Real Estate News Letter 7th Jun -13 Jun 2010

8/7/2019 Real Estate News Letter 7th Jun -13 Jun 2010

1/32

Real Estate News Letter

7th June to 13th June, 2010

For private circulation only


2/32

CONTENTS

1. Interest Rates2. Infrastructure

3. Industry News

4. Private Equity News

5. Regulatory Buzz

7. Land Deals

8. Residential

9. Commercial/ Retail

10. Township

11. SEZ

12. Hospitality

13. Input Cost

6. Public Markets


3/32

ICICI BANK COMES BACK WITH

TEASER HOME LOAN

ICICI Bank has reintroduced the special home loanscheme it had launched in April this year with fixedand floating rate options. The scheme is open fromJune 1 to June 30, 2010, and the bank will chargean interest rate of 8.25 percent in the first year and 9percent in the second. The bank has sent e-mails tocustomers about the special home loan scheme. Ithad withdrawn the scheme at the end of April.

Financial Chronicle, 8 June, 2010, Mumbai

nterest Rates

MAJOR BANKS BUILD UP HOME

LOAN MARKET SHARE

Even as growth in the home loan market stayed inthe single digit in 2009-10, larger banks managed toexpand their market share in this segment, byedging out smaller players.

The top 10 banks' home loan portfolio grew at 13.8percent for 2009-10, even as overall bank lending tohousing grew only 8 percent. State Bank of Indiasaw a 32 percent growth in its home loan portfolio

for 2009-10 and became the top mortgage lenderamong banks. The top ten banks garnered 65percent of the total outstanding housing loans (ofscheduled commercial banks) in 2009-10, up from61.5 percent last year.Housing loans were among the rapidly growingsegments of retail lending, which saw a tepid 4percent expansion in 2009-10.

The Hindu Business Line, 7 June, 2010,

HOME LOAN RATES LIKELY TORISE

Teaser home loan rates of some banks, includingState Bank of India (SBI), which charges only 8percent for the first year may rise, as Reserve Bankof India (RBI) has not allowed banks to lend belowthe base rate. While SBI indicated that its base rateis likely to be around 8 percent, for others banks therate will be 8.25-8.5 percent.

Business Standard, 7 June, 2010, Mumbai

TEASER LOANS MAY GETEXTENSION

Teaser loans that insulate home loan borrowersfrom interest rate fluctuations in the initial years ishere to stay with the countrys largest lenders

looking to increase their share in the lucrative homeloan market.

The Financial Express, 8 June, 2010, New Delhi


4/32

nfrastructure

METRO BOOST FOR WADALA ON

CARDS

Days after its Wadala plot got sold for a whoppingRs 4,050 crore, the Mumbai Metropolitan RegionalDevelopment Authority (MMRDA) is taking a keeninterest in developing Wadala by contemplatingproviding Metro connectivity for the suburb.

We are thinking of extending the Metro line up toWadala. One of the nine corridors in the pipelines isthe Ghatkopar-Mulund line which we can extend it

up to Wadala, said Metropolitan CommissionerRatnakar Gaikwad.

The MMRDA is constructing a nine-route Metro railacross Mumbai.

Hindustan Times, 7 June, 2010, Mumbai


5/32


6/32

ndustry News

This apart, realtors are looking opportunities in

areas like slum development, and expect theproblems of waterlogging to be a solved soon. Wehave great expectations from the new regime. Iexpect it to be proactive in reforming the wholeKMC, said Rungta.

Business Standard, 7 June, 2010, Delhi

REALTY PRICES IN MUMBAISEEN STABLE: LOKHANDWALA

CONSTRUCTIONReal estate prices are unlikely to witness acorrection and may remain stable at current level, asenior industry player said.

"Real estate prices are unlikely to decline but it willstabilise at the current level. The prices in Mumbaiare unlikely to correct due to scarcity of land,"Lokhandwala Construction's chief operating officer,Arshad Usmani, said here.

However, there may be some correction in prices inTier II cities, which have witnessed a sharp jump inreal estate prices, Usmani said.

The Economic Times, 7 June, 2010, Mumbai

Niranjan Hiranandani, MD,Hiranandani Group

'Home prices are shooting up due to overwhelming

demand'

The Hiranandani Group, one of the largest privately-held realty developers, recently announced a forayinto the power sector with a gas-based powerproject near Pune. In a chat with RaghavendraKamath, the group's co-founder and managingdirector, Niranjan Hiranandani, talks about thecompanys plans and the property market in thecountry. Edited excerpts:

Why did you go into power, when you could havegone into other related areas?

Actually, we were looking at an infrastructure area

such as roads, bridges and so on. We had alsozeroed in on a company to buy. When we weredoing our due diligence, we realised it was notworthwhile and dropped the idea. Then we thoughtof power as a second option and that's why we arehere. There are opportunities in multiple areas, butwe have limitations to execute these.

What are your plans in power? Will you also bedoing other power plants?First, we will do 400 Mw. Then we will ramp up to1,000 Mw and ultimately to 2,300 Mw. We have allprocesses, environmental clearances and rawmaterials in place. Now we are concentrating on thesingle plant and later we can look at multiple plants.

Have you tied up funds for this project?Up to 400 Mw, we can do on our own, with the helpof debt. After that, we have to look at externalsources, such as private equity (PE).

Why are you not looking at public markets to raisemoney for your property company?

There is a time and place for everybody. We stillhave sufficient money to do our projects. My brother,Surendra, has roped in PE investors in HiranandaniRealtors, which is doing projects in Chennai andother places. We have also fully invested the fund,which is listed on the AIM (Alternative InvestmentMarket) in London.

You were planning to develop five hotels in thecountry with an investment of Rs 650 crore. What isthe progress on that?

We are completing a 160-room hotel in Mumbai bySeptember. We have postponed the rest, asmarkets went down. Markets must justify theinvestment.

Don't you think home prices have shot up too fast intoo short a time and have become unaffordable forthe common man?It is bound to happen, when volumes are not enoughto meet the growing demand for homes. Supply hasto increase. More land has to be made available for

developers.


7/32

ndustry News

Dont you believe property developers have to be

blamed for the price rise?Everybody has to be blamed. Government,municipality, developers and so on. If so manypeople come to Mumbai, if you do not provide themhousing, either they will go to slums or the rates ofexisting properties will go up because ofoverwhelming demand.

Property consultants say home sales are down by20-30 per cent since the March quarter. What hasbeen your experience?Volumes have come down but it is very seasonal.On weekly and monthly positions there are hiccups,but on a six-month trend, there is a growth.

A lot of developers who have turned to affordableprojects during the slowdown are once againfocusing on premium housing. How do you look atit?One has to be there in the affordable segment tostay as a big player and generate big volumes. Byaffordable, I mean a house equivalent to four yearsincome. In the past 10 years, private developers

must have done 10 to 15 per cent of affordablehousing projects. I believe in the next 10 years, theywill do 50 per cent of these projects.

You were planning to launch affordable housingprojects by the end of 2009. What happened to that?We will do it. It is taking time to get the land togetherand obtaining permission


Property ads promising returns:buy at own risk

Invest Rs10.8 lakh in a fully furnished five-star flat.Get Rs13,000 per month return till possession andlease it out at Rs18,000 per month after pos-session. Does that sound familiar? In allprobability, you may have received an SMS claimingto give you such a deal or read an advertisementsomewhere in a newspaper.

Own a property and get assured returns, in most

cases, higher than what a regular bank fixed deposit

would give you. If it were really true, what morewould you ask for. Mint Money read the fine print foryou to ex- plain how such schemes work andassess whether it makes sense for you to go forthem.What's the scheme?

To avail this scheme, being offered by only a fewdevelopers in north India, you need to sign anagreement with the developer specifying themonthly return you would get till you get pos-session of the property at an agreed rate of interest.

Before possession: The developer gives you post-dated cheques for a specified period for yourmonthly returns. At the end of this period, if the con-struction is not over, you will get another set of post-dated cheques. Usually, developers give 12cheques in advance. Af- ter a year, they will giveyou another set of 12 cheques.

