Latest Property News on 'Kolkata'

Meinhardt to invest 100 cr in 2012

Global engineering, infrastructure and project management consultancy firm, Meinhardt plans to invest over Rs 100 crore this year to increase its footprint in India.

Meinhardt will be increasing its presence in Kolkata, Mumbai and in a Southern city within a year. It has initiated talks to acquire a couple of consultancy firms engaged in water supply and sewerage space.

Talking about the firm’s plans for India Rajesh Srivastava, MD-Meinhardt India, said, “The growth curve of Indian economy is at an all-time high and contributing to the upswing is the Infrastructure sector in particular. Growth in this sector is driven primarily by globalisation of Indian corporate, growing presence of foreign businesses in India and rapidly increasing consumer class.

With major national and global players making large-scale investments, we have to play a major role to boost the development of infrastructure and thus construct a developed nation. We have over 400 engineers and architects in our offices in Delhi and Chennai. We plan to double the headcount and start operating from three other cities. A couple of acquisitions are also on the cards. All these will require over Rs 100 crore. We are currently talking to a company in South and also one in Delhi in the water supply and sewerage space. The deals are likely to be signed this year.

The cost of acquisitions might be more than Rs 50 crore.” The firm is providing engineering consulting services for some very key projects in Kolkata which includes tallest building in Kolkata, “Urbana-2″ which is 201 mt high ultra-luxurious residential project. They are also providing detailed engineering services to South City Residential Township, Kolkata, India’s largest township development, covering an area of 372,000 m² and featuring four towers, each 34 storey high. Providing structural, mechanical and engineering services to the splendid residential project in Kolkata, “Rosedale”.

Source: http://www.tribuneindia.com/2012/20120128/real.htm

Videocon arm to withdraw IT/ITeS SEZ project in Bengal

A Videocon group firm has approached the Centre to withdraw its IT/ITES SEZ project at Jalpaiguri due to “latest business outlook” in the northern region of West Bengal.

”…Now, the developer has requested for withdrawl of formal approval stating that the company is not able to implement the project owing to the latest business outlook of the region,” according to a Commerce Ministry document.

An inter-ministerial Board of Approval (BoA), chaired by Commerce Secretary Rahul Khullar, will consider this request on January 24.

The project was to be implemented by Videocon Realty and Infrastructure Ltd which had been granted a formal approval for setting up 10-hectare Special Economic Zone(SEZ). The preliminary approval was given in May 2009.

Even as Chief Minister Mamata Banerjee recently held a meeting in Kolkata with industrialists, several projects relating to steel and power are stuck in the state for different reasons including certain regulatory and land issues.

Infrastructure major Larsen and Toubro has also approached the Commerce Ministry to surrender its IT/ITeS SEZ which was to come up at Coimbatore in Tamil Nadu, due to “economic unviability” of the project.

“The developer has requested for de-notification of the SEZ…in the changed economic scenario,” the agenda papers of the BoA meeting said.

Besides, 11 developers including that of Parsvnath SEZ Ltd and Taneja Aerospace and Aviation Ltd have extension of time for execution of their projects.

However, India’s largest software firm, TCS remains bullish on the sector and has sought approval for its new SEZ project at Indore in Madhya Pradesh.

Source: http://www.thehindubusinessline.com/industry-and-economy/info-tech/article2808350.ece

Private equity funds like Kotak Realty Fund, Redfort Capital and IL&FS plan to exit large township projects

BANGALORE/KOLKATA: Private equity funds are trying to exit their investments in large integrated township developments where the projects have been stuck for lack of demand or clarity on approvals.

PE funds like Kotak Realty Fund, Redfort Capital and IL&FS, whose township projects have been stuck since they invested a few years ago, are now changing their investment strategies and are focussing on investing in short term, small format projects which will be completed in three to four years at the most.

“Township projects today offer limited scope. We now want to invest in projects spread over two-four million square feet with a smaller average ticket size of 100-250 crore,” says V Hari Krishna, director, Kotak Realty Fund.

