For private circulation only
Real Estate News Letter
21st March, 2011 to 27th March, 2011
2. Interest Rates
4. Industry News
5. Private Equity News
6. Regulatory Buzz
7. Public Markets
10. Commercial/ Retail
14. Input Cost
Trends in Nifty and CNX realty index
3.5 3.0 2.8
3.0 2.3 2.2
-0.2 0.9 0.8
21-Mar 22-Mar 23-Mar 24-Mar 25-Mar
Nifty CNX REALTY
Source : NSE
Trends of FII in equity markets
13 13 12
21-Mar 22-Mar 23-Mar 24-Mar 25-Mar
Source : SEBI
Per cent WPI-Weekly inflation data (primary articles)
22-Jan 29-Jan 05-Feb 12-Feb 19-Feb 26-Feb 05-Mar 12-Mar
Source : Ministry of Commerce and Industry
No news in this section for the week
Bhosari flyover cost pegged at 99 Tower, Mall of India and DLF-3. The RMGL trains
will have a capacity of approx 1,000 passengers and
crore; may open in April a maximum speed of 80 km per hour. According to a
company official, trains will look more aesthetic as
The under-construction flyover at Bhosari on the the overhead electricity will not be used for the
Pune-Nashik highway is again in the news for the supply of power like in Delhi Metro. Instead, the
high expenditure it is incurring. While the Pimpri- power will be supplied through Third Rail, a method
Chinchwad Municipal Corporation (PCMC) has that supplied electricity between the rail tracks.
already spent an estimated Rs 96 crore for the However, it will be fully protected from all sides
flyover in the past two years, a few other allied through insulation to ensure safety against
works, which will be taken up, will need another Rs electrocution.
―Rapid Metro will be a solution to the transportation
The Times of India, 22 March, 2011 Pune woes of commuters in Gurgaon. Besides the
aesthetics, the safety and comfort of the passengers
has also been kept into consideration. The work is
Patel Engg bags Rs 161 crore progressing at good pace and will be completed
Karnataka govt order within the stipulated time frame of 30 months,‖ said
Sarvesh Kumar Tiwari, media head, RMGL.
Patel Engineering has bagged a Rs 160.69-crore
order for the upgradation of Tinthini-Kalmala road The first privately fully-financed Metro being
from the Karnataka Government. ―The project constructed at the cost of Rs 1,088 crore will
comprises upgradation of 73.8-km long stretch from introduced the first aluminum bodied trains fitted
Tinthini to Kalmala, a part of State Highway 61 and with air-conditioning to cope with temperature
State Highway 15,‖ the infrastructure firm said in a reaching 50 degree Celsius or above.
statement today. The project is expected to be
completed within two-and-a-half years, it added. The Pioneer, 23 March, 2011, New Delhi
The Hindu Business Line, 23 March, 2011, New Road to Haji Ali-Bandra clear, but
contract still hurdle
Gurgaon to have its own Metro With the Maharashtra State Road Development
network by 2013 Corporation (MSRDC) awaiting the Environment
Ministry‘s clearance to construct a coastal road
After Delhi Metro, the millennium city of Gurgaon will between Worli and Haji Ali, the corporation is now
soon have a metro network of its own to cater to the looking at ways to end the concession agreement
commuters within the city. The work on the 5 km with Reliance Infrastructure Ltd-led (RInfra)
long stretch between Sikanderpur and DLF Phase-3 consortium to construct a sea link.
has started and is targeted to be completed by
January 2013. Equipped with latest commuters‘ According to MSRDC officials, the corporation is
safety and comfort features, the Rapid Metro Rail exploring all legal options to deal with the
Gurgaon Ltd (RMGL) will cater to over one lakh agreement. ―The MSRDC is exploring if it would
people in the first phase of its operation. have to terminate the agreement as the original plan
has changed from sea link to a coastal road. The
There will be six stations on the route -- terms of reference have changed. The MSRDC is
Sikanderpur, DLF-2, Belvedere Park, Gateway also exploring if the consortium can be engaged to
carry out the new plan for which the entire contract
may need changes,‖ an official said, requesting
The Maharashtra Coastal Zone Management
Authority (MCZMA) had cleared the coastal road
proposal last week. However, it also remarked that
as per the new Coastal Zone Regulations, the
portions of the recommended road on reclaimed
land cannot be permitted. The MCZMA forwarded
the proposal to the Ministry of Environment and
Forest (MoEF), recommending an in-principle
The Indian Express, 23 March, 2011, New Delhi
New airport near Chennai to have
The proposed greenfield airport at Sriperumbudur
near Chennai will now have four runways, instead of
the two planned earlier. The decision will see the
number of passengers and aircraft being handled by
the new airport increase manifold. Official sources
said that the master plan for the airport was being
changed to accommodate four runways.
―Land is already available for the proposed airport.
So, it has been decided to make an airport which will
take care of future growth needs of the sector,‖ the
sources said. The Airports Authority of India will
shortly submit the project report to the State
Government. Sources indicated that despite the on-
going modernisation of the existing Chennai airport,
a new airport would be required.