During the agreement period, it's the developer'sresponsibili- ty to maintain the premises and keep it

clean.

After possession: Once you get the possession ofthe property, you can either exit the project orcontinue with the agreement.

In case you decide to contin- ue with the contract,the property is further leased out to some tenant.Says Vikas Gupta, director, Earth InfrastructureLtd, a Delhi-based developer: The developer willfind a tenant for you or you decide to sell the

property at a premium or you set your own businessin that space. Often, the developer signs theagreement with the owner for two to three years af-ter the date of possession. The developer finds atenant for the space on a rent-sharing agreement.

So, how long would you have to remain in thisagreement after possession? There is no lock-inperiod, but generally we try to sign an agreement forthe next two years after possession, says Gupta.

Earth Infrastructure, for instance, has a tie-up of 51months, including 27 months of construction, with its


8/32

ndustry News

buyers for one of its commercial complexes

coming up at Knowledge Park 5 in Greater Noida.

The process is the same for such offers across allproperty categories. However, in case of serviceapartment projects, the lock-in period is usuallyhigher.Service apartments are meant for businesstravellers and tour- ists.

Says Anil Sharma, chairman, Amrapali Group,which ran these schemes on two of its projects:These schemes have been widely used forcommer- cial projects till date. Major developers hadsuch schemes in the past. This gives them thenecessary cash to complete the project and thebuyer gets healthy returns. Can you renewcontract?

Once the agreement gets over, you have the optionof re- newing the contract. Says Sunil KumarDahiya, managing director, VigneshwaraDevelopers, a Delhi-based developer, Usual- ly, itis profitable to renew the contract as the property by

then matures and the rental return, too, increases.

Developers usually fix the rate of rental return at thetime of signing the contract for the term afterpossession. This is in the range of 13-18%. This ratemay go up if the project looks up and, thereby,increase your rental income. However, getting yourown tenant may work bet- ter for you since if yourenew the contract, you will have to share the rentwith the developer.

Apart from the clear advan- tage of increased rentalreturn, the value of property increases at this stage.Price escalates at the time of the completion of theproperty, says Amit Goen- ka, national director(capital transactions), Knight Frank In- dia Pvt. Ltd, aproperty consult- ing firm.The caveats They say you need to give some totake some. So, to get monthly assured returns, youneed to agree to certain terms and conditions of thedeveloper and come to terms with some risks.

Live Mint, 8 June, 2010, Mumbai

PAREKH: BREAK NEXUS OF

BUILDERS, POLITICIANS

Warning that a nexus between builders andpoliticians was behind high real estate prices, HDFCchairman Deepak Parekh on Monday asked thegovernment to break it and make it easier for thecommon man to buy a home. I think scarcitycreates more value and scarcity keeps prices upand there is nexus between developers, buildersand politicians. The number of approvals that areneeded if you have the land and you want to build

on your own, it will be nightmare to get these, hesaid.

The Indian Express, 8 June, 2010, Mumbai

REDEVELOPMENT IN CROWDEDMUMBAI A FILLIP FOR REALTY

Greater clarity in rules and pressing need for morehouses in land-starved cities like Mumbai has had

builders eyeing opportunities for redevelopmentafter a 2-year market slump and recession.

"Now we have the opportunity to do largeredevelopment projects, as the policy onredevelopment has been clarified. We are hopefulthat within the next six months, we will announcefew large redevelopment projects," Godrej GroupChairman Adi Godrej said.

Besides Godrej realty unit, Godrej Properties,Housing Development and Infrastructure, DBRealty, Ackruti City and the unlisted ShapoorjiPallonji & Co and Kumar Urban Developers arechasing redevelopment contracts.


REALTORS EYE SMALL CITIESFOR MORE GAIN

As buyers in metros turn wary of rising home prices,

developers are turning their focus to Tier- II and


9/32

ndustry News

Tier- III cities where the margins are good and

demand high.

Developing smaller cities always have goodpotential for realty developers and many of the topdevelopers had projects planned in these cities. Butbecause of the slowdown, the projects were eitherscrapped or delayed. Now that the economy isimproving developers are once again focusing onthese smaller towns, says Anurag Mathur,managing director, Cushman and Wakefield India, aglobal realty consultancy.

Most major developers are lining up projects inthese cities. Omaxe has shifted its focus to smallercities. Ansal Properties, too, is focusing on smallercities like Meerut and Agra. Even the metro player,DLF, is now exploring smaller cities.

Mail Today, 8 June, 2010, Delhi

Chavan to decide on FSI forDharavi redevpt plan

Chief minister Ashok Chavan reviewed the p ro p os e d Dharavi redeve l o p m e n t project inMantralaya on Monday.

The project, aiming to turn Asias largest slum into acommercial and residential hub, has been stalled forseveral years. According to senior Mantralayaofficials from the housing department, in themeeting, Chavan asked for options available withthe government if private bidders failed to turn up for

redeveloping the project. The delay in taking a finaldecision and a slump in the property prices maymake the project unviable for bidders. Of a total of19 bidders, only seven are still in the race to developthe project, the official said. He added that theoption of Maharashtra housing and areadevelopment authority (Mhada) developing theproject was also discussed.

IfMhada develops the project, the state will not getthe premium that it would have got from privatebidders, he said, adding, The state plans to dividethe project into five zones of about 30 hectares

each. The administration is considering developing

Sector 5 first but no conclusive decision has beentaken in connection to the issue. The meetingchaired by Chavan was attended by T C Benjamin(principal secretary, Urban Development), SitaramKunte (secretary, Housing) and Mhada CEOGautam Chatterjee.

Meanwhile, the states proposal to give an FSI of 4for redevelopment will be forwarded to the CM forhis approval. The proposal seeking permission togive FSI of 4 for the project will be put up before thestate in a day or two, said Benjamin. There aredifferent kinds of land use and differential FSI inDharavi. For private and open land, the FSI cap is1.33 and the same for government properties is3.11.

The Times of India, 8 June, 2010, Mumbai

STREET SMART IN TOUGH TIMES

Indias high net worth individuals are heavy on goldand real estate but have kept currency out of theirinvestment plans as they look beyond equities tomaximise their returns. Other than going long ongold and cutting deals in the real estate space theyhave entered the private equity space. Some of theirmore defensive strategies include investing in short-term debt instruments and structured products withcapital protection.

HNIs are tapping opportunities in the realty space incountries like the US, UK and Singapore. Some areeven scouting for houses in debt-ridden Spain and

Greece, part of euro zone. This is because manyhouses abroad have become dirt-cheap after thefinancial meltdown. In the US, some houses pricedat half a million dollars in 2006-07 are now availablearound $200,000. Many HNIs with children studyingin the US are used to paying $2,000-3,000 permonth on rents; so they are sayingwhy not buy ahouse, says Maneesh Kumar, MD, Burgeon WealthAdvisors. Under the Liberalised Remittance Schemeof RBI, every resident individual can remit up to$200,000 overseas every year.

The Financial Express, 9 June, 2010, Mumbai


10/32

ndustry News

PROPERTY PRICES UP 54

PERCENTProperty prices in the national capital region (NCR)has increased by up to 54 per cent during the firstthree month of this year due to higher demand,according to a study conducted by realty portal99acres.com.

Gurgaon's Golf Course Road and Sohna Road haveseen the highest appreciation in prices with 54 percent and 43 per cent jump during January-March

quarter, respectively, compared to the year-agoperiod.

99acres.com Business Head Vineet Singh said instatement. The national capital region (NCR) regionhas always been an attractive destination for buyersas it provides high return on investments, he added.

The Financial Express, 9 June, 2010, New Delhi

AFFORDABLE HOUSING

PROJECTS HASTEN RECOVERYIN REALTY

The flexibility shown by developers in convertingluxurious residential projects into smaller,inexpensive ones have helped the realty sector inmany parts of India recover fast from last yearsslump.

This time, residential real estate demand did not letthe global slump affect the Indian market (for toolong), said Anshuman Magazine, chairman andmanaging director, CB Richard Ellis South Asia Pvt.Ltd, a property consultancy.

