India Property, Real Estate India, Properties in India

Hero Group, a prominent name in automobile industry, is considering making a foray into Indian property market.

The Group has around 10 acres of land in Gurgaon, which it is planning to convert into a commercial property, informs Naveen Munjal, CEO, Hero Exports, the trading arm of the group.

Hero Group is holding discussions with well established builders in Delhi to develop the property and the details of the companies’ real estate plan are to be completed.

The company’s shares closed at Rs 17.85, or 2.46% at Rs 744.15. The volume of shares traded at the BSE was 32,248.

DLF is coming up with one of its biggest residential projects on the outskirts of Bangalore. To be christened as ‘Knowledge Park’, the complex is to build with the investment of Rs 60,000 crore. The state-of-the-art project is thrice the size of DLF City in Gurgaon.

The complex will be developed across the 9,000-acres of Bidadi, 30 km from Bangalore. The development charges for per acre of this self contained township will be over Rs 57 Lakh, and it is scheduled to be completed within 5 years.

To be developed on a walk-to-work theme, the complex will also have shopping malls, multiplexes, hotels, and serviced apartments. This Township is a 50:50 joint venture between Dubai based Limitless Holdings and the real estate giant DLF.

The project may have a dedicated metro rail connection to Bangalore City. BMRDA has plans to connect the Township to the new international airport at Devanahalli, a town situated at a distance of 39 km from Bangalore.

Kolkata, India, September 22, 2007 - In a move welcomed by the real estate industry, ailing public sector firm National Textile Corporation (NTC) has sold 150 acres of mill land in Kolkata for residential and commercial real estate redevelopment.

The land from nine mills located mainly in Hooghly and North 24 Parganas districts will bring much needed supply to the Kolkata real estate market.  Purchasers include the Happy Group of Companies which bought four mills, Sugam Park Group which acquired two mills, and Forum Projects and Paharpur Cooling Towers with one mill each. A four-acre campus in Lake Town, sold earlier, went to a Hyderabad firm.

The state government has allowed the conversion of industrial land for residential or commercial purposes

New Delhi, India, September 23, 2007 - The Delhi and NCR residential real estate market is experiencing a slow-down in purchasing activity. While suburban markets have witnessed a decline in capital values driven by sluggish demand and adequate supply of new units, prime real estate in Central and South West Delhi has witnessed steady purchasing activity.

According to global real estate services firm Cushman & Wakefield, around 2,600 apartments are being launched in Ghaziabad, Noida, Greater Noida and Gurgaon and will enter the market in the next couple of years. Half of these are targeted at the mid-segment with prices upto Rs 3,500 sq ft, while the balance targets the premium segment with prices between Rs 6,000 to Rs 7,500 per sq ft. This supply will put pressure on capital values in these areas and Cushman & Wakefield expects there could even be a marginal drop in prices in the medium term.

South Delhi and Gurgaon rental market has been buoyant, particularly in the premium segment. With demand clearly outstripping supply, rentals have been on the upswing.

Real estate major DLF Ltd on Thursday acquired the SBM Land Redevelopment (SBMLR) project in the national capital from DCM Shriram Consolidated and Lohia Group for Rs 1,675 crore, inking the country’s biggest land deal.
The company has entered into an agreement with DSCL and Lohia’s, which also own Indo-Rama Textiles, to acquire the 38 acre property in Delhi — better known as Swatantra Bharat Mills and DCM Silk Mills — at just about 4-5 km from Connaught Place, the Capital’s central business district. SBM is located at the intersection between Shivaji Marg and Zakhira Bridge in north Delhi.
“The funding of the acquisition has been through internal accruals,” DLF group executive director Rajiv Talwar said.
As per internal estimates of DLF, this acquisition coupled with the previous acquisition of contiguous plots, will add Rs 4,000 crore to its NAV. It will also increase the NAV of the existing IT SEZ project by Rs 1,000 crore, thereby the total cumulative NAV increasing by Rs 5,000 crore.
With the current acquisition, the company would have the potential to build three million sq ft of IT SEZ offices, two million sq ft of shopping mall and five million sq ft of residential units in the national capital.
The company said the deal would create a potential value in excess of Rs 12,000 crore. DLF is planning to pump in Rs 11,000-12,000 crore towards development of this land into integrated township, consisting of office space, houses, commercial units and hospitality.
It will perhaps be the first integrated township of its kind, combining an IT SEZ with a massive housing supply for those working in the SEZ.
DSCL and Lohia’s held an equal 50% stake in SBMLR. The deal is the biggest in the country, surpassing rival Unitech’s Rs 1,582 crore purchase of land in Noida.

A news report from CNBC-TV18 suggests that Indian real estate biggies such as DLF, Sobha Developers and HDFC Realty are in the race for an 8.26 acre plot in Chennai valued at Rs.600-650 crore.

