Latest Property News on 'Hyderabad'

Hyderabad realty in consolidation mode

The year 2012 has begun on a promising note with new projects being announced, a relatively stable political environment without much sign of a stir for the separate Statehood of Telangana, and a successful CII Partnership Summit, which was witness to the assurance of huge investment proposals. Builders hope these would create good vibes for the sector.

The Hyderabad real estate market continues to consolidate after entering the new year, with prices still at three-year lows. Builders across segments, luxury housing, middle-income and affordable housing, believe that the market sentiment shows that it is still a buyer’s market.
ROBUST GROWTH

The General Manager of Ramky Estates, Mr Patnaik D. R., told Business Line that demand has shot up in most major cities of the State, barring Hyderabad. Visakhapatnam, for instance, has shown a robust growth and prices too have firmed up there. The situation continues to be stable in Hyderabad.

Several developers have announced new projects in the past few weeks, showing a good sentiment spilling onto 2012. PEBL, a venture that is developing a large project with L&T as construction partner, has announced a project close to the IT hub; Mahindra Lifespaces, one of the top real estate developers, announced a new project, and a few others are close to firming up new ventures.

Many of the developers are also looking at the affordable housing segment, where there is relative demand-supply mismatch.
Mr P. V. Ravindra Kumar, Chief Executive Officer of Vasathi Housing Ltd, said that the company is looking at not only expanding their new venture Vasathi Housing project, but also setting up projects in Bangalore and Chennai. There is good business environment in real estate lately. “Any project that is strategically positioned, with right price offering, will be successful,” he said.

The Managing Director and CEO of Mahindra Lifespace Developers Ltd, Ms Anita Arjundas, earlier during the month, announced their entry into Hyderabad, with a one million square-foot, Rs 250-crore housing project. She said “for a corporate entity focussing on the real estate market in several States of the country, we continue to invest in new projects unmindful of the slowdown, factoring the business cycle of ups and downs.”

“In fact, we continue to study the market keenly and are close to finalising plans for affordable housing ventures, where there is demand. This is a promising area, and the company hopes to enter this by next year, beginning with a focus on markets such as Maharashtra,” she said.

BUOYANT MARKET

During a meet hosted by the Confederation of Real Estate Developers Association of India (CREDAI) here recently, Mr G. Yoganand, Managing Director of Manjeera Constructions, said the real estate market in Hyderabad is on course again, particularly in the core city areas. The shortage of housing units in the core city areas is resulting in increasing demand in peripheral areas, which are well-connected.
Mr Yoganand, who is the President of CREDAI, AP, quoted consulting firms Jones Lang Lasalle and Knight Frank and their reports to suggest that the real estate prices will go up during the year.

Mr Prem Kumar, President of Andhra Pradesh Real Estate Developers Association (APREDA), said the realty market continues to look buoyant from November last. The agitation-related issues have settled down, the Partnership Summit ended on a very good note and the number of enquiries is going up.

The prices are also likely to firm up as input costs have gone up. The GO No 45 continues to be a matter of concern, as it has stalled some of the large projects. The GO seeks to provide for housing for weaker sections, as mandated by the Government, through the order. In the current form, builders are opposed to this move, the builders association felt.

The real estate developers have appealed to the State Government, requesting it to rework the order and make it more practical. Any delay in resolving this would hold back some of the projects on the verge of being launched, Mr Prem Kumar said.

Mr Patnaik felt that several projects are close to being announced by not only Ramky Estates, but also some other developers in Hyderabad and other major cities of the state including Visakhapatnam, which has seen good momentum lately, due to the announcement of infrastructure projects coming up.

Mr Prem Kumar, quoting recent property shows and the growing number of enquiries for new projects, says that the end-user is hunting for property once again and this will translate into good numbers.

Source: http://www.thehindubusinessline.com/features/investment-world/article2801364.ece

Mahindra arm plans Rs 250 crore project

Mahindra Lifespace Developers, the realty arm of the $14.4-billion Mahindra Group, is setting its foot in Hyderabad, its fifth market in the country, with a one-million square feet residential project involving an investment of Rs 250 crore.