Ashutosh Limaye, associate director of strategicconsulting at property consultants Jones LangLaSalle Meghraj, said this happened becausedevelopers decided to reformat their large, luxuriousprojects to build smaller apartments at reducedprices.

For instance, Grande, which had been launched as

an ultra-luxury residential project in Noida, was

relaunched by its developer Unitech Ltdnow with amajor portion converted into smaller flats availableat discounted rates.

Similarly, Gaursons India Ltd reformatted luxuryapartments at a project in Indirapuram inGhaziabad, on the outskirts of New Delhi, reducingtheir sizes and selling them at lower prices. Anddevelopers Vipul Group relaunched Vipul Gardensat Dharuhera, near Gurgaon, with smaller, cheaperapartments. Experts said most of the launches in thelatter half of 2009 were in the affordable housingsegment.

A key reason for their emergence is the fact thatthere are no entry barriers for these developers,said Anand Narayanan, national director, residentialagency at Knight Frank India Pvt. Ltd, a propertyresearch firm. And in a corrected market, severalsmaller developers started offering apartments atdiscounted rates.

Live Mint, 9 June, 2010, New Delhi

Retirement complexes gainground growing number of agedmakes such projects viableeconomically

lHarpal Singh, mentor and chairman emeritus ofFortis Healthcare, and Deepak Nirula, the erstwhilemanaging director of restaurant chain Nirulas, haveset up Impact Senior Living Estates (ISLE), acompany that develops specialised housing forsenior citizens at Amritsar, Rajgarh (HimachalPradesh) and the NCR.lChennai-based realtor Baba Shankar has foundedClasic Kudumbam, a retirement communitydevelopment in Chennai.

lLIC HFL Care Homes operates a retirement villagein Bangalore and plans to take it national.

lMumbai-based NGO Dignity Foundation has

developed a retirement township over 25 acres atNeral (an extended central suburb of Mumbai).


11/32

ndustry News

lDelhi-based realtor, Ashiana Housing, operates a

chain of retirement resorts christened Utsav inBhiwadi, Jaipur and now at Lavasa in Pune.

lGoa-based diversified entity Acron Group, withinterests in realty, infrastructure, hospitality andretail, will launch a 56-appartment retirementcomplex at Baga beach in three months.

All these examples show that the idea of havingretirement homes, which is a popular concept indeveloped countries, is catching up with corporate

India, particularly real estate companies.

Such a move makes economic sense, consideringthe rising number of the aged who are financiallysound.A recent report by Jones Lang LaSalle Meghraj(JLLM) said there are over 81 million elderly peoplein India. It is expected that by 2025 this figure willbe 177 million and by 2050, about 240 million, ormore than one in five persons, will be seniorcitizens, the report said.

Saumyajit Roy, associate vice-president (seniorliving), JLLM, said senior citizens are no longerconsidered withdrawn, risk averse and financiallydependent. The immense potential of this segment,with its unique needs and promises, offers an arrayof opportunities to the Indian real estate market, hesaid.

John Britto, director, Acron Group, said theres a bigmarket for companies catering to the retiredprovided they have a right mix of housing productsand specialised support and lifestyle services.

While there are old age homes run by charitableinstitutions / NGOs catering to the particular strata ofthe society, the concept of a lifestyle senior livingcommunity is still in its infancy in India. There is asignificant percentage of the existing and would besenior citizens who are accustomed to a certain wayof living and would want to maintain that qualitylifestyle minus the routine hassles, said Britto.

The company plans to invest Rs 150-200 crore to

set up retirement complexes in 10 locations,

including Kerala, Coorg and Pondicherry.

Pranay Vakil, chairman, Knight Frank India, saidparents living separately is no longer beingconsidered a stigma. Companies are targetingpeople who believe in lifestyle living. These areelderly citizens whose sons and daughters are well-settled in their personal and professional lives andare living separately (within India or overseas).These are people who are financially well-off andwould want a more comfortable life with the sameage group, he said.

Most of these retirement complexes offer the best ofhealthcare, security and wellness features, with afocus on the elderly. For instance, there are grabrails in bathrooms, hallways and stairs, seats nearlifts, anti-skid tiles in bathrooms and kitchens, andemergency alarm buttons within the dwelling unit.

But these facilities do not come cheap. For instance,Utsavs Lavasa project costs between Rs 27 lakh fora 915 sq ft (chargeable area) 1BHK to Rs 82 lakh for

a 2,430 sq ft (chargeable area) for 3BHK duplexvilla. Maintenance and parking is over and abovethe cost of the apartment.

Companies also offer lifetime lease option. The newentrant Acron is pursuing the long-term lease model.Its apartments can be leased for 20 years with aminimum lock-in of 12 months. The one-time depositfor a 1BHK apartment is Rs 20 lakh (fully refundablewith an option of capital appreciation). There is alsoa monthly rental charge of Rs 8,000 towards

maintenance and upkeep of the residentialcommunity.

DNA, 9 June, 2010, Mumbai

REAL ESTATE TRANSACTIONWEBSITE LAUNCHED

Tian Constructions, a real estate firm in the city, hasannounced the launch of its web-based real estatetransaction website (www.tain-con.com).


12/32

ndustry News

The transaction website is the one-point contact forthe investor for all buying solutions. The customer

can customise their residential units simultaneouslyviewing its cost implications. They have theopportunity to choose the layouts according to theirbudgets. From simple bathroom fittings, colour ofthe tiles to the number of rooms. It acts like adecision-making tool, stated a release issued by thecompany.

The Indian Express, 10 June, 2010, Pune


13/32

Private Equity News

IL&FS MILESTONE BUYS 74

PERCENT IN HCC PROJECT FORRS 574 CRORE

IL&FS Milestone Realty Advisors, a joint venturebetween Milestone Capital Advisors and IL&FSInvestment Managers, has acquired a 74 percentstake in 247 HCC Park for Rs 574 crore from theHindustan Construction Company Group. Thecommercial property of 18-lakh sq. ft at Vikhroli innortheast Mumbai is valued at Rs 775 crore

(enterprise value). IL&FS Realty Advisors said thearea under investment was 11-lakh sq. ft.

Ashish Joshi, Managing Partner of Real Estate,Milestone Capital, said the investment was througha real estate investment trust modelled fund of Rs500 crore, besides two other funds. The averagelock-in period for the closed-ended funds was four tosix years. The ticket size of the fund was Rs 10 lakhfor individuals and Rs 25 lakh for institutionalinvestors.

Ved Prakash Arya, managing director and chiefexecutive officer, Milestone Group, said, In thecurrent scenario, there is a supply overdose for allkinds of commercial properties and we were on thelook out for properties with stable rentals rather thanunnaturally high rentals which can lead to artificialyield assumptions.

The Hindu, 11 June, 2010, Mumbai


14/32

geography.

CCI is learnt to have prima facie found that DLFhad abused its dominant market position and theagreement was "one-sided" in nature and therewere "variations from the initial stipulations".

CCI, sources said, could also look into similarpractices by other developers.

The commission, which became fully functional lastJuly, is empowered by an Act of Parliament topenalise the guilty or ban a prevalent malpractice.The commission sources said it was more of anindustry issue and buyers in general, were facingsuch problems, irrespective of any specificdeveloper. It is, therefore, appropriate to look intothe general practice, along with specific complaints

Business Standard, 7 June, 2010, Delhi

GOVT TO APPEAL AGAINST HCSTAY ON SERVICE TAX ON

RENTALS

The Indian government will appeal against a Delhihigh court order that asked the government not tolevy service tax on rentals of commercial property.The high court on 18 May stopped the government'smove in a temporary order on a petition filed byFuture Group's unit Home Solutions Retail India Ltd.Many other retailers are also moving court in thismatter.

Petitions are coming every day. We will definitelyfile an appeal, said a lawyer representing thegovernment on the Home Solutions Retail case.Nearly 30 firms have filed for a stay on the servicetax being levied after Home Solutions Retail securedthe injunction in May, says Rishi Agrawala, a lawyerrepresenting the store operator. Agrawala is nowrepresenting a dozen such clients that include Tatagroup's Trent Ltd and Infiniti Retail Ltd, Dubai-based Lifestyle International and department storeoperator Shoppers Stop Ltd.