The Hindu Business Line, 22 March, 2011 Chennai
Rising realty rates make small premises in and around Mumbai. ―Renting out flats
in redevelopment projects is on the rise. Renting
town homes a reality places for commercial and industrial purposes is
also increasing,‖ he said.
People are moving to smaller towns as the realty
market in and around Mumbai has been hit by Times of India, 21 March, 2011, Mumbai
stagnation, government officials have noticed.
The trend is reflected in a record increase in
Mumbai home prices fall 20
collections of stamp duty and registrations for the percent from peak
current fiscal. Even as transaction volumesin and
around Mumbai remain affected by steep property Mumbai home prices have declined 20 percent from
prices, collections are expected to witness an over their 2010 peak as lower sales, higher land values
30% jump over the estimated target. and increased borrowing costs forced developers to
reduce prices to woo buyers, according to Jones
As against an estimated target of Rs 10,478 crore Lang LaSalle India. Home prices, which increased
for 2010-11, collections are likely to scale the Rs 3060 percent last year, have returned to 2008
14,000 crore mark by March-end, a rise of 33% levels, Sanjay Dutt, chief executive officer of
above the set target. While the rise in property business at the Indian unit of Chicago based Jones
prices in and around Mumbai contributed to the rise, Lang LaSalle Inc., said in a report on Monday. Dutt
officials said transaction volumes rose appreciably expects prices to remain at these levels until the
in smaller towns. three-month monsoon season ends in September.
The government collects up to 5% of the value of The central bank's eighth interest rate increase this
the property in stamp duty. Charges for registration year to curb inflation has led to tighter liquidity and
of the property document are collected separately. higher borrowing costs for developers.
An official said an increase in home buying volumes
in smaller towns indicated that the areas were Mint, 22 March, 2011, Mumbai
rapidly urbanizing and becoming more accessible
for building homes. Mumbai witnesses fall in real
Statistics of registered property documents
indicate that several first home buyers are estate sales registrations
increasingly buying properties in such areas, a
senior official said. Houses in smaller towns are a hit It‘s been a weak start to the year for the Mumbai
with second and third home buyers, who use them real estate market with the number of property sales
as weekend homes. registered in India‘s financial capital continuing to fall
for the second consecutive month. The downtrend in
Some experts, however, have a different take on the sales volumes for the month of February is similar to
rise in stamp duty collections. Sunit Gupta, co- that seen in January. Sales registrations at 4,716
author, are down 22 percent year-on-year and 7 percent
Stamp Duty Ready Reckoner and Market Value of month-on-month, according to a study by Prabhudas
Properties in Mumbai, 2011, said transaction Lilladher, which points out that even after adjusting
volumes were too small to account for a big jump in for the fewer days in February, the numbers would
collections. ―Transactions in and around Mumbai be more or less similar to those seen last month.
account for 70% transactions,‖ he said.
―The three-month moving average graph for sales
Gupta attributed the record collection to high registrations clearly illustrates a continuation of the
property prices and an increasing trend of renting
downtrend,‖ the brokerage notes, adding that Stop-work notice on Virar
volumes for the lease segment continue to trend up,
with the numbers coming in at 8,055, up 20 percent township to continue
year-on-year. The continuous rise in the number of
properties being leased is probably the result of The work at Evershine Global City, a township with
prospective home buyers not being able to afford 311 residential buildings, commercial complexes
purchases after the sharp rise in property prices and malls spread over 9.32 lakh sq m of land at
seen over the last one and a half years. It‘s possible Dongre village near Virar will continue to be stalled,
that prospective buyers are waiting for a correction. at least for a while. The Bombay high court on
Monday declined to stay a stop-work notice issued
Sales in Mumbai‘s suburbs fell sharply, down 26 to Evershine Developers, which has undertaken the
percent year-on-year in February, on the back of a project in collaboration with another partnership firm,
26 percent year-on-year drop in January. In Enigma Constructions.
contrast, sales in Mumbai city at 824 are up 13
percent year-on-year, albeit on the lower base of The developer moved the high court challenging the
last year. stop-work notice issued by the Vasai-Virar Municipal
Corporation on January 11. Counsel for the
The Financial Express, 22 March, 2011, Mumbai developer, Iqbal Chagla, urged the court to allow
them to continue work stating the developer was
suffering losses to the tune of Rs 75 lakh per day
But many builders are resisting because of the stop-work notice.
price correction, creating hype
Hindustan Times, 22 March, 2011 Mumbai
Sales for home properties have dropped by
approximately 50 percent in the past few months, Mumbai realty robust despite
but barring a 5-10 percent correction, there is
resistance from builders to correct prices. But real small fall in flat sales in Feb
estate brokers and consultants believe the
phenomenon will not continue for long and property Mumbai's real estate market continues to be robust
sales are set to slump by as much as 30 percent in despite a minor blip in February when flat sales
few months due to rising interest rates and tighter clocked a 2.40 per cent decline, a leading industry
lending norms. body said. The city reported a marginal decline in
flat registrations at 16,341 in February as against
―Developers are in denial mode,‖ said Pranay Vakil, 16,743 registrations in the year-ago period, data
chairman, Knight Frank, global property consultants. from the Maharashtra Chamber of Housing Industry
―As post-recession, market conditions improved, (MCHI) showed.