In 2008, the realty fund from Kotak had invested in a 125-acre residential township project with Bangalore-based DivyaSree Developers in Chennai which was expected to start early this year. The fund had also picked up a 28% stake for 270 crore in Aavisa – an integrated township project being developed by IVRCL Assets & Holdings.

Redfort Capital’s three-year-old investment in two township projects promoted by Prestige Estates is in the process of aggregating land.

Integrated townships were the first category in real estate in which foreign direct investment was allowed by the Indian government in 2005. Private equity funds have invested $1.5 billion in township projects since 2006, says property consultancy firm DTZ.

“In 2007, integrated townships seemed to be the preferred investment option for private equity players in India due to their diversification benefits and low entry cost. But now many such investments are stuck due to execution and approval delays,” said Rajeev Bairathi, director, investment advisory at DTZ India.

London-listed Trinity Capital, whose investments are now managed by Indiareit Fund Advisors, has exited Rustomjee Evershine Global city township project by selling its 23% stake for 48 crore. It has also exited Rustomjee Group’s 127-acre integrated township in Thane by selling 16% stake to Keystone Realtors.

Source: http://economictimes.indiatimes.com/markets/real-estate/realty-trends/private-equity-funds-like-kotak-realty-fund-redfort-capital-and-ilfs-plan-to-exit-large-township-projects/articleshow/11519359.cms

Case filed against MIMEC for alleged real estate fraud

Case filed against MIMEC for alleged real estate fraud

KOLKATA, JAN 12: Five individuals, who had booked residential properties on the outskirts of Hyderabad, have moved a city court for an alleged fraud against MIMEC India Ltd.

According to MIMEC’s latest filings to the Registrar of Companies, Kolkata, three ITC associate companies – Russell Investments Ltd, Divya Management Ltd and Antrang Finance Ltd – jointly hold 1,64,509 shares of Rs 10 each, representing 79.86 per cent of the paid-up equity of 2,06,006 shares of MIMEC.

The 8th Metropolitan Magistrate’s court on November 22 took cognizance of the criminal complaints and issued order to begin proceedings against Kolkata-registered MIMEC and its directors under Sections 418/420/406 of CrPC.

The court also issued arrest warrants against the eight directors of MIMEC and two directors of a Hyderabad-based developer, for their alleged involvement in the case.

One of the MIMEC directors, Mr Jagdish Singh, obtained a stay on the proceeding for eight weeks from the Calcutta High Court on December 16. The High Court, however, asked Mr Singh to surrender before the Metropolitan Magistrate’s Court.

The High Court on December 20 further stayed the proceeding before the 8th Metropolitan Magistrate for 10 weeks.

In an e-mail response to Business Line’s queries, Mr S. Mukherjee, a director of MIMEC, confirmed the development. He, for and on behalf of the MIMEC Board, said: “Five criminal complaints, in the name of five different individuals but in identical language, have been filed against the Company and other parties including Mr J. Singh. Petitions challenging these complaints have been filed in the Hon’ble High Court of Calcutta on behalf of Mr Singh, and the court has stayed all further proceedings in these complaints.”

Meanwhile, in response to the Magistrate’s summons, Mr Singh appeared in the Magistrate’s court and obtained requisite legal relief in accordance with the usual procedure. “Since the matter is sub-judice, we are unable to comment any further, except to mention that the complaints are frivolous and vexatious”.

The complainants alleged that MIMEC in late 1980′s offered to sell plots in a 2,000-acre township project ‘Prakriti’ about 36 km away from Hyderabad on the N.H. No. 9. Petitioners allege that though payments were made in several instalments to MIMEC, the project never took off.

According to the petition in 2011 complainants learnt: “Either the entire or parts of project land under “Prakriti” had already been resold to several independent third parties including one Sri Sri Developers, who in turn have renamed the project or part thereof as “Rich Valley” and are re-selling plots to the general public at the rate of Rs 4,500 per Sq. Yd. and the same was done by Sri Sri Developers by issuing Brochures to the general public at large, with the active aid and assistance of the accused persons”.