Live Mint, 7 June, 2010, New Delhi

Regulatory Buzz

REALTY FIRMS COME UNDER CCI

SCANNER

The commission plans to probe complaints againstDLF.

In a bid to check the rampant malpractices in therealty sector, the Competition Commission of India(CCI) has decided to, on its accord, enquire ifvarious developers are misleading the buyers, apartfrom looking into specific complaints against themarket leader, DLF.

Taking note of the general complaint of delayedpossession, change in terms and conditions of saleagreements and developers making it almostimpossible for a customer to opt out, CCI has alsodecided to look into complaints of misleadingadvertisements, a CCI source said.

On the basis of complaints from individuals whohave booked flats from various developers, CCI hasreferred the complaints against DLF to the director

general-investigations for a probe, the source said.

When contacted, DLF officials declined to commentsaying they had not received any notice from CCI, amarket watchdog created to check abuse of marketdominance.

We have not received any letter from CCI in thisregard so far. Therefore, we would not like tocomment on this matter, without knowing the exactnature of the complaint, a DLF spokesperson said.

According to one such complaint, DLF had promisedto complete its Blair residential project in Gurgaon in2009, but the buyers are yet to get possession.

Another individual has alleged DLF had initiallyannounced a project as an 18-floor apartment, butlater on added 10 storeys without informing thebuyers.

These complaints were admitted under Section 4 ofthe Competition Act of 2002, which pertains toabuse of dominance by a player in a relevant


15/32

GOVT AGREES TO CUT DOWN

STAMP DUTY

The state government has in principle agreed toreduce stamp duty from 7 percent to 5 percent aftertaking into consideration various factors, includingthe enhancement of land value in commercial areasand tier-II cities across the state.

Stamps minister Gade Venkat Reddy said onWednesday that officials of the stamps & registrationdepartment were readying proposals to reduce the

stamp duty keeping in mind the revenue targets setfor the department in the budget.

The minister said the registration charges wereperiodically reduced from 13.5 percent to 11 percentand then to 9.5 percent since August 2005 underpressure from the Centre, which wanted a uniformstamp duty of 5 percent across the country.

The Times of India, 10 June, 2010, Hyderabad

New real estate exposure normsfor urban co-op banks

Reserve Bank of India has revised the norms forurban cooperative banks for giving loans to thehousing and real estate (RE) segment.Working capital loans to small contractors againsthypothecation of construction material are exemptedfrom the existing norms that allows UCBs to use 15per cent of the total deposits for giving loans forhousing and commercial real estate, RBI said.In a communication to chief executive officers ofUCBs, RBI said it has fine-tuned the rule foraggregate limit for housing finance. Now, urbanbanks can use up to 15 per cent of deposits toprovide housing, real estate and CRE loans.Earlier, the RBI norm permitted them to use up to 15per cent of deposits for giving advances to housingloans and other block capital loans.The 15 per cent ceiling was reckoned on totaldeposits at the end of March 31 of the previousfinancial year. The exposure to compute the ceiling

will include fund and non-fund based facilities

Regulatory Buzz

BUYING PROPERTY MAY GET

MORE EXPENSIVE

Brace yourself to shell out more for purchasingproperty in the national Capital. After increasing theregistration fee for properties and road tax for luxurycars, the Delhi Cabinet is set to give its nod to aproposal to hike circle rates for sale and purchase ofproperties in the capital on Monday.

In order to meet the expenses and deficits, the DelhiGovernment is likely to increase the circle rate of

properties ranging from 30 percent to 150 percent.The new circle rates will be fixed according to theproperties falling under various categories. Thecircle rate of properties is the system in which theGovernment fixes the minimum or maximum rate ofthe land depending on the categories of colonies itfalls in.As per the proposed circle rates, Rs 1.25 lakh is

proposed for colonies falling under category A whileRs 1 lakh per sqm for category B colonies. Both Aand B colonies are posh colonies divided into rich

and super rich categories, the two new categoriesadded this time.

The Pioneer, 7 June, 2010, New Delhi

PROPERTY TITLING BILL HITSHURDLE

The Delhi government will have to carry out freshdrafting exercise for its Property Titling Bill, as theCentral government has asked all stategovernments to model their respective legislativeproposals on the Model Land Titling Bill, 2010.

The city government, after completing all exerciseby seeking public feedback, had drafted its DelhiUrban Property Bill, 2010, which was to be sent tothe Union government for approval.

The Asian Age, 7 June, 2010, New Delhi


16/32

HC FLOORS MAHARASHTRA ON

FSI

The Bombay High Court on Thursday dismissed aMaharashtra government decision that would haveallowed more building activity in the suburbs ofMumbai. The court set aside the permission givenby the state government to increase floor spaceindex (FSI) from 1 to 1.33. A higher ratio allowsmore construction in the same plot.

Jones Lang Lasalle Meghrajs Joy Sanyal said

apartment prices would climb. Surjeet Pal of ElaraCapital added that developers will have to reworkcosts of projects in suburbs and prices will mostlikely rise since projects had been planned with 1.33FSI in mind. Affordable housing may also take ahit, he said.

The Financial Express, 11 June, 2010, Mumbai

Regulatory Buzz

extended to customers.

Many urban banks and federation of cooperativebanks had approached the central bank forclarification on norms that restricts exposure to realestate including housing loan and commercial realtyto 15 per cent of deposit base.


LAND REGISTRATION FEE TO COME DOWN

After wavering for months, the State governmenthas finally decided to reduce registration chargesfrom 9.5 percent to 5 percent in urban areas incompliance with the condition laid by the CentralGovernment to be eligible to receive funds underJawaharlal Nehru National Urban Renewal Mission(JNNURM).

Disclosing this at a media conference here onWednesday, Minister for Endowments, Stamps &Registration Gade Venkat Reddy said the date fromwhich the reduction of the fee would beimplemented, would be announced soon.

Officials have been asked to work out details of theloss to the exchequer due to this reduction ascompared to the additional funds expected from theCentre under JNNURM, the Minister added.

The Hindu, 10 June, 2010, Hyderabad

TAX LIABILITY SET TO RISE FORREDEVELOPED BUILDINGS

The tax liabilities of redeveloped housing societies

are set to skyrocket after the Bombay high courtupheld a new rule allowing I-T authorities tocalculate capital gains tax based on stamp duty paidon the development agreement.A division bench of Justices F I Rebello and AmjadSayed dismissed the petition filed by Bhatia NagarCooperative Society in Kandivli (west), claiming thatunder the new rule, its tax liability had shot up to Rs1.91 crore from a little less than Rs 50 lakh after itsredevelopment agreement with Ankur Realty, whichpaid

The Times of India, 10 June, 2010, Mumbai


17/32

Public Markets

SATRA PROPERTIES NET RISES

TO RS 9 CRORE

Satra Properties has reported that its net profit in thefinancial year 2009-10 has risen over four times toRs 9 crore (Rs 2 crore) on revenue of Rs 206 crore(Rs 106 crore). Praful N. Satra, Chairman andManaging Director, Satra Properties, said the newprojects being undertaken by the company willimprove the financial performance in the comingdays.

The Hindu Business Line, 8 June, 2010, Mumbai

MARATHON FY10 NET ZOOMS

Marathon NextGen Realty has clocked a 251percent vault in its net profit to Rs 146.7 crore inFY10 against Rs 41.8 crore in the previous fiscal. Itstotal income rose to Rs 250 crore in FY10 againstRs 131 crore the previous year. The companyannounced a dividend of 35 percent, inclusive of aninterim dividend of 15 percent already paid, and a

one-time special dividend of Rs 1.50 per share. Inthe fourth quarter net profit rose to Rs 47.86 crorefrom Rs 9.64 crore a year ago.


Unitech Infra eyes Rs 2,200 croreconstruction orders this fiscal

Listing likely by year end

Unitech Infra, the demerged entity of Unitech, thesecond-largest real estate developer in the country,is looking at an order-book of Rs 2,200 crore fromjust the construction business this fiscal.