developers jacked up property rates by almost 60
percent and are aggressively building large land "There has been no sharp decline in Mumbai's real
banks by borrowing money at high interest rates estate market--there has only been a marginal
from banks. With plummeting sales due to decline in sales figures of residential apartments,"
unrealistic prices and banks seeking repayment MCHI said in a statement here.
having to follow strict Reserve Bank of India norms,
developers are facing a tightening liquidity situation. The decline in flat sales in the first two months of
We will see a softening in property rates,‘‘ Vakil this year is not severe, MCHI's President Sunil
added. Mantri said, admitting, however, to a small dip in the
same during the period. Although it is a fact that flat
The Times of India (Mumbai edition) , March 22, sales did decline in the
first two-months of the current year, the extent of fall itself.
is not that severe as is being made out to be by
some," Mantri said. OUTLOOK: Real estate buyers and sellers are
conjecturing over how the Mumbai residential real
In 2010 (January-December), Mumbai clocked a estate market will fare over the next three quarters
total registration of 2,17,466 as compared to of 2011. Evidently, residential property demand will
1,94,885 in the previous year, MCHI data showed. experience further pressure in 2011. The market
saw a period of unprecedented expansion in the first
The Economic Times, 26 March, 2011, Mumbai three quarters of 2010, and it is reasonable to
expect that price appreciation will flatten or decline
Mumbai Developers Should Look in many areas.
Beyond Volumes & Pricing Given the current uncertainties surrounding
regulatory aspects such as parking FSI, some
Ramesh Nair, MD, WEST INDIA,Jones Lang prominent proposed high-rises will face delayed
LaSalle India approvals, impacting sales. It is also expected that
developers will offer smaller units without
After a one-year period starting in the third quarter of compromising on the amenities to make them more
2009, which saw a strong recovery with a record affordable to a larger customer base.
40%-plus increase in prices, the Mumbai residential
real estate market has been seeing a slowdown RECOVERY: The current correction may last for as
over the past two quarters across various micro much as 4-5 months, or even during the festive
markets. season. However, a full-fledged recovery to
Mumbai‘s glory days will happen only if the
The past six months have seen the return of government puts more pressure on banks to lend
negotiability in asking prices, and saw the return money to the real estate and housing sector and
from a sellers‘ to a buyers‘ market. Both registration interest rates on home loans drop. Meanwhile,
data and home loan disbursals are indicating a Mumbai‘s developers will play a cautious game and
distinct slowdown. The number of apartments being avoid launching too many large projects in the next
sold in the first quarter of 2011 is considerably lower couple of quarters.
than in the corresponding period of 2010.
Developers who were selling their entire projects in Like most others, Mumbai‘s residential market is not
a few weeks are now taking months to sell their immune to demand-supply dynamics. Any major
unsold stock. increase in supply will surely have an impact – with
increased supply, vacancy rates will increase and
Many home buyers are playing the waiting game, developers have to reduce pricing. Moreover,
anticipating a further correction. The key reasons interest rates are likely to rise marginally again,
behind this slowdown are higher prices, higher further curbing the demand for homes in the short
interest rates impacting affordability, lack of liquidity, term.
scams diluting investor sentiment – and, to a lesser
extent, excess supply in a few micro markets. Any Mumbai‘s real estate story will continue to make for
slowdown in the economy has not been a key a fascinating read, and it will always pay off in the
criterion. long run. However, developers need to realise that
volumes are inversely related to price… the lower
Many developers and agents admit that sales have the price, the higher the opportunity.
slowed down. Gone are the days when large
numbers of apartments were sold during the launch The Economic Times, 25 March, 2011, Mumbai
Private Equity News
Kotak property arm to raise $500 assets under management, plans to invest close to
$100 million over the next couple of months in major
mn for India buys Indian cities, he said.
Kotak Realty Fund, the property investment arm of The investments will mainly be in the residential
India's Kotak Mahindra Bank, plans to raise as much property assets, he said, citing Delhi, Mumbai and
as $500 million of funds by the second quarter of Bangalore as target markets. Private equity
this year, in a bet on the long term case for property investment in India nearly doubled last year to $7.97
in Asia's third-largest economy, a top official said. billion from a year earlier, according to a report by
research firm Venture Intelligence.
