Friday, May 30, 2008

Godrej Properties Ltd plans to raise up to 6 billion rupees through the IPO and a pre-IPO share placement to institutions

Godrej Properties will issue fresh shares through the IPO, making up 10 percent of its post-issue equity. Prior to the offer, it will also issue a maximum of 2.44 million new shares, or 3.5 percent of its equity, through the share placement, the bankers said.

Godrej Properties is developing about 20 million sq ft space across Mumbai, Pune, Kolkata, Bangalore and Hyderabad. A third of this is in the residential segment, and the balance in commercial and retail.
Godrej Properties files papers for 7-mln-share IPO

Wednesday, May 28, 2008

India-focused real estate private equity firm Saffron Group says it has chalked out a two-pronged strategy to become a leading player

Saffron Group:

The Group, a brain-child of Ajoy Veer Kapoor and his peers from the banking fraternity, is the promoter of Euronext listed Yatra Capital, an India-focused real estate fund.

"Our strategy is to be a leading player in the field. We don't have any short-term view. The industry is growing and it will yield better results for another 10-15 years," Kapoor said.
Saffron aims leading place in realty funding

Kolte Patil Developers Ltd. and Yatra Capital Ltd.

Yatra Capital has bought a 49 pct stake in Kolte Patil for 21.6 mln eur. They will initially develop three separate residential projects in Pune.

This means just one thing: upcoming projects are not expected to return in less than 5 years, and Saffron is waiting in the wings to pick up distress sales of properties.
Eclectic Investor

Related News:

Parsvnath Developers ties up with two Saffron Group managed funds, Yatra Capital and Saffron India Real Estate Fund I, for developing the BEST bus depot near Bandra Kurla Complex in Mumbai.

Saturday, May 24, 2008

Indian real estate can absorb a lot more capital than is currently flowing into it -

If only policy makers can fix a few basic loopholes in the laws governing property titles, taxation and creditor rights. Failure by lawmakers and regulators to set clear rules on property rights and ownership will only widen the demand-supply gap that's pushing rents to an intolerably high level.
There's a world of opportunity out there

Tuesday, May 20, 2008

Private Equity Funds in Oman, Abu Dhabi, Qatar and Dubai are scouting for Indian private companies in real estate, health care, retailing & education

Explaining the rationale behind this sudden rush, Sunil Shirole, Yen Management Consultant, said, "they believe the Indian economy is largely decoupled from US or global slowing. Hence, there is no fear of any recession here. In fact, the US recession will inadvertently push companies based there to outsource part of their jobs to emerging economies, where India is the first choice."

"And as the Indian markets are in correction phase, they can pursue some value-buying now," he added.

Monday, May 19, 2008

ICICI Venture Fund to raise 3 billion dollars for an infrastructure and a real estate fund

ICICI VENTURE Fund Management Pvt Ltd, the private equity arm of India’s second largest bank, ICICI Bank, will raise as much as three billion dollars for an infrastructure and a real estate fund, reports Bloomberg.

ICICI Venture will start the roadshows next week for a $1.5 billion fund, and may also look at raising a real estate fund of equal amount, ICICI Venture CEO Renuka Ramnath has been quoted as saying by Bloomberg.

The proposed real estate fund will invest in residential and commercial projects in a dozen cities including New Delhi and Mumbai. Most of the funds will be raised from investors in the US, Europe, Japan, Canada and the Middle East.

PBEL Property Development invests Rs 180 crores in Chennai to build a residential and commercial township

PBEL Property Development(India) Pvt. Ltd. is the newest enterprise to enter the real estate business in India. It is a joint venture of Israeli giants Property and Building Corporation (PBC), Electra Real Estate (ERE) and Indian developer INCOR Infrastructure. Over the last couple of months PBEL has purchased property worth Rs 500 crore across various cities in India.

Presently focusing on Chennai, Hyderabad and Mysore, PBEL will soon be developing these properties into world class living and commercial space.