“We are currently doing the site preparatory work. The project, on a 10-acre site at Kukatpally, will be launched in the next couple of months and will be delivered in three years from then,” Anita Arjundas, managing director and chief executive officer, told mediapersons.

Having completed close to 7-million sq ft of projects in the National Capital Region, Chennai, Mumbai and Pune, Mahindra Lifespace presently has 10 million sq ft of space which it calls Mahindra Lifespaces under various stages of development – some on the drawing board and some ready to be delivered – which will be completed in the next four years. Of the 10 million sq ft, the selling price for 3.5 million sq ft space would be Rs 4,700 per sq ft.

“We have land parcels in five cities and investments in them have already been done while we require Rs 2,000 crore for the construction,” she said, adding the company’s board had approved additional borrowing of up to Rs 500 crore via non-convertible debentures (NCDs) or term loans. “We, however, will look to raise Rs 250 crore via NCDs to part-fund our ongoing projects by the end of the present financial year.”

Stating that Hyderabad, Pune and Nagpur would be the next important markets for the company, she said they were exploring other long-term opportunities actively in the city.

Mahindra Lifespace, which caters to the middle and high-end housing segment with the selling price ranging from Rs 2,700 per sq ft to Rs 10,000 per sq ft, is drawing up plans to enter the affordable housing segment in tier-II cities in the price range of of Rs 5 lakh to Rs 15 lakh per unit.

“We are studying the market for the new category. We have a strong presence in Maharashtra, NCR and Tamil Nadu. Hyderabad is also one of the markets we are looking at for affordable housing. We have to see how the first project takes shape in a year from now, before moving to other regions,” she said, declining to comment further.

Mahindra Lifespace has delivered 1.4 million sq ft of space worth Rs 700 crore in sales last year. Its average EBIDTA (earnings before interest, taxes, depreciation and amortisation) margin presently stands at 32 per cent and net profit margins at 22 per cent.

Source: http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=18049&cat_id=1

Mantri Developers replaces Maytas in Jubilee Hills Landmark Project

Bangalore-based real estate firm Mantri Developers is replacing Maytas Properties, the Satyam group firm that was building Jubilee Hills Landmark along with ICICI Venture and Nagarjuna Constructions Company. The project was stalled after the founder of Maytas Properties and the erstwhile Satyam Computer Services, Ramalinga Raju, got embroiled in an accounting fraud. According to the new deal, Mantri will get 40 per cent of the revenues from the project, Economic Times reported, citing sources.

“The real estate company will need to deposit Rs 130 crore, which will be used for construction and will be adjustable against the revenue. The property has over Rs 150 crore of non-performing loan on it,” one of the sources said. Sushil Mantri, managing director of Mantri Developers, had earlier said that his company is looking at a possible tie-up for the property. “We have concluded the due diligence and may buy entire stake or become an additional partner to the project,” he had said, without sharing details of the deal. Nagarjuna Constructions Company refused to comment on the transaction. Mantri Developers said the legal process was still on.

Originally, Maytas, Nagarjuna Constructions and ICICI Venture held 33 per cent each in the special purpose vehicle that was developing the Jubilee Hills Landmark project. The three companies had bought the 5.7 acres of land for the project from the state government for Rs 335 crore in 2006, which is still the most expensive real estate deal in Hyderabad. “Originally scheduled to be completed by the end of 2008, there has been no progress. However with the new partnership, construction will now start in the next two-three months,” said a senior official from one of the partner companies, who also added that there might be a few changes in the project too. Mantri Developers has significant presence in Hyderabad and has over 8 million sq ft under various stages of construction across different residential, commercial and retail projects.

Source:http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=17827&cat_id=1

IVRCL puts land assets on the block

Hyderabad-based IVRCL Infra is planning to sell as much as 1,600 acres out its land bank that it had secured for its real estate development. The land spans across five cities: Bangalore, Pune, Chennai, Hyderabad and Visakhapatnam. The 1987-founded IVRCL, which operates in the core sectors of water & environment, transportation, buildings and power, also has four land blocks in Noida. These properties, east of Delhi, are ones it plans to sell off in the current financial year itself, reports Business Standard.