* To invest $100 million in property in coming
months Companies positioned to benefit from rising
spending power in the world's second-most
* Targets opportunities in Delhi, Mumbai, Bangalore populous country, with an economy growing at
about 8.5 percent a year, have been especially
The fund intends to raise about $150-$200 million sought after by private equity investors.
from domestic investors and another $300 million
from global markets, its director, V. Hari Krishna, However, rising interest rates and tighter loan
told Reuters in an interview. approvals could slow near-term growth in the Indian
property sector, Harikrishna said. Param Desai, real
The long-term macro fundamentals are intact. The estate analyst at Angel Broking, said he expects a
markets have nearly doubled since 2005 and we price correction over the next three to four months of
have seen a cyclical turn. So, its a good time for 15-20 percent in Mumbai and 10-15 percent in
investments, he said. Delhi, with the satellite city of Gurgaon especially
vulnerable. He expects prices to hold up in
Private equity funds, including four domestic and 10 Bangalore and Chennai.
international funds, have invested a total of $14
billion in Indian property during the last ten years, India's central bank raised key interest rates last
according to an industry analysis. week for the eighth time since March 2010. Its a
cycle. We have seen both ups and downs during the
Of that, private equity firms have sold Indian last half-a-decade. And we could also witness the
property holdings worth nearly $2 billion, Krishna revival in demand, Krishna said.
Separately, Kotak is raising a $300 million private-
Last week, Kotak Realty Fund sold one of its equity fund to invest in infrastructure projects in the
property assets - Peepul Tree Properties Pvt Ltd - to country.
Tata Realty Fund for 5.25 billion rupees ($117
million). The fund had made an initial investment of The Financial Express, 23 March, 2011, New Delhi
950 million rupees.
Many of the investors are concerned over exits, but
HDFC realty fund to exit Bangalore
we could demonstrate this as a market where we IT SEZ
can make decent exits too, said Krishna.
Realty fund HDFC Property Ventures Ltd is selling
INVESTMENT ACROSS CITIES its investment in a technology export zone in
Bangalore back to the developer, making its fifth exit
The fund, which has about $750 million worth of in recent months.
Private Equity News
The sale will earn the fund returns of `490 crore on Century raises 200 cr from Kotak
the `210 crore it invested in Manyata Business Park,
an information technology (IT) special economic Bangalore-based Century Real Estate has raised Rs
zone (SEZ) in north Bangalore, less than five years 200 crore from Kotak Realty Fund, the property
ago, said an executive of HDFC Property who is investment arm of Kotak Mahindra Bank, through a
briefed on the matter. private placement of non-convertible debentures
―It was an excellent investment for us where the
developer has delivered well, with 7.5 million sq. ft The fund fully subscribed to the issue last week.
already leased out in the (12.5 million sq. ft) SEZ,― Century managing director Ravindra Pai declined to
the executive said on condition of anonymity. ―How comment on the matter.
ever, the liquidity situation is tight in real estate and
there may be a slowdown in exits for a temporary The money will be invested in a special purpose
period.― vehicle (SPV) floated by Century to develop a 10-
acre residential project coming up on Old Airport
HDFC Property, the realty fund of India's largest Road in Bangalore. The project comprises of 650
mortgage lender Housing Development Finance high-end apartments costing upwards of Rs 1.5
Corp. Ltd, had put up for sale six office properties in crore each.
which it had invested about four years ago, as it pre-
pared to return money to investors. The fund's Last year too Century had raised money – Rs 100
previous exit was from Embassy Golf Links, an crore -- from Kotak through NCDs. Kotak, in turn,
office property in Bangalore. The sale to a clutch of sold 80% of the book to high networth individuals
wealthy individuals earned it returns of `220 crore on (HNIs). The company is using the funds to develop 7
an investment of `51 crore, the executive said. new projects with a built-up area of 1.7 million sft.
Analysts said HDFC Property's recent exits were TOI had previously written that the company is in
triggered by the quality and rental yield of its assets discussions with Baring Private Equity Partners
across property markets. India (BPEP) and Morgan Stanley to raise $150
million . This too could be concluded soon.
Office properties are finding more buyers as these
are be- ginning to generate substantial rental Dayanand Pai-promoted Century Real Estate has a
income, said Ambar Maheshwari, head of land bank in excess of 3,000 acres around
investment advisory at DTZ International Property Bangalore valued at over $2 billion.
Advisors Pvt. Ltd. ―We will continue to see a
combination of buybacks and secondary sales, The Hindustan Times, 25 March, 2011, Delhi
where funds exit by selling their stake to an- other
fund,― said Maheshwari.
4 real estate funds raise Rs. 2,500
Bangalore, India's technology hub, is seeing an crore
increase in demand for space in dedicated export
zones as many blue- chip IT firms are expanding At least four real estate funds are raising money
their offices to keep up with a growing economy. about Rs. 2,000 crore to invest in rental yield assets
There is limited ready-to-move space in these zones because of the lower risk and regular income
but a significant supply addition is expected in associated with such property compared with new
Bangalore by mid-2012, BNP Paribas Real Estate developments. Interest in rental yield assets has
Research, India, said in its latest report. also increased as there is now a substantial stock of
property with high specifications that was
Live Mint, 24 March, 2011, Bangalore
Private Equity News
established in the past three-four years, It‘s the first following the slump of 2008-09. Delays, occasioned
time so many rental yield-focused funds are there in partly by that slowdown, have also eroded the
the market,‖ said Amit Goenka, national director, internal rate of returns.
capital transactions, Knight Frank India Pvt Ltd.