PBC is one of the leading real estate companies in Israel established in 1961 and has been a publicly traded company on the Tel Aviv Stock Exchange since 1961. The company is rated AA by Standard & Poor. PBC has extensive experience in developing and constructing residential neighborhoods and commercial properties in Israel and the US. PBC a subsidiary of the IDB Group, is active in the realty space in three continents: North America, Europe and Asia and is Israel's largest business conglomerate with global assets in excess of $27 billion.

Electra Real Estate Ltd. is one of the leading real estate companies in Israel. The company was established in 1994 and has been operating overseas since 1997, and the major growth in the company's activities has taken place over the past three years. Electra Real Estate is a public company listed in the Israeli TASE since 2005.

INCOR is founded by US returned NRI's in response to the need for a Professional Real Estate company, to meet the growing demand of quality housing and commercial space across India. INCOR has projects in hand to construct 1.3 million sq. ft, which includes a residential neighborhood, a shopping mall and an office center. INCOR holds a land bank of 218,592 sqm to be developed for mixed use across various locations in Hyderabad.

India's journey towards a home-owning democracy

What does this all mean for the outlook of Indian property, I asked Chothani. Firstly, "we expect to see the market continue with the same momentum, sustained by strong demand, strong FDI inflow, and the support of government-led infrastructure development", although, just like anywhere else it seems:

"developers will have to adopt innovative techniques to keep a check on spiralling construction. In addition, with finance costs also on the rise, developers and Private Equity projects will be pressured into delivering affordable housing solutions".

Nevertheless, Chothani is more the bull than the bear;
"big project commitments by major companies coupled with growth in retail, housing, logistics and industry, will be the key elements of the real estate sector in 2008".
- Starting a diversified journey
By Sean Kelleher, Special to Gulf News

Mahindra Lifespaces' SEZs news: upcoming at Karla - Pune, Thane - Mumbai, Jaipur and ongoing at Chennai

1) Mahindra Lifespaces' Karla - Pune and Thane - Mumbai SEZs:

Management has made significant progress towards concreting its 2 proposed SEZs at Karla, Pune (3,000-acre multi-product SEZ) and Thane, Mumbai (52 acre biotech SEZ).

2) Mahindra Lifespaces' Jaipur SEZ:

The company has witnessed significant progress at its 3,000 acre SEZ at Jaipur, where it has till acquired 2,500 acre of land and has committed about 20 per cent of processing area to anchor tenants such as Infosys, Wipro, Tech Mahindra and Deutsche Bank.

3) Mahindra Lifespaces' 1,400 acres Chennai SEZ enters cash generation phase:

The company has drawn up plans to launch a residential project over its 12-15 million square feet of residential area near the SEZ, to cater to the demand of about 20,000 apartments over next five years by employees working at the SEZ.
Business Standard

Saturday, May 17, 2008

Home loans and interest rates news links

1) ICICI Bank cuts home loan EMI; ups repayment tenor:

Seeking to mitigate inflationary pressure in a rising interest rate scenario, the country's largest private sector lender ICICI Bank has decided to rather increase the repayment tenor for its home loan customers while cutting down their monthly installment amount.

ICICI Bank said that the new EMI amount for its customers would be applicable from April 2008.

The lender further added in the advisory that if a customer wanted to continue with the existing EMI, the borrower can approach the bank for resetting the EMI.
The Economic Times

2) Union Bank cuts rates on home loans of upto Rs 30 lakh:

Public sector Union Bank of India has reduced interest rates on home loans upto Rs 30 lakh by 0.5 to one per cent depending on the tenor and type of loan.

Accordingly, loans for upto five years will have a fixed rate of 10.25 per cent as against 10.75 per cent earlier while floating rates have been reduced to 9.25 per cent.