The new entity will have an order-book of about 14million square feet (msf) for the constructionbusiness, primarily from Unitech. The real estatedeveloper will use its existing relationships to getlarge government and private contracts awarded to

Unitech Infra.

Unitech had said it has about 35 msf under

construction and plans to undertake aggressivelaunches. It plans to award most of the constructionprojects to Unitech Infra.

Unitech is expecting to list the infrastructurebusiness before the end of calendar year 2010. Theinfrastructure firm would pursue build-operate-transfer (BOT) opportunities in the highway andpower transmission sectors. It intends to generateand distribute captive power within the existing andfuture developments of its parent firm.

The New Delhi-based Unitech Infra has an order-book of about Rs 500 crore from the powertransmission business. Unitech spokesperson wasnot immediately available to comment.

The demerger is aimed at increasing the focus onthe companys infrastructure businesses andproviding significant financing flexibility for theinfrastructure projects in terms of access to longer-term and cheaper financing as compared to realestate projects.

The company is also expecting the area undermanagement for the facilities and propertymanagement services to increase from 10.3 msf infiscal 2010 to 35 msf by 2013 and to 50 msf by2015. Unitech Infra has valued itself at about Rs5,000 crore, based on assets it owns and has a debtof Rs 350 crore, which gives it a low leverage.However, the final valuation is underway andfinancial details would be available after it getsapprovals from regulatory bodies.

DNA, 9 June, 2010, New Delhi

ORBIT BETS ON ACQUISITIONSTO PROPEL GROWTH

Orbit Corp. Ltd is buying three plots on southMumbais posh Napean Sea Road for about Rs350crore for its first block redevelopment project in thetony neighbourhood. The three sea-facing plots withold buildings on them will be consolidated for aluxury housing project, generating 300,000 sq. ft of


18/32

Public Markets

saleable area to be priced at Rs 50,000-60,000 per

sq. ft.

The Mumbai-centric developer, known for itsupscale residential projects, is also acquiring thepalatial Kilachand bungalow in the same area toredevelop it into a luxury residence. Orbit is in thefinal lap of raising Rs 350 crore from a private equityfund for the project.

Though there is a potential problem of supplyoverhang of luxury projects in central Mumbai areassuch as Lower Parel, there is huge demand for suchhigh-end residential developments in south Mumbaibecause supply is restricted, said AnandNarayanan, national director, residential agency,Knight Frank India, a property advisory.

Consultancy firms Jones Lang LaSalle Meghraj andKnight Frank India have estimated that around 7,000luxury apartments will be sold within a year inMumbai, with each unit priced at more than Rs4.7crore, PTI reported in April. Another 400 units in theRs1 crore-plus bracket are expected to come up in

Bangalore.

Live Mint, 10 June, 2010,

DLF presages operating surplus ofRs 2,500 cr

Targets sales booking of 18 msf this fiscal over 12.6msf in fiscal 2010

DLF Ltd, the largest real estate developer in thecountry by market capitalisation, is looking to endthe year with operating cash surplus of Rs 2,500crore, as it looks to raise Rs 2,700 crore throughnon-core asset sales and healthy cash flows.

The developer is also looking at sales booking of 15-18 million square feet (msf) this fiscal as against12.6 msf last fiscal. It will launch about 1-1.5 msf ofthe 4.5 msf luxury project at NTC mill in Mumbaiaround September, but necessary approvals are stillawaited.

The residential launches would be a mix of luxury,

mid-income and affordable housing and would beprimarily launched in the national capital region,Mumbai and Chennai. It recently sold 2 msf inChandigarh.DLF spokesperson was not immediately available

to comment on the developments.DLF had decided to raise Rs 5,500 crore last fiscal

via sale of non-core assets, but was able to raiseonly Rs 1,800 crore. It will raise funds from land saleat Dwarka, Delhi, for Rs 800 crore and Tidco inTamil Nadu for Rs 900 crore.Chetan Majithia, analyst with Crisil, in a note to

clients, said, DLF had planned to divest its non-coreassets and use the cash to lower its debt. Thecompany expected divestments to generate cash ofRs 5,500 crore in the fiscal 2010. However, thecompany was able to monetise only Rs 1,800 croreduring the year. Less-than-expected divestment ofnon-core assets resulted in lower repayment of debtin fiscal 2010. This led to higher-than-expectedinterest costs.

DLF is also looking to retire over Rs 5,000 crore

outstanding debt in 2010 by cash flows and assetsales. The realtor has a mandatory debt repaymentof Rs 2,600 crore in 2011.

The New Delhi-based company seeks to bring itsdebt equity ratio to 0.5 by 2011-end through debtretirement. It currently has gross debt of Rs 21,700crore and over .8 gross debt-equity ratio. It repaidabout Rs 5,600 crore last year against mandatoryrepayment of Rs 3,549 crore.The company is also seeing increased commercial

leasing enquiries in Hyderabad, Chennai, Pune andGurgaon, but actual transactions have not picked upat the same pace. Enquiries are coming in fromsectors such as BFSI, IT, KPOs and BPOs.The realtor leased 0.76 msf last year and is looking

to lease out at least 1 msf per quarter. It earnedrentals of Rs 750 crore last year and is looking atrentals of Rs 1,600 crore in 2011. The Singaporelisting of its subsidiary DAL would materialise oncethe substantial portion of the portfolio is leased outwhich currently is at 6 msf out of the total 13 msf.

DNA, 10 June, 2010, New Delhi


19/32

Days the National Textiles Corporation (NTC)

announced its decision to auction a prime piece ofland in central Mumbai, chief minister AshokChavan has knocked on the doors of Union textilesminister Dayanidhi Maran, requesting transfer of theland to Mhada for construction of affordable houses.

We will pay the reserved price of Rs 750 crore tothe NTC. Kindly, stay the bidding process andconsider the proposal to transfer the land of Bharattextile mills at the reserved price to Mhada, Chavansaid in a letter to Maran.

A day after the NTC published an advertisement forsale of land in Worli, housing secretary SitaramKunte and Mhada managing director GautamChatterjee swung into action. Chatterjee submitted acomprehensive proposal to NTC chairman andmanaging director K Ramchandra Pillai. We feltthat since NTC is owned by the Centre and Mhadais controlled by the state government, it will beappropriate for NTC to transfer the land to Mhada atthe reserved price, a senior official said.

So far, NTC has auctioned its prime lands inMumbai to leading developersDLF for Rs 702crore, Lodha for Rs 180 crore and Kohinoor for Rs421 crore.If Chavan succeeds, then the Mhada will be able toconstruct well over 5,000 flats on the NTC land. Wepropose to develop it as a special project. As aresult, we will get an FSI of 4. We plan to constructflats for mill workers, lower, middle and higherincome groups. If we succeed, we will be able toregulate real estate prices in the area, he said.

As on January 1, 2010, we need 25 lakh flats inMaharashtra, while Mumbai needs 13 lakh flats.Due to non-availability of land, we are unable tomeet the demand and builders are taking advantageof the situation. It was felt that Mhada shouldprocure the NTC land to meet the demand foraffordable houses, he said. The official made itclear that as per the Mhada Act, it was well withinthe powers of Mhada to procure land from the openmarket.

Times of India, 10 June, 2010, Mumbai

Land

LODHA EXPECTS WINDFALL

FROM WADALA PLOT

Abhisheck Lodha joined family-run real estatecompany Lodha Developers Ltd in 2003 after a stintwith McKinsey and Co. The Mumbai-based firmrecently bought a 6.1 acre (25,000 sq. m) plot inWadala in central Mumbai for Rs 4,053 crore,beating companies such as Indiabulls Real EstateLtd and Reliance Infrastructure Ltd. Next week,Lodha is to announce plans for what it calls theworlds tallest residential tower. We have made

some right calls and are lucky to have good people,said the companys 30-year-old managing director inan interview.

Edited excerpts:

Lets start with the deal that everyones talkingabout. How do you justify the price you paid?