Rental yield investments have done better. Earlier
This indicates a shift in the model of investment this month, Kotak Realty Fund sold its stake in
from development, such as residential projects, to Peepul Tree Properties Pvt. Ltd, an information
developed—commercial space that‘s been technology park, to Tata Realty and Infrastructure
completed and rented out, he said. In mature Asia- Ltd, for Rs. 385 crore, making a fourfold return.
Pacific markets, 70% of transactions are for Kotak had invested Rs. 95 crore in 2006.
acquiring existing yield properties.
Private equity firms are drawn to stabilized assets
JM Financial Property Fund, the real estate fund of as they don‘t carry development risks, which are
JM Financial Ltd, managed by Infinite India becoming increasingly difficult to underwrite, given
Investment Management, is aiming to raise a Rs. the political flux, said Anuj Puri, chairman and
400-500 crore rental yield fund known as JM country head, Jones Lang LaSalle India, referring to
Financial Real Estate Income Fund from domestic issues such as land acquisition.
investors. The fund has already registered with the
regulator, Securities and Exchange Board of India, The demand for office space in India over the next
or Sebi. five years (2010-14) is estimated at an approximate
240 million sq. ft. The National Capital Region (Delhi
―We plan to raise the fund from high networth and its suburbs), Mumbai and Bangalore will
individuals (HNIs) and domestic institutions over the account for 46% of this demand, according to the
next couple of quarters,‖ said R.K. Narayan, 2010 Cushman and Wakefield India Real Estate
director, Infinite India. Investment Report.
Anand Rathi Financial Services Ltd (ARFS) is ―For developers, this is a good alternative source for
raising a Rs. 250 crore rental yield fund along with funding and (to) monetize their assets because real
real estate consultancy firm Knight Frank. After estate mutual funds (REMF) haven‘t taken off yet
deploying up to 75% of this money, they plan to and real estate investment trusts (REIT) have been
raise a $200 million offshore fund. Indiareit Fund a non-starter in India or for Indian developers,‖ said
Advisors Pvt. Ltd, the real estate fund promoted by Narayan of Infinite India. REMFs invest in property,
Piramal group chairman Ajay Piramal, plans to raise either directly or indirectly.
around Rs. 1,350 crore in a debt fund and a rental
yield fund this year. Live Mint, 25 March, 2011, Mumbai
LIC Housing Finance Asset Management Co., a unit
of LIC Housing Finance Ltd, is planning to raise a
Rs. 500-750 crore real estate fund which will invest
in rental yield and other assets within real estate.
―We are tying up with different domestic institutional
investors and financial institutions,‖ said a top LIC
Housing Finance official, who didn‘t want to be
named. ―We have registered with Sebi and are likely
to launch it by June this year.‖ Returns from
development projects have generally been lower
than expected because of market conditions,
Home loan foreclosure fee waiver Builders face tougher norms in
not viable: Bankers cessed redevelopment
Although the ministry of finance has suggested The Maharashtra government‘s proposal to levy
public sector banks to waive off foreclosure charges stamp duty on the transfer of residential tenancy
on housing loans, major bankers are not yet ready rights as per Ready-Reckoner rates will have a huge
for the move. In a recent communique to public bearing on the redevelopment of cessed properties
sector banks and the Indian Banking Association in the island city. Experts and developers say this
(IBA) as reported in FE on February 23, the finance move will make it more difficult for unscrupulous
ministry advised lending institutions not to impose builders to make a quick buck, stem the rot in the
any penalty in case a borrower pre-pays home loans redevelopment of old buildings, and introduce a
from his/her own funds. certain degree transparency in the system.
However, KR Kamath, CMD of Punjab National
Bank, said the foreclosure charges are quite valid Under the prevailing rules, tenancies can be
hence there is no question of going back. ―I have transferred by paying a nominal fee of Rs 20 per sq
certain liability to commit during the tenure of the ft. A stamp duty consultant who did not wish to be
loan, and hence, I need some additional money to named said, ―This is a very small amount, and it was
compensate in case the account was getting closed easy for developers to create bogus tenancies. A
beforehand,‖ he said. developer undertaking a redevelopment scheme
could make huge profits if the flats are in his name.
TM Bhasin, CMD of Indian Bank, said the banks had This is especially the case in south Mumbai where
put foreclosure in the banking industry at a time property rates are over Rs 30,000 a sq ft.‖ It is not
when credit demand was sluggish. However, things uncommon for developers and landlords to evict
have changed today. Now the banks have entered tenants or undervalue the price of the flat in the sale
into an era of robust credit demand. agreement, thereby causing loss of revenue. ―With
this new proposal, the government has sought to
―So, I won‘t mind if some of my borrowers want to rectify this,‖ said the consultant adding that up until
shift their loans. I mean, we are already offering now the concept of stamp duty is alien to old
competent rate of interest for our loans. Still, if any properties.
lender is ready to offer an interest rate, which is
even less than his bank‘s cost of deposit and thus is ―One has to shell out a maximum Rs 8,000 as
ready to spoil one‘s balance sheet, then I have no stamp duty to register the tenement in a new name,‘‘
issue,‖ Bhasin said. But, these kinds of activities are he said. By insisting on stamp duty as per the
quite few in the industry. ―I don‘t agree that if we do Ready-Reckoner rates, the government has just
so, then foreclosure will become a common feature made it difficult for developers to create bogus
at my bank,‖ Bhasin added. tenancies while redeveloping a cessed property
under the 1991 Development Control Regulation 33
VR Iyer, executive director of Central Bank of India, (7), said another housing expert.
said the bank charged pre-payment penalty on
home loans so as to have cover for the funds, and So, if a tenant under the pagdi system wishes to
assets. ―Whether the borrower is going for transfer the tenancy he or she will have to shell out
foreclosure of his home loan from his own cash more on stamp duty. This will be transferred to the
flows is one of the factors we look at while finalising person purchasing the property.
the pre-payment penalty,‖ he said.