Source: http://www.thehindubusinessline.com/companies/article2796090.ece?homepage=true&ref=wl_home

Retail realty commands unreal prices

Retail realty commands unreal prices

KOLKATA: Believe it or not, it is at least twice as expensive to lease retail space in Kolkata than Bangalore or Hyderabad. There are even instances of property in the city commanding as much rent as one in Mumbai or Delhi.

“I can get a retail property in Bangalore or Hyderabad for Rs 50/sq ft. But the situation is peculiar in the east. In a place like Patna, realtors are demanding Rs 100/sq ft. In Kolkata, it is obviously higher than that,” Reliance Trends senior vice-president (operations) Akhilesh Prasad said on Wednesday.

He was among several top officials of retail firms who came down heavily on artificially jacked up realty rates in Kolkata and rest of the east. Speaking at the East India Retail Summit, they said the deliberate cartelization of real estate players in the city kept other players out of the market and controlled the quantum of development in a manner that ensured the demand-supply situation was always skewed.

According to market trackers, lease rentals in Kolkata and its outskirts range from Rs 50/sq ft to Rs 350/sq ft with the average rate hovering around Rs 200. While vanilla stores in Garia go for Rs 50/sq ft, Forum Courtyard – the premium mall on Elgin Road – commands Rs 350/sq ft. The average rate in Mumbai and Delhi is around Rs 350 with some prime properties in the commercial capital going for as high as Rs 1,000/sq ft.

RP-Sanjeev Goenka Group general manager Sanjeev Mehra, who was earlier at the helm of South City Mall, pointed out that while real estate prices recorded a cyclical trend of hitting the roof and then bottoming out, it strangely remained firm all through in Kolkata. And this, he felt, affected growth of retail in the city and elsewhere in the region.

“We do not have enough brands in the city. We need to be more open and attract more brands to differentiate between malls,” he remarked.

Multiplex chain Cinepolis has been scouting for properties in the entire region but has had difficulty finding them. The company’s business development head, Bimal Sharma, felt the east would lose out if it did not get its real estate strategy straight.

Prasad agreed: “Retail growth in Kolkata is far behind other metros. The market exists but there is no real estate for retailers to move in. The city needs at least 20 more malls to be on a par with other cities in offering customers a proper retail experience. There is a crying need for quality retail space.”

Apparel firm Turtle’s chief strategist L Sridhar, too, felt the realty rates in Kolkata were a tad too high. “Compared to Hyderabad, real estate prices are at least 20% more in Kolkata. The only reason we will continue to invest here is because the growth prospect is very high in Kolkata,” he said.

A realty major acknowledged that prices in Kolkata were unnaturally high due to supply constraint but denied it was due to cartel. “There is collaboration in the market but I don’t think there is cartel formation. Rarely will you see five real estate players coming together to do a high-ticket project like it happens in Kolkata,” he said, referring to South City project on Anwar Shah Road and Urbana in Chowbagha.

The situation is further compounded by a high 95% occupancy at malls in the city. With only RPG Galleria under construction at present, the supply crunch situation will persist.

Source: http://timesofindia.indiatimes.com/city/kolkata/Retail-realty-commands-unreal-prices/articleshow/11454679.cms

Joseph Stiglitz for govt role in land acquisition

Kolkata: Nobel laureate in economics Joseph Stiglitz today said that State should have a role to play in acquiring large pieces of land for setting up industry.
“For those who want to acquire large tracts of land from fragmented ownership holdings, it is really a problem and land purchase becomes difficult,” Stiglitz said on the sidelines of a seminar at the Indian Statistical Institute (ISI) here.

The noted economist said this when pointed out that the present West Bengal government’s declared stand was that it would not acquire land for setting up industry.

He said that land acquisition was really a sensitive issue across the world.

Citing the instance of Columbia University in the US, where he is a professor, Stiglitz said that a huge amount of land was needed for expansion of the ‘varsity.