The company has around 2,300 acres of land in total. “Except for the 700 acres that we are already developing in Sriperumbudur (near Chennai), we plan to sell all the other land wherever we get a good price,” said Balarami Reddy, IVRCL director (finance). The company is currently developing an integrated township at Sriperumbudur not far from the Chennai-Bangalore highway. The township, with a saleable area of about 30 million square feet, will also have retail, hospitality, social infrastructure and special economic zone.

IVRCL plans to use the cash from land sale as capital for future projects in its bid to reduce debt requirement. “We are already facing the challenge of high interest costs,” said Reddy. “Reducing debt and financing cost is a challenge that we are currently fighting.” Even as the company’s net debt to equity ratio has been steady at 1:1, increased interest rates have been eating into its margins.

Source: http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=17753&cat_id=1

Goldman Sachs picks up 25 acres in Bangalore’s ORR

In what could be one of the largest land deals in Bangalore this year, global investment banking firm Goldman Sachs has signed up 25 acres of land on the Outer Ring Road. The land has a development potential of 2.5-million-sq-ft office space with an employment potential of 25,000. The space would be developed by Kalyani Developers.

An official of a real estate services firm, who did not wish to be named, told Business Line that Phase I of the development would be completed in 2013, while the second phase would be completed in 2015. According to him, the company has already signed a Letter of Intent with the developers. The company is looking at relocating completely from its existing offices in Manyata Tech Park and Embassy Golf Links, he said. Real estate analysts estimate that land in the Outer Ring Road area could be priced at about Rs 6,000 a sq ft.

Infosys too has recently signed up for 1 lakh sq ft SEZ space at Bagmane World Trade Centre on the ORR, which could be the Indian IT behemoth’s first non-captive space in the city. An Infosys spokesperson confirmed the development. Other important deals this year include Wipro (1.3 lakh-sq-ft SEZ space at Pritech Park on the ORR), Accenture (87,000 sq ft – Pritech Park), and Ericsson (3.5 lakh sq ft – Bagmane WTC) — all in Q1 of 2011. In the second quarter of this year, Cisco signed up for 3.75 lakh sq ft (Vrindavan Tech Village and Salarpuria Hallmark on the ORR) and Accenture (1.3 lakh sq ft at Pritech Park). In Q4 of 2011, Aricent Technologies took on lease 2 lakh sq ft (Prestige Etamin on the ORR) and Sunguard (2 lakh sq ft – Umiya Business Bay on the ORR).

Source: http://www.thehindubusinessline.com/markets/article2709596.ece?ref=wl_opinion

Emami Group buys 850 Acres of Prime Land in Countrywide Property Expansion Binge

Emami Group, a Rs 3,700-crore diversified conglomerate, has bought about 850 acres of prime real estate in a countrywide property expansion binge. The company has spent more than Rs 200 crore to buy land in Hyderabad, Chennai, Coimbatore, Jhansi and Kolkata for developing up-market large scale residential and commercial complexes.. Top officials from Emami are negotiating more land deals and expect to clinch them in 2011-12, RS Agarwal, group joint chairman, Emami, was quoted as saying. “We are indeed in a hurry to lap up huge tracts, but will not close the land deals in haste. All pros and cons will be weighed before we clinch the property,” he said.

Agarwal, however, refused to reveal the break-up of these deals citing corporate governance issues. He said the company has been supported by commercial banks and lending institutions. “We are looking to build premium residential complexes. We also plan to develop large as well as mid-sized mixeduse housing projects comprising residential, hospitality, retails and commercial properties depending on prevailing market conditions,” said Girija Choudhary, director, Emami Realty.

“Our real estate ventures, like all other projects being undertaken by us, will be financed by unsecured and secured loans, advances from customers and promoter’s own funds,” Choudhary said. The Emami Group, which has taken big strides in FMCG and personal care space over the years, has been actively involved in the city’s realty market. It has acquired majority stakes in some of Kolkata’s landmark real estate projects being developed by a city-based realtor or a group of realtors. On its own, the group has been building residential complexes under the Orbit brand.