The latest land sale by the MMRDA (MumbaiMetropolitan Region Development Authority) in

Wadala, which has an FSI (floor space index) ofabout 55-lakh sq. ft and a total developable area of80 lakh sq. ft is by far the largest development inMumbai.

Given the supply demand economics in Mumbai, wefeel it is a very attractive proposition to have such alarge, clean piece of land available in the city,catering to a target audience who can pay Rs1-2.5crore per flat. This particular location is getting greatconnectivityboth the headquarters of the monorail

and the metro rail are coming here plus the newEastern Seaboard Express (Highway) from PrinceCharles Museum, all the way to Chembur, passesthrough this side.

Live Mint, 7 June, 2010, Mumbai

CM wants NTC plot for Mhada

Urges Centre To Give 8-Acre Plot For Low-CostHsg Project


20/32


21/32

Residential

Worlds tallest residences will

be in Lower Parel

Lodha launching project on 17.5 acres in ShrinivasMills compound

A Dubai-based Gujarati-Jain business family withinterests in real estate, shipping and logistics ownstwo apartments above the 65th floor of Burj Khalifa,the tallest residential-cum-mixed-use tower in theworld, currently at 828 metres. A family member

graciously proffered his visiting card when thecorrespondent was visiting in January. The addresson it was, inevitably, highlighted.

Incidentally, the top penthouse in Burj Khalifa is alsoowned by another Indian.

Now, Lodha group, the Mumbai-based developer, isgiving such connoisseurs of the skies a desi optionbang in the middle of the metropolis.

It is launching the worlds tallest residential tower on

17.5 acres in the defunct Shrinivas Mills compoundat Lower Parel. Lodha had bought the plot in 2005after a court case on compensation to the millworkers was settled.The base price of an apartment in Lodha WorldPlace is expected to be Rs8 crore, while villas in thesky are expected to cost up over Rs40 crore. It willbe interesting to note how the builder can arrangefor the massive water supply that will be needed.Burj Khalifas water supply system pumps up anaverage of 946,000 litres per day.

Lodha has hired New York-based architects PeiCobb Freed and Partners, who have designed iconicbuildings like the The John Hancock Tower inBoston, the Louvre Pyramid in Paris and theWaverock, an integrated township in Tellapur inHyderabad in 2008.

The architectural team will collaborate with structuralengineering firm LERA. The main tower will have117 floors and 350 flats. The company is still

awaiting some permissions.

The towers have been designed like a petal with

three leaves protruding outside. All three leaves willrise up to 45 floors; two of them will go up to 81floors; only one will reach the 117th floor, said asource close to the development.

The project will take 4.5 years to complete. Lodhahas roped in Samsung Engineering andConstruction for construction work, the companyresponsible for the twin Petronas Towers inMalaysia, once the worlds tallest.The project requires funding of close to Rs1,000crore

DNA, 8 June, 2010, Mumbai

Sj Developers plan Rs 15-cr RoyalHeritage project

Sj Developers & Housing Limited, a city-based realestate player, has announced its latest residentialproject called 'Royal Heritage'. The Rs 15-croreproject, which is to be developed at Patrapada,

close to the site of the proposed All India Institute ofMedical Sciences (AIIMS) on the outskirts of thecity, is expected to be operational by December2011.

Debidutta Mishra, managing director, Sj Developers& Housing Limited said, The Royal Heritage projectis being developed on 1.3 cares of land and it willhave a total built-up area of 1.3 lakh sq ft.Construction work has already taken off and theproject is set to be commissioned by December

2011.

The company, which has the distinction ofdeveloping projects like Royal Garden, Royal Towerand Royal Heights in the city, has already investedRs four crore on the Royal Heritage project.

The Royal Heritage would consist of 70 flats in all ineight storeys and it would offer a mix of one BHK(bedroom hall kitchen), two-BHK, three-BHK andfour-BHK flats. While the built-up area of a singleBHK flat would be 650 sq ft the carpet area for


22/32

Residential

two-four BHK flats would range from 1300-3000 sq

ft. The flats are priced at Rs 2500 per sq ft.

Bookings for these flats have already begun and sofar 37 flats have been booked, Mishra claimed.

The Royal Heritage would offer to its occupants afully equipped gymnasium, a separate and securedplay area, a recreation room, a large banquet halland a library.

With our emphasis on customer requirement, weare working more to develop sustainableinfrastructure, landscaping, clubs and facilitymanagement in all our projects.

As the developers of this project, Sj brings with itselfmore than seven years of experience in the realtysector in the state. Being a local player, we have anadvantage to judge the mindset of the customersand their basic needs, said Mishra.

Sj Developers is planning to launch real estateprojects in other towns of the state like Angul,

Berhampur and Puri and the company is theprocess of creating land banks in these locations.

Business Standard, 8 June, 2010, Kolkata

117-STOREY CITY PROJECT HITSECO ROADBLOCK

Even as the Lodha Group announced theconstruction of a 117-storey tower in Lower Parel on

Tuesday, purported to be Mumbais tallestresidential building, the project has hit a hurdle. TheState Expert Appraisal Committee (SEAC), anenvironment body comprising independent expertsand former bureaucrats, has objected to the planand asked the developer to revise the proposal.

An advisory body set up by the Centre to scrutiniseconstruction and infrastructure projects in the state,the SEAC criticised the Lodha Group and two otherdevelopers IndiaBulls and DB Group in itsmeeting on May 24-26, saying their projects soughtunacceptably high construction area.

Lodhas construction area is more than 13.3 times

the net plot area. Unless these are significantlyreduced, it would not be possible to consider theproposal, it was noted in the minutes of themeeting.


AMEND PLANS, ECO PANELTELLS BUILDERS

The State Expert Appraisal Committee (SEAC), the

environment body, which has raised questions overthe Lodha Groups, plans to build a 117-storey towerin Lower Parel, has also objected to developmentproposals by Indiabulls and DB Realty in centralMumbai.

It has asked the groups to revise their plans, sayingthey need to reduce the proposed construction area,and raised concerns over strain on infrastructure water supply, waste generation, population density in overcrowded areas in the island city.


Lodha to invest Rs 2kcr in 117-storey project

REAL estate firm Lodha Developers will invest Rs2,000 crore to develop the worlds tallest residentialtower in Mumbai to cash in on the continued surgein home prices in Indias commercial capital.

We will fund the project through internal accrualsand pre-launch sales, managing director AbhisheckLodha told a press conference. We are also lookingat some private equity investments for the project.Although he declined to disclose details of the PEinvestments, sources familiar with the matter saidLodha have initiated discussions with leadingSingapore funds GIC and Temasek, and a propertyfund of mortgage giant HDFC, to raise over Rs1,000 crore.


23/32

Residential

Lodha Developers will start bookings by end of this

month and expects to complete the project by 2014.We expect to roll out 300 residential apartmentsand notch sales of about Rs 5,000 crore from theproject, said Mr Lodha.

The company will also construct a two-acregovernment car park in the adjacent area, which,real estate experts said, will help it to get additionalFSI for the residential project.

Once completed, the 117-story tower will standclose to half-a-km tall, dwarfing the tallest buildingQueensland Number One in Australia, whose heightis 323 metre. Christened as World One, the towerwill be higher than some of the iconic globallandmarks including Sears Tower in Chicago, JinMao Building in Shanghai and Empire State Buildingin New Work.

It is not about the tallest tower, but we are lookingat providing our customers a great experience to livein, said Mr Lodha.

The company, which deferred its initial share salelast year, will launch an IPO once the market isstabilised, said Mr Lodha. Lodha can now ask forhigher valuations due to its ownership on two iconic

buildings, said owner of a real estate company whodid not wish to be named. Last month, the companybagged a 22.5-acre property in Mumbai after biddingRs 4,050 crore in the countrys biggest land deal.