The Financial Express, 24 March, 2011, Mumbai The Times of India, 24 March, 2011, Mumbai
The construction work will be limited to the area,
Lavasa gets conditional nod to 614 hectares, for which permission was granted by
complete hill project the Pune collector. It will have to set up a high-level
verification and monitoring committee, which will
The Environment Ministry's expert appraisal include experts, representatives of the Union
committee has given conditional permission to Environment Ministry and district administration.
Lavasa Corporation to complete pending Lavasa will have to commit funds, as indicated by
construction work on 257 residential buildings in the the expert report on the amount of penalty, re-
3,000-crore planned hill station township. The compensation and creation of an environmental
incomplete buildings are located in a 614 hectare restoration fund. It will also have to meet conditions
area of the proposed hill town. stipulated by the ministry and agencies of the state
The committee has said that Lavasa needs to
rework the planning and development of the entire The decision by the expert committee to allow the
project, including the environment impact corporation to complete unfinished construction in
assessment. It will have to submit a revised the 700 hectare area was taken as "substantial
proposal. The recommendations have been development" had already taken place there. "In
accepted by the ministry. The Lavasa case comes view of this and considering all related
up for hearing in the Bombay High Court on Friday. consequences, there is no other alternative before
the expert appraisal committee, except appraising
"The EAC has made certain recommendations, the project ex-post-facto and specifying certain
which we have accepted. And that is being conditions with a view to minimise future damages.
presented in the court on March 25," Environment However, for the remaining area, where construction
Minister Jairam Ramesh said. The expert appraisal is yet to take place, there is still a chance to
committee has examined the application for phase I examine, analyse, review and correct the entire
of the project, which covers an area of 2,000 model of development in the right environmental
hectares. The hill station township will finally perspective," the committee said in its
encompass an area spanning 5,000 hectares. recommendations.
According to reports from Maharashtra's town The Economic Times, 25 March, 2011, Mumbai
planning and valuation department, the Pune
collector had given permission for non-agricultural
use for an area of about 614 hectares. In this area,
the plan to build 935 residential buildings was given.
Of the 935 residential buildings, 131 buildings are
almost completed, 257 buildings are under
construction above plinth level and the construction
for 547 buildings is yet to begin.
The expert committee has recommended that
permission to complete the construction of the 257
units is subject to the corporation meeting five
conditions. Lavasa will have to guarantee that there
will be no hill cutting, digging, excavation, and that
no activity involving generation of soil, its use or
transportation/disposal will be carried out.
Gitanjali Gems to rejig business; Sobha Developers' stock price
eyes realty target cut
Gitanjali Gems plans to restructure its business Enam Securities has cut the stock price target for
under five verticals — jewellery manufacturing, Sobha Developers to Rs 313 from Rs 324, but
branding, retailing, international business and maintained a buy rating despite a slippage in sales
infratech. ―The idea of the restructuring is to unlock volumes. In a note, the brokerage said slippage in
value for investors as each of our business verticals sales volumes and higher costs and taxes shall result
have grown substantially and need dedicated focus in a 10 percent decrease in FY11 profits. However,
to grow them even further,‖ Mehul Choksi, Chairman increase in land prices and realisations in Bangalore
and Managing Director, said. shall compensate in the medium term, it said.
As part of the infratech business, Gitanjali plans to The Financial Express, 22 March, 2011 Mumbai
redevelop land in the city's western suburbs of
Borivali and Andheri and in Panvel in Navi Mumbai.
This will be possible by shifting their facilities.
Madhucon bags Rs 1,500-crore
Likewise, the company plans to launch projects in highway project
Madhucon Projects Ltd announced that it has
The Hindu Business Line, 22 March, 2011, Mumbai received a letter of award from the National Highways
Authority of India (NHAI) for four-laning of the Ranchi-
Rargaon-Jamshedpur section of National Highway-33
Tata Housing to invest Rs 10,000 between km 114 and km 277 in Jharkhand. The
crore, develop 40 m sq ft in three company said in a statement that it would
years commission two toll-ways in Tamil Nadu by month-
Tata Housing Development Company Ltd plans to
invest nearly Rs 10,000 crore in developing another The project, awarded under the National Highway
40 million sq ft of housing across India in the next development programme Phase III, will be taken up
three years, a company official said. This includes on design, build, finance, operate and transfer
the company's plans to invest nearly Rs 3,500 crore (DBFOT) on annuity basis. The 163-km stretch
in low-cost and affordable housing. project is estimated to be worth Rs 1,500 crore and
have annuity component of Rs 133.20 crore, with a
The company, which signed an MoU with the concession period of 15 years, including construction
Gujarat Government during the Vibrant Gujarat phase of 912 days.