Similarly, for loans for 5-10 years the floating rates will be reduced to 9.5 per cent. The existing floating rates on such loans are 10.25 per cent (for margins 25 per cent or more) and 10.5 per cent (for margins 20 per cent to less than 25 per cent).

The loans for 10-15 years will attract a floating interest rate of 9.75 per cent as against 10.5 and 10.75 per cent existing.

Home loans for tenure of 15 years will have a floating rate of interest of 10 per cent as against 10.5 and 10.75 percent for different margins, the release added.
The Economic Times

Related Story:

Reserve Bank of India relaxes the risk provisioning norm for housing loan up to Rs 30 lakh

Reserve Bank of India relaxes the risk provisioning norm for housing loan up to Rs 30 lakh

To take care of the growing property rates:

The RBI has modified the provisioning limit for housing loan to take care of the growing property rates mainly in the urban centers.

A move that would make it easier for banks to provide loans for purchase of residential properties.

"It has been decided to enhance the limit of Rs 20 lakh to Rs 30 lakh in respect of bank loans for housing in terms of applicability of risk weights for capital adequacy purposes. Accordingly, such loans will carry a risk weight of 50 per cent," Reddy had said.

The move would provide the bank additional capital for lending more to housing sector.

However, it may not result in immediate softening of interest rate for the housing sector, Oriental Bank of Commerce Executive Director Allen C A Pereira told media.
-The Economic Times

Related Stories:

1) What should I do with my home loan?

2) Home loan - to avoid interest rate hikes in the near future, taking a loan from a PSU bank might be a good idea

3) Home loan - interest rates

Price index at 8% already- Experts

The provisional inflation based on wholesale price index (WPI) hasn’t crossed 8% yet, but the revision of a whopping 1.9% points in annual rate of inflation for the week ended March 8 has led experts to believe inflation is now well above that mark.

-The Economic Times

Related Stories:

1) Home loan - interest rates

2) Inflation hits 44-month high of 7.83% for the week ended May 3

Inflation hits 44-month high of 7.83% for the week ended May 3

The last time inflation hit such a high was in September 2004, when it touched 7.86%.

Despite a high base effect and slew of fiscal and monetary measures initiated recently, inflation accelerated from 7.61% for the week ended April 26, suggesting that the government and RBI may have to initiate more steps to hold the price line.

“In view of these developments, it is very difficult to see prices coming down. In the coming days, the possibility of 8% inflation cannot be ruled out if the prices in global market continues to surge,” Crisil principal economist DK Joshi said.

-The Economic Times

Friday, May 16, 2008

Property prices fall 15-20% in Q1- in Pune and all Indian real estate markets

In fact, in many markets, the level of transactions have gone down drastically, which has resulted in this dip. This is also because residential capital values in some micro markets in the metros have shown a negative growth in the last one quarter.

After tracking capital values in metros such as Mumbai, Chennai, Bangalore as well as Pune and the National Capital Region (NCR), the result was that either there has been a fall in prices of residential values or they have not increased in the last three months.
Realty does reality check -The Economic Times

Thursday, May 8, 2008

What real estate investors want to know about Kumar Properties' Megapolis Township at Hinjewadi in Pune?

List of questions:

I have compiled this list from the comments on my 'Ravi Karandeekar's Pune Real Estate Market News Blog'. To me comments are very important. I try my best to answer and take a part in the conversation. But after all, this is my opinion. I request you to visit these blogs and express your views. Of course, if you have any other question, please, let me know in the comments and i will add it to the list.

My blogs on Megapolis:

1) Kumar Properties' Megapolis at Hinjewadi - 3rd integrated township after City Group’s Amanora Park and Paranjape Schemes' Blue Ridge

2) Thanks to Megapolis at Hinjewadi! Inspired by it's success, i am announcing my first integrated township based on "swim to work" concept!