The tower will come up on the 17-acre plot of thedefunct Shrinivas Mill in Lower Parel, centralMumbai, which the Lodhas bought nearly five yearsago. It will house three and four BHKs, lavish villaswith private pools and some super-luxurious duplexflats. It will have over 5 acres of landscape area,including a 80,000 square feet sports club at a

height of 175 feet above ground. It will also have anobservatory at a height of 1,000 ft. Flats will carry aminimum price tag of Rs 7.5 crore. The companyhas hired the services of New York-based architectPei Cobb Freed and Partners, which has completednearly 200 architectural marvels across the globe,including Louvre Pyramid in Paris, Bank of ChinaTower in Hong Kong, and John Hancock Tower inBoston. We can assure you that the building willhave all the necessary safety measures in case ofan emergency, Jay Berman, partner at Pei Cobb

and Freed told ET.The Economic Times, 9 June, 2010, Mumbai

HIRCO HANDS OVER FLATS AT

PALACE GARDENS

Hirco Developments, which launched a largeresidential township project, Palace Gardens, coupleof years ago during the realty boom at Oragadamnear Chennai, handed over the first set of residentialapartments last week.

Palace Gardens is among Chennais largesttownship projects and will have 10,000 apartmentunits, when fully completed over multiple phases.

However, in the first phase, it took up thedevelopment of only 928 apartments for constructionacross two towers of 15 floors, six towers of 27floors, and 11 low-rise buildings (ground plus threefloors).

Financial Chronicle, 10 June, 2010,

Oversupply in Mumbai luxuryhousing looms large

Property developers are dreaming of making LowerParel, a former textile hub in central Mumbai, into asuper-luxury residential address for the countrysultra-rich.

However, analysts and property consultants seeoversupply of premium houses looming large on theisland citys skyline.

In all, Lower Parel is expected to see over 10 millionsq ft of residential supply in the next three to fouryears, according to Religare Capital Markets.

Whenever developers see demand in one area, theylaunch projects there. But when the projects getcompleted, the demand may not be there, saysPranay Vakil, chairman of Knight Frank, a propertyconsultant.

Too much, too soon?Vakils words clearly reflect the movement inMumbai. Prices of high-end properties in South


24/32

Residential

Mumbai went down 50-60 per cent during the

slowdown of 2008-09. I feel there is a limiteddemand for high-value apartments of Rs 5 crore.Demand will not sustain unless the whole supply isspread out over the five years, Vakil adds.

According to estimates, about 7,000 new luxuryapartments are expected to be available in the cityin within a year, for over Rs 4.7 crore each.

On Tuesday, the Lodha group announced a 117-storied residential tower, World One, touted as theworlds tallest residential tower, on the defunctShreeniwas Mills plot in Lower Parel. The tower willhave 276 apartments and a built-up area of 1.2million sq ft. With prices only millionaires canaffordRs 7.5-50 crorethe project is expected tohave over 200,000 sq ft of landscape area for theresidents, with am 80,000-sq-ft sports club at 175 ftabove the ground.

Just a few yards away, DLF, the countrys largestdeveloper, is planning to launch Mumbais largestluxury residential project with a built-up area of 4.5

million sq ft, where it is building three towers of 90floors each. The entire project is expected to havearound 1,000 apartments in a price range of Rs 5-10crore.

Many say pricing will be the key in selling suchapartments. While Lodha did selective marketing ofits World One project among its old customers at Rs25,000 a sq ft, DLF is also expected to sell theapartments in the similar price range.

We believe new launches from DLF, Lodha andRaheja have to be at a decent price (Rs 15,000-20,000 per sq ft) to bring absorption in Lower Parel,said Religare analysts in a report. Adds RaminderGrover, chief executive of Homebay Residential, aproperty consultant: Developers need to berealistic.

Developers unfazedDevelopers, however, believe there is enough roomfor their projects. There may be some moments of

oversupply but there is a depth in the market. Goodproducts definitely sell in the market, says R

Karthik, senior vice-president of the Lodha group,

which has almost sold off its Bellissimo project in theMahalaxmi area of Mumbai.

There will be demand for projects in these areas asno major supply is coming up in other parts ofMumbai. I feel there is sufficient supply in this areato meet the demand, says Vinod Goenka, chairmanof DB Realty, which is developing premiumresidential buildings in nearby localities.

Goenka believes prices in the area will not go belowRs 20,000 per sq ft, given the cost of land andconstruction.



25/32

Commercial/ Retail

TIME FOR MALLS TO THINK

LONG-TERM

While the shopping mall phenomenon is fairly newin India, the industry has already seen its ups anddowns in a very short span of time. Three-four yearsago, almost every developer was able to sell mallspace to investors or signed leases with retailerseven before starting construction. Now, almost 30-40 percent of shopping malls are lying half-filled andothers have to rework lease agreements or work onjust revenue share.

So what will make the mall business viable andmore successful? The key is to accept that anylonger term success comes only from long termplanning and short terms gains are always short-lived. Most malls were conceptualised on very littlehomework or research about the future catchmentdynamics or financial feasibility for a retailer. Mallswere planned either because there was already apopular mall in the vicinity (so the footfalls werealready there) or just because there was a property

available to the developer (without considering theaccessibility and relevant catchment).

Hindustan Times, 7 June, 2010,


26/32

The aim is to promote and facilitate private

investment in developing new townships withmodern amenities in all the 71 districts.

Business Standard, 7 June, 2010, New Delhi

Township

BIDS FOR UP TOWNSHIPS TO

OPEN ON JUNE 10

The financial bids for the townships proposed to bedeveloped by private developers and consortiums inUttar Pradesh will open on June 10.

Five companies, including Eldeco, Mantri Housing,Supertech, Shristi and DLF, are in fray afterqualifying the Request for Proposal (RfQ) round inJanuary.

Seven companies had submitted their technicalbids, of which five qualified for the final biddingprocess, a senior housing and urban planningdepartment official told Business Standard.

The deadline for filing Request for Proposal (RfP)was extended last month on the request ofprospective bidders. Awas Bandhu under the statehousing department is the lead agency. Thecompanies have bid for developing townships inLucknow, Ghaziabad, Gautam Buddha Nagar and

Kanpur. The townships would be developed outsidethe jurisdiction of the local municipalities anddevelopment authorities.

The private parties have bid for these towns onbasis of their due diligence and demand analysis,he added. Feedback Ventures is the consultant forthese modern townships proposed to be developedall over UP.

Earlier, the state government had amended its New

Township Policy on suggestions of the privateparties during pre-bid meetings and conferences.

Considering the real estate slowdown last year, weare happy with the response the companies haveevinced in developing townships, the official noted.

The minimum land area and investment criteria foreach township is 1,000 acres and Rs 1,000 crore,respectively. The flow of investment is likely to beover Rs 10,000 crore in this round, as it would entailinvestment of almost Rs 3 crore to develop an acreof land.


27/32

Eco-friendly Township

Golf City, a project by a consortium of threedevelopers, promises customers an eco-friendlyambience with all the amenities of an advancedurban township.Ravi Kumar Mangalam writes

Aconsortium of three builders is coming up withGolf City in Noidas Sector 75, a project that hasbeen notified as Eco-friendly Township by theNoida authority in the tender bid. The consortium

comprising Gardenia Group, Maxblis and AIMS areproudly showcasing it as one of the few integratedtownships in the whole of Noida.

GolfCity is an integrated township, and that is ourUSP. From commercial space to residential space,from institutional to entertainment facilities not tospeak of a 50-acre green belt with parks, waterbodies and various kinds of flower gardens it is aself-sufficient township where residents need notstep out of the complex for any of their domestic orsocial needs, Sanjeev Sharma, MD of GardeniaGroup, says.

The project is located adjacent to Sectors 76, 77and 78, which are all chock-a-block with grouphousing projects. The other significant feature ofGolf City is its connectivity. Just across the fullydeveloped Sector 50, the proposed Metro line fromSector 32 to Sector 82 will pass by the township. Itis also only about 2km from Noidas City CentreMetro station. The project is very close to theproposed FNG Expressway and lies on a 75m-wideroad connecting to Greater Noida.

The whole project is going to be raised on a 150-acre plot and has 2.5 million sq ft of commercialspace, which is spread over 15 acre. Thecommercial space includes retail, daily-utility shopsand office space. The residential area will have 20million sq ft of built-up area with flats and duplexvillas, and ample parking space. The flat sizes willbe in the range of 950 sq ft to 2,950 sq with a basicselling price of Rs 3,200/sq ft (plus charges). Thus,the township will encompass housing for theaffordable segment on one end and premium

segment on the other.

