handing out a clear mandate to the Narendra Modi-led BJP — real estate brokers across the country have been prodding buyers to book their dream homes fast, since with a stable government on the cards, builders could increase prices any time soon.

Business for thousands of brokers has been thin over the last year or so as negative sentiment engulfed the market and home sales tanked. Investors fled and genuine home buyers waited anxiously to see if a new stable government can infuse life into the economy.

“It might just be a case of brokers trying to perk up the market, riding on sentiments,” says Samir Jasuja, managing director of property research firm PropEquity.

Developers and industry experts say property prices are likely to remain stable, at least for the next few months till the industry measures up the new government’s policy and reform initiatives, which is good news for buyers. Developers are hoping that the new government would hasten the pace of granting approvals to projects and also get the Real Estate Regulation and Development Bill, which has been hanging fire for many months, passed.

“There’s abundant supply in the market and lots of options for buyers. But no immediate price increase is in the offing,” says Getambar Anand, managing director of ATS Infrastructure and also the president of the Confederation of Real Estate Developers Association of India (Credai).

Jasuja of PropEquity says prices will take some time to go up. “It won’t be a knee-jerk reaction from developers.”

With slowing home sales over the last year and a half, developers have been facing a liquidity crunch. Unsold inventory levels have risen dramatically. According to property research firm Liases Foras, in the December quarter, unsold inventory levels rose to about 650,000 apartments, which would take over 30 months to be sold. That number went up to 700,000 by the end of March 2014.

Selling off this huge number of unsold homes will be priority for developers, says Abhay Khemka of Gurgaon-based real estate brokerage firm Khemka Investments and Properties.

While there’s been no rush to buy homes, brokers are starting to get calls from end-users and investors alike. Khemka says he has heard from five of his investor clients in Gurgaon over the weekend.

“While some brokers might be trying to force the issue to increase their business, buyers also realise that developers are under stress. Those who have the money and can buy are starting to explore the market as sentiment improves,” he says.

Many buyers have been sitting on the fence for the past few quarters because of negativity in the market — a slow economy, nagging inflation, political uncertainty, a not-too-encouraging job scenario across sectors, high cost of homes and rising home loans. Now, with the stock market on the rise and the rupee strengthening, these fence sitters are also getting positive vibes.

Source: ET

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