“Although a firm decision has not been taken, as a group we intend to grow our real estate business independently. Joint venture developments will be taken up selectively and only if the deal is lucrative. Going forward, the focus will be more on promoting the umbrella brand ‘Emami’,” Agarwal said, outlining the group’s future plans.

Bangalore Based Sobha Developer Looking to Raise 150cr via Sale of Land Bank

Sobha Developers, the Bangalore-based publicly-held realtor, is understood to be looking to offload a part of its 2,550 acres of land bank spread across the country to reduce its gearing (comparison of long term debt to its equity capital) by the end of FY11. The company, which has a debt of Rs 1,362 crore with a gearing of 0.71 times, is looking to bring this level to 0.5 by end of the ongoing fiscal, reports Business Standard. “We are targeting to raise Rs 150 crore through sale of land bank shortly. In addition to this, with steady sales being registered we should be able to able to bring down the leverage to more comfortable levels,” a senior official of Sobha Developers was quoted as saying.

The company over the past 18 months has been offloading land bank parcels after touching a uncomfortable leverage of just under two times as it amassed debt to expand its land bank when the global financial meltdown of 2008 hit the realty sector in India.
According to the company, its net debt level recently increased as it invested to acquire a majority stake in one its subsidiaries which is expected to realise sales of Rs 808 crore over the next few years as and when it is developed. Sobha Developers has 45 ongoing projects aggregating to 16.16 million square feet in real estate and with 22.30 million square feet of total area under development.

It is also lining up 17 projects aggregating 8.97 million square feet in real estate. According to the senior official of Sobha Developers, eight projects aggregating to 2.25 million square feet of projects are targeted for completion in FY12 in the real estate segment, while 23 projects aggregating to 2.80 million square feet of projects are planned to be completed by the end of this fiscal. “Overall, 31 projects, aggregating to 5.05 million square feet are targeted to be completed and handed over by FY12,” he added.

Despite gloomy macroeconomic conditions, the company has managed to grow its average sales realisation to Rs 5,196 per square feet as against Rs 4,547 per square feet during the corresponding previous second quarter of last fiscal. “The present trend reflects further improvement in the realisation in the coming quarters and we are confident of maintaining current operating margins despite cost pressures,” the official noted adding that they are poised for Rs 1,500 crore new sales in real estate. The company has cash and cash equivalent of Rs 438.54 crore by end of Q2 of FY12.

SMR’s Flagship Gated Community Project Getting Ready in Hyderabad

SMR Vinay Fountain Head, the flagship gated community of real estate developers SMR Group, would be ready by February next year. SMR would give possession of the dwelling units then. In all, it has about 975 units in 10-acre project coming up at Hydernagar, near the Miyapur to Ga-chibowli road in Hyderabad. The project is situated near the IT hub of Hyderabad. According to SMR chairman and managing director, S Ram Reddy, who is also the chief architect of the project, the Fountain Head focused on the layout to ensure that it would not be ‘crowded’. It would have four towers, each 19 floors and a lot of landscaping.

The project is a combination of two BHK averaging 1,200 sq ft and three BHK measuring around 1,800 sq ft. The company claimed it has sold about 50 per cent of the units at an average price of Rs 2,900 per sq ft. The project cost is estimated to be Rs 350 crore, of which Rs 75 crore came from promoters, Rs 70 crore as loans from financial institutions and about Rs 150 crore from the owners- to-be.

“The total area of construction is about 20 per cent. We have left the remaining open. The structure is designed to withstand seismic loads,” he said. Based on customer feedback, it designed the living room for multiple uses. The units would have sit-outs offering a view of the surroundings, said Reddy, adding that the project has a 50 ft setback including 30 ft road and 20 ft greenery. About 75,000 sq ft has been earmarked for various amenities. For health freaks, Fountain Head would have a jogging track and separate gyms for men and women.

The terrace garden turns into a venue for get-togethers and celebrations with music. And for the pumped up ones, there is a dance floor, too. For leisure, swimming pool, reading room, coffee shop and tennis court are lined up. The gated community, where the apartments would not have common walls, would also provide wi-fi connectivity, a three-level parking including for guests, children play area, an amphitheatre and multiple banquet halls.
SMR has other residential projects — such as Sky City with 120 apartments in 13 floors at Uppal and Symphony with 190 units at Gachibowli — which are already partly occupied.