Township

Inaugurating the Phase-I of Waverock, chief minister

K Rosaiah said creation of physical infrastructure ofinternational standards was a prerequisite for theICT industry to set up shop and operate in a mostoptimal manner.

Andhra Pradesh has got the highest number of 57IT special economic zones (SEZs), as against thetotal number of 351 IT SEZs approved by the Centrein the country. When all the SEZs are fullyoperational in the next three years, these will createmore than 100 million sft of office space and about 1million direct employment in the IT sector, the chiefminister said.

Business Standard, 2 June, 2010, New Delhi

HIRCO COMPLETES FIRSTPHASE OF TOWNSHIP

Hirco Developments, the project managementcompany, announced on Wednesday that the firstgroup of flats in its Hiranandani Palace Gardens

Township coming up in the suburban area ofChennai at Vadakkapattu village near SingaperumalKoil would be delivered soon.

Addressing presspersons here V. Suresh, PrincipalExecutive Officer, Hirco, said the township, set on369 acres, would have 10,000 apartment units withthe accompanying physical and social infrastructure.As part of the first phase, 928 apartments wereunder construction across two towers of 15 floors;six towers of 27 floors and 11 low rise buildings.

Suresh said that out of 2.9 million sq. ft. thecompany had already sold 2.14 million sq. ft. in theChennai township. The prices per sq.ft. ranged fromRs. 2,400 to Rs. 3,600, he said. Hirco is alsodeveloping another master planned townshipPalace Gardens' set on 583 acres in Panvel, in theMumbai Metropolitan region. The two projectscombined will have 66.4 million sq.ft. of buildablearea of residential, commercial, retail and socialspace.

The Hindu, 3 June, 2010, Hyderabad


28/32

flats on offer in the township with each tower being

15-floor high, along with independent villas. Theproject will be executed in three phases and twophases have already been sold out. The wholeproject will be handed over to customers, phasewise, within the next three years, Sharma says.

Other projects of the consortium include Glory inNoidas Sector 46 (to be handed over in Q4 of 2012)and Grace in Sector 61 (to be handed over in mid-2011). Both the projects have been sold out. Apartfrom those in the NCR, AIMS Krishna Dham onMera Road, Mumbai and AIMS Tower in Basai,Mumbai are projects executed outside. GardeniaGroups earlier projects include Gardenia Green,which has been completed and handed over inVasundhara, Sector 18 and Le Gardenia Goa inGoa, a villa project, which has been completed andsold out. Gardenia Group is also one of thepromoters of Crossings Republik township.

The Times of India, 5 June, 2010, Delhi

Township

Citing the other USPs of the integrated township,

Sharma says: Unlike gated communities and grouphousing projects, we have put emphasis on having alot of open space for residents of Golf City. We arealso providing an incampus practice golf course.The campus has an integrated sports complex with12 tennis courts, an Olympic-size swimming pool,squash courts, a cricket ground, a football field andvolleyball courts. There is also a 2-lakh sq ft clubwith world-class amenities. Perhaps, the mostenchanting feature of the township is the centralboulevard with a musical fountain where residentscan relax in the evening. This is a feature inEuropean townships, as well as the recent Dubai-based real estate residential developments. Theboulevard is surrounded by residential flat towers,whose ground floors will have shopping centres[apart from the retail space already earmarked in thedesignated areas of the projects plan] for the easeof residents. Apart from this central musicalfountain, there will be other musical fountains andgushing waterfalls.

The whole project will be built using earthquake-

resistant RCC material and the layout plan isvaastu-compliant. The prospectus of the townshipslists in its specifications vitrified tiles to be fitted outin drawing room, dining room, kitchen, andbedrooms, while the master bedroom will havelaminated wooden flooring. Toilets and balconieswill have ceramic tiles. Provision has been made formodular kitchens, with granite-top working platformand stainless steel sinks; the kitchen would also beembellished with designer ceramic tiles up to 2ftabove the granite-top working platform. Toilets

would be fitted out with ceramic tiles up to 7ft high.To give an artistic finish, the interior walls wouldhave designer-concept paint with a combination oftexture and rich oilbound distemper. Modularelectrical fittings have been provided for in all therooms.

We will have primary schools, a hospital, and ahotel among the institutions in the township. We arein talks with a US-based entity, Stanford Group, forbuilding the hospital in Golf City. There are 9,000


29/32

SEZ

GOVT TO TAKE UP 6 FRESH SEZ

PROPOSALS TOMORROW

The government will take up six fresh requests forsetting up special economic zones (SEZs), whichhave emerged as major sources of exports,tomorrow. The inter-ministerial Board of Approval(BoA) on SEZs headed by Commerce SecretaryRahul Khullar will also consider framing rules thatwill allow migration of units from one zone toanother, an official said.

As of now, there is no specific provision for transferof a unit from one SEZ to another. The new SEZproposals include Hindalco Industries Ltd'sproposed aluminium sector SEZ at Bargwan,Madhya Pradesh, and Larsen & Toubro's IT SEZ atMysore, Karnataka. The board will also take up therequest of real estate major DLF for re-notification ofits SEZ in Kolkata.

The Economic Times, 8 June, 2010, New Delhi

NO CLARITY YET ON SOPS TOSEZS IN DIRECT TAXES CODE

Even as Larsen and Toubro withdrew its proposalfor an IT/ITeS Special Economic Zone (SEZ) citinguncertainty in tax treatment towards SEZs in theDirect Taxes Code (DTC), the Commerce Ministryhas said the Finance Ministry is yet to consult it onthe continuity of fiscal sops in the DTC to these tax-free zones.

The Board of Approval (BoA) for SEZs on Tuesdayapproved the withdrawal of formal approval to L&T'sIT/ITeS SEZ in Mumbai. Dr L.B. Singhal, Director-General, Export Promotion Council for EOUs andSEZs (EPCES), said, If there is no income taxexemption, no entrepreneur will set up a unit inSEZs. Naturally, no developer would want todevelop SEZs in such a situation. He said many arenow holding back their investments in SEZs due tothe uncertainty created by the DTC.

The Hindu Business Line, 9 June, 2010, New Delhi


30/32

Hospitality

No News on this topic in the

current Week


31/32

nput Cost

No News on this topic in the

current Week


32/32

Disclaimer

The information carried by the articles in this newsletter has been gathered from various reports published in

newspapers and magazines. ASK Property Investment Advisors has reproduced the articles and reportsverbatim. ASK Property Investment Advisors does not vouch for the accuracy of the information and is notresponsible for decisions that may be taken on the basis of the information.This document is being communicated to you solely for the purposes of providing our views on current markettrends. This document is being communicated to you on a confidential basis and does not carry any right ofpublication or disclosure to any third party. By accepting delivery of this document each recipient undertakesnot to reproduce or distribute this presentation in whole or in part, nor to disclose any of its contents (except toits professional advisers) without the prior written consent of ASK Property Investment Advisors, who therecipient agrees has the benefit of this undertaking. The recipient and its professional advisers will keeppermanently confidential information contained herein and not already in the public domain.This document is not an offer, invitation or solicitation of any kind to buy or sell any security and is not intendedto create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities orinvestment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any productor service. The use of any information set out in this document is entirely at the recipient's own risk.ASK Property Investment Advisors does not accept any responsibility for any errors whether caused bynegligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in thisdocument. The information in this document reflects prevailing conditions and our views as of this date, all ofwhich are subject to change. In preparing this document we have relied upon and assumed, withoutindependent verification, the accuracy and completeness of all information available from public sources orwhich was provided to us or which was otherwise reviewed by us. Past performance cannot be a guide tofuture performance.No reliance may be placed for any purpose whatsoever on the information contained in this document or on itscompleteness. The information set out herein may be subject to updating, completion, revision, verification and

amendment and such information may change materially.

Documents

Real Estate News Letter 7th Jun -13 Jun 2010