3) Megapolis - views and property rates of Kumar Properties' and Avinash Bhosale Group's 150 acre integrated township at Hinjewadi, in Pune

Property buyers want to know:

1) When there is no bookings (Pune real estate slowdown) in the developed area of the city why new project of such a big size (Megapolis is a 150 acre township) is launched in a remote area (3rd phase of Rajiv Gandhi Infotech Park)?

2) Can retired persons (Megapolis is going to have 6 blocks for senior citizens) afford to book the property at the rate of Rs. 3,250 or 3,300 (Actually, this rate is an introductory offer and booking of homes for senior citizens is not opened)? or What is your budget for your retirement home?

3) Why property rate is Rs. 3,250 / 3,300 per sq.ft.? Justify the rate.

4) Is there a demand in Pune for the flats in this budget? What is the size of the market for the flats in this budget (41 to 54 lakhs at introductory rate of rs.3,250 to 3,300) in this type of a township? (Megapolis has 5,800 flats in it's 58 towers of 21 stories.)

5) Compare Kumar Properties' Megapolis with Paranjape Schemes' Blue Ridge and Lavasa on the basis of infrastructure, construction quality and amenities, considering that i am "end user" - i am going to live in the project when i "return 2 India"

6) Should i book in Kumar Properties' Megapolis or wait for 2nd phase of Paranjape Schemes' Blue Ridge?

7) How is the response to Kumar Properties' Megapolis? How many flats are booked?

8) What about essential shopping like grocery and vegetables?

9) What about railway travel? Pune station is quite far.

10) Is investing in big township profitable? Have investments in DSK Vishwa given good returns?

11) What should be the rate of the property in the remote areas of Pune?

12) Should i cancel the booking in the Wakad / Balewadi / Baner belt and book in Kumar Properties' Megapolis?

13) How much will actually be delivered out of the promised at the time of booking a flat in Kumar Properties' Megapolis? Your guess based on the track record of Kumar Properties past performance and in general by builders in Pune.

14) What are the disadvantages of a location in MIDC?

15) What about water supply to Megapolis?

16) Do you think distance from the highway would be a great disadvantage? (Close to highway is always presented as benefit by Pune real estate projects. Housing projects in Chakan and on Nagar road claim "close to airport as a unique selling point.)

17) Are these kinds of projects, (integrated township projects), successfully delivered in other cities of India like Bangalore, Chennai or Gurgaon?

18) How electricity will be provided in Megapolis and Blue Ridge? What would be the source and the rate?

19) Is Megapolis good as a second home considering the distance?

20) How can you enjoy the Malls, Multiplexes, Theater, Cultural events and Restaurants in Pune?

21) What about educational facilities? Does Megapolis have a school?

22) Do you think Telecommuting is going to be the next big trend in IT?

23) How long do you have to hold on to this property to get good returns? 5 Years?

24) What would be the appreciation after 5 years?

25) How much development would happen in this area after 5 years?

26) In which municipal corporation area does Megapolis lie?

What is your take on life in this type of a township?:

Megapolis is a 150 acre township. It is build under Special Township Act. But this is not the first township. In Pune, we already have Magarpatta City at Hadapsar.

You may know or may have lived in this kind of a township. It may be of a smaller size. It may belong to some industry - say sugar or fertilizer, institution - IIT Powai or defense establishment. Besides people working in the same organization, rest of the basic infrastructure remains the same. Referring to your experience about life and living in a gated community, totally cut off from the city, you can express your views in the comments.

At this point, we are talking about Megapolis but your views will help all those who are interested in investing in upcoming integrated townships. For example, Magarpatta's Nanded City on Sinhagad Road!

Monday, May 5, 2008

Home loan - interest rates

Credit Policy: Home loan rates remain steady:

The cash reserve ratio (CRR) hike took everyone by surprise. The reduced liquidity may lead to increase in the interest rates on loans. At the same time, banks may now have an incentive to lower interest rates on home loans below Rs 30 lakhs as the RBI has reduced the risk weight on such loans. The RBI governor Y V Reddy said, "Reduction in risk weightage is an enabling provision and we expect banks to pass on the benefits to the customers."