CNBC-TV18 believes that the seller is the John D’Monte Trust. The deal could be valued at Rs 600-650 crore or Rs 72-78 crore per acre.
Sir John D’Monte, a Madras-based businessman with extensive property assets died in 1821 and willed the estate containing his house gardens and grounds into a Trust. All rents and profits from the trust are to be used for charitable purposes. The Archbishop of Madras Mylapore is the trustee. In July 2006, the trustees ran into trouble when the the Madras High Court declined to “sanction and approve” two agreements proposing to lease out 150 grounds of the D’Monte estate located on Boat Club Road & Chamiers Road to Sathyabama Deemed University chancellor Jeppiar for 50 years. As per the two separate Deeds of Agreement to Lease, Mr. Jeppiar was to pay Rs. 75 crore besides Rs. 15,000 as monthly rent for the land to the Archbishop of Madras-Mylapore. Justice M. Chockalingam, dismissing two separate petitions from the Archbishop and Sole Trustee of the Estate of Sir John D’Monte, Arul Das James, wondered how the property was sought to be leased out to Mr. Jeppiar, who was a member of the Property Committee of the estate when the agreement was signed.
The Hindu Business Line had reported in June this year that the Archbishop of Madras Mylapore, the trustee, had called for bids for 66-year lease of the 150-ground property Ben’s Garden on Boat Club & Chamiers Road.  This is the largest parcel of land coming up for development in Chennai’s poshest locality.  The last land deal in this area, in Feb 2007, netted Rs 16,765 per sq ft for freehold land.  
While lease-hold land is typically priced at a discount to free-hold land, given the scarcity of land in the Boat Club area, industry observers are waiting with bated breath to see if new price records are set from the sale.

Foreign investors are once again looking into India’s red-hot property market, as the government has relaxed some norms. At least half-a-dozen deals worth $lbn are being finalised by the Citigroup, Deutsche Bank, The Carlyle Group and Blackstone, among others, with unlisted real estate companies, as pre-initial public offering (IPO) placement. A clarification issued by the department of industrial policy & promotion (DEPP), under the ministry of commerce and industry, has cleared the air for investments by foreign institutional investors (FIIs), foreign venture capital funds (VCFs) and private equity players. FII investments in companies’ pre-IPO will be treated as foreign direct investment (FDI), as per the clarification, and the investment will have to be channeled for FDI-compliant greenfield projects only. This has settled the differences arising from views aired by the finance and commerce ministries, and financial sector regulators. Now foreign investors will have to wait three years before exiting the company completely. DIPP has clarified that the investor will have to lock-in a minimum of $5 mn, in case of a joint venture with an Indian real estate player, or $10 mn, in case of a wholly-owned subsidiary of a foreign investor. This has paved way for a large number of foreign investments at the entity level. This is a complete departure from the past, when equity investments used to be all project-specific. Industry officials said leading property players are sewing up equity deals at the entity level, with greater clarity in foreign investments in the sector.

Parsvnath will invest and develop over 100 projects.Parsvnath Developers, plans to invest over $4 billion over the next 5 years. The company will translate its large land bank across India into more than 100 real estate projects. Parsvnath’s current land bank constitutes a saleable area of over 153 million sq ft. and the company holds projects in all verticals including commercial, residential, retail, hospitality, IT Parks, and SEZs. The project cost of the company’s current land bank is over $5 billion. Of this, $1 billion has already been spent on buying land. The investments will come through debt and internal accruals, informs Mr Pradeep Jain, Chairman, Parsvnath Developers. Construction work on 66 mn sq ft. of area is already in progress. The average cost of construction is evaluated to be Rs 1,115 per sq ft. In addition to hotel projects, Parsvnath Developers will also develop 114 multiplex screens under its commercial projects. About 26 mn sq ft. land will be used for the construction of four IT/ITes SEZs. The company has already got a nod for the same. A new subsidiary has been formed for handling the development of SEZs. Parsvnath Developers is also looking forward to add an aggregate salable area of around 170 million sq ft by December for seven other SEZs.

New Delhi, India, July 18, 2007 - The Indian Hotels Company Limited (IHCL) on Tuesday said it will build a premium 200-room Taj Business hotel in partnership with HB Estate Developers in Gurgaon, which is expected to be operational by 2010.

IHCL has identified the location as one of the fast emerging business centres across the country for its domestic expansion, a company release said.

“Gurgaon has been in the forefront of rapid growth of corporate traffic, industry and the retail revolution coupled with a booming entertainment business. Strategic location of the timing of the project are key factors in establishing our presence in this important market,” Taj Business Hotels COO Jamshed Daboo said.

Taj Hotels and resorts and Palaces group comprises 59 hotels in 41 cities across India and 18 international locations. While the HB Estate Developers is a member of financial services conglomerate HB Group. 

New Delhi, India, - Leading real estate services firm Cushman & Wakefield feels that there is likely to be downward pressure on real estate prices in certain suburban locations of Delhi caused by fresh supply of housing units in the mid-range segment. This excess supply could lead to a correction of 15%-20% in certain markets.

Cushman & Wakefield reports that activity levels in mid-range projects in Gurgaon, Noida and Ghaziabad has diminished. Exit of speculators and reduced interest from end-users, due to the rise in interest rates and values, has been the main factor contributing to the slow down. Capital values in Gurgaon are down 11% versus six months ago.  Some market observers believe that there is going to be a surplus of accomodation in the premium segment in Gurgaon and Noida with over a dozen projects in the area. This will put pressure on prices in these suburban locations too.

However, South and Central Delhi continue to witness upbeat activity due to limited supply. According to Cushman & Wakefield, sustained activity in the premium segment is being driven by HNIs/NRIs attracted by high rentals and the prospect of capital appreciation.

Prime Residential Rental & Capital Values