Global Investors' Summit in January 2011, will
invest Rs 1,000 crore to develop two integrated The Hindu Business Line, 22 March, 2011 Hyderabad
townships, Rajeeb Dash, Marketing Head, said.
Work on both the projects is expected to star in the
next three to four months and it will be executed by Probe sought into Balwa's 140-acre
Small Value Housing Ltd, a 100 percent subsidiary Goa seaside project
of Tata housing launched in 2010.
After creating waves in the Lok Sabha for his role in
The Hindu Business Line, 22 March, 2011, the 2G spectrum allocation scam, Shahid Balwa, co-
Ahmedabad owner of Dynamix Balwas Realty Group (DB Realty)
has now held centre-stage in the Goa Assembly on
Tuesday. The Opposition BJP on Tuesday
demanded a probe into a controversial 140-acre
seaside project, being developed by a firm co-
promoted by Balwa‘s DB group.
BJP legislator Damodar Naik said the Town and
Country Planning (TCP) department should probe
the Balwa-promoted firm DB Realty and how it came
to acquire huge tracts of prime coastal land.
He told the Assembly that the State should keep an
eye on the mafia investing heavily in the State‘s real
estate sector. ―Shahid Balwa, the promoter of Aldeia
de Goa is now in CBI custody in the 2G spectrum
scam. DB Realty and Balwa himself is linked to
Dawood and Chota Shakeel,‖ Naik said.
―In whose hand is Goa going into? These big land
sharks who are coming here, are linked to the
mafia,‖ he said, adding the TCP should probe the
ownership titles of the Aldeia de Goa project. ―This
is a dangerous precedent for Goa, because the
mafia is investing money here,‖ Naik claimed.
Aldeia de Goa, is located near the Siridao-Bambolim
bay, on the outskirts of the capital and boasts leisure
facilities including a 30,000 sq ft club house,
swimming pool, jogging track, well equipped gym,
amphitheatre, tennis courts, a 5-star hotel from the
Hyatt chain, a shopping mall and food court.
The Pioneer, 23 March, 2011
No news in this section for the week
Ashiana Housing completes time. We are very enthused by the success of our
first township, Amstoria, and we are confident
Ashiana Aangan phase-III Astaire Gardens will get similar response," he said.
Ashiana Housing, one of the growing developers in "Astaire Gardens comprise 45 per cent open and
India, hands over Ashiana Aangan Phase 3, green areas and is ideally located off the NH 8 and
Bhiwadi. The group has announced the completion Golf Course Extension Road with a panoramic view
of Phase 3 of its most prestigious group housing of the Aravallis," the company's Senior Vice-
project. President (Marketing) Amit Raj Jain said.
A half an hour‘s drive from Gurgaon, Ashiana With an entry threshold of Rs 60 lakh, the property is
Aangan is strategically located at Bhiwadi, one of most competitively priced, Jain added.
the fastest growing townships and industrial hub in
northern India which caters to your requirements in The Financial Express, 23 March, 2011, Delhi
every single way and it‘s proximity to commercial
hubs in Delhi, Gurgaon & NCR.
The Phase-3 of Ashiana Aangan, consist 280 units
True Value Homes to invest Rs 800
comprising a total saleable area of 400,000 sq ft. crore
The first two phases of Ashiana Aangan which
comprises of 640 units has already been handed Chennai-based real estate developer, True Value
over last fiscal and people have started Homes India Pvt Ltd (TVH), is planning to invest Rs
accommodating it already. 800 crore over the next three years to develop
around 12 projects, majority of which will be in the
The project is claimed to be one of the biggest group residential segment.
housing projects in Bhiwadi and hopes to be a
landmark once all the phases are completed. The company has so far developed six million sft
cumulatively in both commercial and residential
Business Standard, 21 March, 2011, New Delhi space. It is now developing around five million sft
with major share of the projects in Chennai. It has a
BPTP launches second premium few more projects in the pipeline -- to develop
around seven million sft -- and which may go up
township in Gurgaon according to the market condition in future, said N
Ravichandran, chairman, TVH.
Real estate developer BPTP Ltd said it has
launched its second premium township Astaire ―We have projects in Chennai, Coimbatore and
Gardens at upcoming Sector 70 A, off NH-8 here. Trichy. TVH is also looking at the fast growing Tier II
cities for property development. We are planning a
"Spread across 102 acres, Astaire Gardens is an joint venture project in Madurai. Our current pipeline
eclectic mix of contemporary design comprising is to develop a total area of around 12 million sft on
plots, independent floors and villas, large plot sizes, around 12 projects,‖ said Ravichandran. The
24x7 facilities, security, a state-of-the-art health investment would be from internal accruals and
centre, schools, a creche, sanctuary and the club," debt.
