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					                                                   GLOBAL ADVISORS

Monthly News LETTER

             REAL ESTATE                              January 31, 2011
                                                   Intraday Graph of REALTY
Market Cap for REALTY
       As on          Value (Rs. in
                                           (%)
 31 January 2011        Crores)

BSE Mkt. Cap       6,595,278.77       100

Index Full Mkt.
                   86,690.55          1.31
Cap
Cap Adj. Market
                   31,539.36          --
Cap


   •    RBI’s Decision to Hike Policy Rates May Affect Real Estate Sector- JLL
   •    SBI to Continue its Teaser Home Loan Scheme
   •    Husing Prices can Appreciate in 2011


RBI’s Decision to Hike Policy Rates May Affect Real Estate Sector- JLL

Real estate developers and consultants on Tuesday said RBI’s decision to hike
policy rates by 25 basis points will affect the sentiment of the property market, but
they do not foresee any major impact on housing demand and prices. “The hike in
repo and reverse repo rates by 25 basis points will have a sentimental impact on
demand, but it may not slowdown the demand in its actuality,” Jones Lang LaSalle
India Chairman and Country Head Anuj Puri said.

Home buyers might delay their decision to own property, which would prolong the
completion of the transaction, Puri pointed out. On housing prices, Puri said it
would remain stable in the metro cities. Commenting on the RBI’s policy, DLF
Group executive director Rajeev Talwar said: “The growth of economy is strong,
so we do not expect any negative impact on the property demand and prices”.
Talwar said he did not forsee any rise in interest rates. Parsvnath Developer
chairman Pradeep Jain said that there could be a short-term impact because of
rate hikes but would not have major affect on demand, which is directly related to
growth in the economy which is firm.
SBI to Continue its Teaser Home                       QUICK UPDATES
Loan Scheme

For someone who has built a                 Cautious NRI’s Investigating
reputation of standing up to the            Before Investing into Indian Real
regulator, State Bank of India              Estate
chairman Om Prakash Bhatt is                Non-resident Indians (NRIs) and people
unlikely to let his image change as he
                                            of   Indian    origin    (PIO)     investing      in
prepares to step down in March after
a five-year term as the head of the         premium       real    estate     projects     have
country’s largest lender. Despite the       become       cautious    and      are     doing   a
regulator going public with its
                                            thorough check before investing, say
concerns on the so-called teaser rate
home loans, SBI is likely to continue       senior executives in real estate firms.
with the scheme, where rates are            ‘‘The mood is to verify and ensure it is a
fixed during the initial few years
                                            good property, land and approvals are in
before turning flexible. “Every quarter
we look at the data. It is data-based. If   place, the location is good, and the
it’s good, then I would extend it,” said
                                            project conforms to the master plan,’’
Bhatt, the longest serving chairman in
recent years. “The NPAs on my loans         said Kunal Banerji, president, M3M India,

are the lowest and I also have the          after a road show in Abu Dhabi last
collateral of the customer’s house.”
                                            week. ‘‘Gone are the days of euphoric
With nearly 80% of his home loans
being under Rs 10 lakh, Bhatt said the      buying.      Today,      people     are       doing

real beneficiary was the aam aadmi.         calculated     buying.     They         are   doing
“About 2.92 lakh people have got
                                            thorough due diligence, checking out the
loans. Where is the tease in the
product? There is no risk and there is      location,’’ said Banerji, who met over 150

no opacity. There is no dilution of loan    prospective investors in Dubai and Abu
appraisal norms or documentation.
                                            Dhabi over the weekend.


                                            M3M, which is selling 3-bedroom and 4-
Husing Prices can Appreciate in
                                            bedroom apartments and penthouses at
2011
                                            its Golf Estate project, Gurgaon, for Rs
I People in India will have to shell out    3.6-10 crore each, plans to sell a quarter
more money to buy a house this year
                                            of these homes to NRIs and PIOs.
due to increasing input costs and
huge demand and supply gap, a               Niranjan Hiranandani, chairman,
report said today. “About 70 per cent
                                            Hiranandani Group, says there’s a
of the home seekers are pretty
convinced that they will have to shell      resurgence of NRI investment in India as

more money to buy a house in 2011,          opportunities have dried up in West Asia.
as compared to last few years,”
                                            ‘‘NRIs are more interested today;
Track2Realty, a real estate market
                                            enquiries and conversions from them
tracker, said in its report. The survey
                                                       have gone up,’’ he said. But there’s a
was conducted in 10 major Indian
cities including Delhi, Chandigarh,                    difference. ‘‘Earlier, the NRI investor was
Mumbai, Pune, Kolkata, Chenai and                      euphoric – they would cut a cheque,
Allahabad.
                                                       thinking how much one would earn in
Majority of the brokers and property
agents said that the property prices                   three months. That exuberance is gone.
would remain bullish in 2011 mainly                    Today, the NRI investor is taking a
on account of “huge demand and
                                                       medium to long-term call on the
supply gap and ever increasing input
cost”. The report also said that those                 property,’’ said Ashish Jerath, vice-
planning to sell houses this year                      president (sales), Emaar MGF.
would get higher returns. About 72
per cent believe that if they missed
the chance to buy a house now, “they
may not be able to but it ever”,




Global Advisors Limited (‘GAL’) is a management consulting firm operating in the corporate
finance, management advisory and research space in India and provides a range of custom
research and business intelligence services, including research outsourcing solutions.

Pallavi Goyal / Piyush Mathur

Global Advisors Limited

pallavigoyal@g                   piyushm thur@globala
pallavigoyal@globaladvisors.in / piyushmathur@globaladvisors.in

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