According to analysts, banks may not raise interest rates on bigger home loans despite a hike in the CRR. Considering the slowdown in the economy and that interest rates have already peaked, banks may not consider raising lending rates immediately.
Ashish Gupta, The Economic Times

Home loans: Housing finance cos see growth, banks slowdown:

While housing finance companies have registered strong growth in home loan disbursals, banks are seeing a slowdown in this segment. Growth in the housing loan industry has slowed down from 25 per cent in 2006-07 to 12 per cent in 2007-08, according to RBI’s report ‘Macroeconomic and Monetary Developments 2007-08’.

Analysts attribute this fall to the banks’ going slow on retail loans due to rising non-performing assets and problems in recovery. However, housing finance majors have registered strong growth in business.
The Hindu Business Line

Negotiating salary? 4 important tips

There are many of us who get lured with the numbers that show in our CTC package, but when the actual take-home salary comes in our hand, it causes a lot of heartache. It is therefore very important that when you are negotiating the salary, you should have a clear idea about numbers. A good way to achieve this is by using tax saving strategies that would reduce your burden.
Meenakshi Subramaniam - Business Standard - rediff

Home loan - to avoid interest rate hikes in the near future, taking a loan from a PSU bank might be a good idea

Fillip to priority lending:

Another important measure that RBI took was to hike the limit for priority-sector home loans from Rs 20 lakh to Rs 30 lakh. Earlier, for loans up to Rs 20 lakh, the risk weightage was 50 per cent, and for all loans above this amount, it was 150 per cent. Now the limit has been hiked to Rs 30 lakh. Because of lower risk weightage, banks offer lower rates on loans of up to Rs 20 lakh (now Rs 30 lakh).

Given the rise in property prices in major cities over the last four-five years, very few people were able to take advantage of these lower rates. With the ceiling being hiked, more people will be able to enjoy the benefits of lower loan rates.

For instance, SBI maintains an interest rate of 10.5 per cent for loans up to Rs 20 lakh and 10.75 per cent for loans above Rs 20 lakh. Now since the risk weightage for loans up to Rs 30 lakh has been reduced, a home loan customer seeking a loan of Rs 30 lakh will see his EMI come down by Rs 505 on account of the 25 basis points differential.

Customers need to understand that private sector banksICICI Bank, HDFC and others—don’t have differential rates on different loan amounts. To take advantage of this recent development, you will have to seek the loan from a public sector bank.
PSU banks may not hike rates

What should I do with my home loan?

The Reserve Bank of India increased the cash reserve ratio by 50 basis points on 17 April to reduce liquidity and control inflation. "Tighter money might push up lending and deposit rates," says Pralay Mondal, country head (retail assets and credit cards), HDFC Bank. So what does that do to your home loan?
Deepti Bhaskaran, Outlook Money - rediff

Saturday, May 3, 2008

Now, private real estate equity funds have an upper hand

Stagnation - Slowdown:

With the property market stagnating in many areas and a negative sentiment developing among buyers, developers are willing to re-visit valuations and construction commitments to make them more reasonable.

Realistic Valuations:

From much exuberance to a lull, there has been the shift in mood in the real estate sector for the past 4- 6 months. But private equity funds targeted at property have reason to cheer. This is because deals have become easier to come by. Developers have accepted that they need to be open to more realistic valuations.

No Deal to Deals!:

Shravan Gupta, VC and MD, Emaar MGF Land said that they were not able to do deals the previous year because developers were too greedy and there was so much happening in the sector, but now he thinks there is sanity so deals would happen.


Moreover, industry watchers say developers, in an effort to keep the market afloat, are constraining supply by holding back new project launches. This is also due to the lack of sufficient funds for execution.

Moneycontrol India : Developers doing realty revaluation?