Puravankara Targets Overseas Market; Plans Project in Sri Lanka

Real estate developer Puravankara is eyeing the overseas market for expansion. The company’s maiden project in a foreign soil is coming up in Sri Lanka. The company had invested on the land some years back, but postponed development as the situation was not congenial for promoting mega projects. “We were waiting for the right time to develop it,” a senior official of the company told Business Line.

Stating that Purvankara would make an announcement about this upcoming project before the end of the current calendar year, the official said “the site is located en route to the airport from Colombo city. It is a 25-acre plot and we have the necessary approvals in place from the respective authorities.” The real estate development major also owns another piece of land within the city limits, but would look at developing the same at a later date he said, referring to the land holding in Colombo.

“The project would comprise apartments and mid-segment dwelling units,” he said without disclosing more details about the company’s overseas venture. In India, Puravankara is planning to reach out to 22 cities over the next five years. The company is planning to moot projects in Tiruchi, Salem, Madurai and so on among other locations.
The company, meanwhile, has expressed its intent to hike the price of ‘Purva Bluemount’ – a project under construction at Singanallur in Coimbatore, from November 21. The project is sitting on 16.86 acre, with a planned layout of 1,116 units, comprising two and three bedroom apartments ranging from 1,352 sq feet to 1,872 sq feet. Construction is under way, work commenced around May 2011.

Decision on FDI in Multi Brand Retail Next Week

The Government’s long awaited ‘big ticket’ reform — of allowing foreign direct investment (FDI) in multi brand retail — is likely to see the light of day soon, with the Union Cabinet likely to take up the issue next week. The case for increasing the current 51 per cent cap on FDI in single-brand retail is also likely to be considered at the same time, Business Line reported, citing sources. Allowing FDI in multi-brand retail would open the door for giant multinational retail chains such as Walmart to enter the Indian retail sector. Currently, Walmart has a joint venture with Bharti for wholesale ‘cash-and-carry’ stores.

The move had been delayed by strong political opposition from some quarters, which feared that the entry of foreign retail chains would kill the small Indian retailer. According to sources, the plan is to issue the necessary orders within a month of the approval by the Cabinet. “So now you can expect a New Year gift for the foreign investors”, a person familiar with the development said. But the “gift” is likely to come with several strings attached. Sources confirmed that the Cabinet nod was likely to come with several modifications to the recommendations made by the Committee of Secretaries (CoS) on the subject.

For example, the final guidelines for the FDI may ask for 30 per cent mandatory sourcing from small and medium enterprises (SMEs). The definition of the SMEs may include domestic and global firms. It may be recalled that the CoS, in its meeting on July 22, said, “The condition that 30 per cent of value of manufactured items may be procured from the domestic SME sector, was not agreed to.” The Government is also likely to stipulate that in the case of agricultural produce, 60 per cent of the sourcing should be from low-income, resource-poor farmers.

Such farmers will be defined as those who are having less than 10 hectares of land. The final guidelines may retain the recommendation of the COS regarding self-certification by the company in regard to 50 per cent of the total FDI proposed by an investor in back-end infrastructure, but with a condition that the Government may go for surprise checks.
The final proposal is also likely to give some detail about the definition of ‘back-end infrastructure.’ It may say that cost of land and the building for a retail store will not be taken as investment in the back end infrastructure. Earlier, it was not clear what could be considered as back-end infrastructure.

To soothe the concerns of the electronics sector, the final guidelines may impose a condition such as, “for the purpose of investment in the back end infrastructure, any investment made in the processing, manufacturing or distribution would be counted.”
A senior Government official said that an increased FDI limit in single-brand retail may come with some riders. One of these could be mandatory 30 per cent sourcing from small and medium enterprises, as soon as the FDI limit exceeds 51 per cent. The Government allowed FDI in single-brand retail in February 2006. Till May this year, a total of $92.1 million was approved, but actual inflow has been just $69.26 million.