He said that the university was unable to acquire land on its own and the expansion process was halted. Ultimately, the local city government intervened arguing that it was in the interest of the people that the university expanded.
“Only then that the land acquisition process became a success,” he said.
Source: http://www.financialexpress.com/news/joseph-stiglitz-for-govt-role-in-land-acquisition/898560

Shrachi group fails to deliver on Kolkata luxury apartment project

The recent fire in the AMRI Hospital, which led to the loss of many lives, isn’t the only instance of one of its promoters, the Shrachi group, being under the scanner. A prominent Kolkata-based group, it has vast interests in real estate and hospitality. Take the instance of its ‘Rosedale’ condominiums, spread over 16 acres in Kolkata’s satellite township, New Town. The $100 million (over Rs 500 crore at current exchange rate) complex was proposed to be a showpiece real estate complex, promising swanky luxury apartments in six ‘ground-plus-25′ skyscrapers. The open-to-terrace apartments were priced between Rs 50 lakh and 1 crore each. Nearly four years down the line, the project remains a story of shattered dreams and broken promises, reports Business Line.

According to a petition filed (case no 240 of 2010) before the National Consumer Disputes Redressal Commission, New Delhi, 59 buyers, mostly NRIs, who were provisionally allotted apartments, allege non-delivery of the apartments well beyond the scheduled time frame of 36 months ending in 2010. It is alleged that the developer has “unilaterally” flouted agreements, made several amendments to the master plan of the project, leading to even violation of fire safety norms and reduction of common service areas for which payments were already received.

Home buyers say Rosedale built an additional 10-storey tower — having 80-100 apartments — in the promised common area, whose “interest has already been sold to the initial buyers” of the project. The petition also accuses the promoter of “premature money claims by furnishing false certificates.” Some of the petitioners claimed to have already paid 90 per cent of the committed sum. According to the report of a Calcutta High Court approved valuer and licensed building surveyor, Monojit De, appointed by the petitioners to look into the alleged anomalies; common areas and promised amenities to the buyers that include quarters for domestic helps, swimming pools and tennis courts were either reduced in size or removed.

There was an “infringement of the mandatory car parking space” rule. There were also deviations in the quality of promised building materials. The petition has demanded a total compensation claim of over Rs 17 crore.

Source:http://www.realtyplusmag.com/rpnewsletter/Fullstory_Newsletter.asp?news_id=17730&cat_id=1

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.

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.

Govt to Make Draft Real Estate Regulation Bill Public

The government will make public the draft Real Estate Regulation and Development Bill, 2011 for comments from stakeholders this week and may subsequently introduce it in the forthcoming winter session of Parliament. Aimed at protecting customers from fly-by-night developers, the draft Bill will seek to bring more transparency in the realty sector.

“We will upload the draft Bill on the Ministry’s website on November 11 for suggestions by public. After considering those suggestions, we are hopeful of introducing the bill during the winter session of Parliament,” Union Housing and Urban Poverty Alleviation Minister Kumari Selja said. While unveiling the new logo and brand identity of Confederation of Real Estate Developers’ Associations of India (CREDAI), she said the draft Bill has taken into account of the concerns raised by the builder community.

“The bill will be under the public domain for few days… We are also prepared to look into the suggestion of single window clearance system for realty projects wherever we can,” Selja said. Last week, she had said the Bill would protect the interest of consumers without hurting the real estate sector. “It will be a balanced kind of Bill, as on one hand we do not want consumers should be put into any difficulty (in real estate buying) and on the other hand, we definitely do not want to throttle the real estate industry. So it will be a balanced (one),” the minister had said.

Real estate developers led by CREDAI has been opposing the constitution of a regulatory body to supervise sector and said that it would become a “breeding ground for corruption” when implemented. They apprehended that the objective of the draft Bill was limited to just consumer protection, leaving other important issues such as long delay in approval and rising cost of material.
According to the draft, developers will need to make public disclosures related to land title, project completion date and other relevant scheme details on the website of the proposed regulatory authority. The disclosures must be made before launching a project, so that consumers are not taken for a ride at a later stage and the promoters will also have to register themselves with the regulatory authority.