BPTP Ltd Director (Strategy & Systems) Sandeep
Bedi said. Besides, the company is looking at starting projects
at Thiruvananthapuran and Kochi in Kerala in the
"We are the first real estate player to launch two medium segment. It also has plans to start a project
unique townships in Gurgaon in such a short span of in Bangalore. However, he refused to divulge details
of projects stating it was in the pipeline. Apart from The Whisper Valley in Jubilee Hills,
Koncept has offered several landmark residential
Of the total projects, 80-90 per cent would be projects in Hyderabad, including Ambience Fort,
residential, while the rest would be in the Ambience Anthem, Ambience Canton, Trails and
commercial space, he said. Palm Country, among others. It has recently taken
up its first project in Visakhapatnam.
TVH recently announced the launch of its Rs 125-
crore high-end green residential project, TAUS, at The Botanika will be ready for occupation by
Old Mahabalipuram Road, near here, with 403 December 2012. The developer plans to take up the
apartments. The company, which clocked a turnover second phase of the project with two more towers of
of Rs 500 crore in the fiscal 2009-10, expects to end 23 floors each, which will take another 24-36 months
the current fiscal with Rs 650 crore. to take off.
Business Standard, 23 March, 2011, Chennai MP Agrawal, chairman of Koncept Ambience, says
being at Gachibouli, the luxury condominium project
Luxury condominiums in makes it the most sought after location, as it is not
only in the epicentre of the financial district, but also
Hyderabad soon in proximity to all the relevant IT hubs and social
infrastructure like retail, entertainment, fine dining,
Koncept Ambience, a Hyde-rabad-based developer schools, colleges, etc. At le-ast three five-star hotels
known for developing the country‘s first villa and a major commercial complex are coming up
township, The Whisper Valley, in the city, is coming near the project. They are expected to be within
up with a high-end luxury condominium project, The 1,000 metres from The Botanika.
Botanika, near Hi-tech City, in the IT hub of Andhra
Pradesh. On the rising competition, Agrawal said, ―The
immediate competitors in the luxury segment and in
The residential project in Gach-ibouli is spread over the neighborhood are Lodha and Emaar in terms of
7.5 acres of land and consists of 278 condominiums price tag, but our project has an edge considering its
in three 23-storeyed blocks, overlooking the 130- location – close to the IT hub and overlooking the
acre Botanical Gardens. The size of single floor Botanical Gardens.‖
plate condominiums varies from 3,700-4,375 sq ft,
while that of the sky-high villas (duplex) varies from Financial Chronicle, 24 March, 2011,
6,000-8,000 sq ft. In all, the total built-up area will be
one million sq ft.
Kent offers luxury villas in
The project also consists of an independent tower, Bangalore
nesting a suspended clubhouse from 16th to 19th
floor. The clubhouse offers features such as Bangalore-based deve-loper Kent Projects has
temperature control dip pool, business centre with la-unched a luxury villa project, Kent Novella. It is
conference facility, fine dining facility like barbeque developing the villas jointly with Anchor Buildcon
and multi-cuisine restaurant, gym with top of the line and Triangle Reality Ven-tures.
equipment and a library.
Spread over 20 acres, Novella will consist of 109
The developer is offering all the amenities that villas. The size of the villas will vary from 2,400 sq ft
complement the mo-dern and discerning lifestyle. to 4,000 sq ft. The 4BHK vaastu-compliant villas will
The price of condominiums starts from Rs 1.8 crore. be in three categories – north facing, east facing and
However, the developer will provide the price on west facing. Each villa will have its own terrace
request, based on the quantum of customisation.
garden, meditation pool, barbeque pit, home theatre Unitech has received ―over 300 bookings, garnering
area, bar counter and gym area.The prices start almost Rs 200 crore‖ in its Unitech South Park
from Rs 1.9 crore. The project is scheduled to be project in Gurgaon, the company said in a
completed by the middle of 2013. statement.
―Kent Novella is being designed to bring about a The country‘s second largest realty firm had
different lifestyle. It will include all features and announced in February that it plans to make
facilities that can invigorate an individual‘s body and available 10 million sq ft (msf) of area in the next
soul. In a true sense, it will be an idyllic existence to few months. In February last week, Unitech had
cherish,‖ said M Wilson, head (sales) of Kent launched a township project in Rewari.―These are in
Projects. line with our business plan to launch almost 10 msf
in the next few months,‖ Unitech Managing Director
Kent Novella is situated 12 km from the Hebbal Mr Sanjay Chandra said.
Flyover, 14 km from Manyata Tech Park, 9 km from
Bangalore International Air-port and 900 metres ―The demand and pricing environment of the
from National Highway 7. The company believes residential product is stable and there has also been
that Novella‘s proximity to the international airport is a marked improvement in the demand for office
its USP. spaces. We are working on a wide array of projects
to tap this growing demand,‖ he added.
The township will be surrounded by lush landscaped
gre-en-ery on three sides, 40-ft wide ma-in Spartek The Hindu Business Line, 24 March, 2011, New
roads and 30-ft wide internal roads with trees, Delhi
streetlights and walkways, the company said.
SOHO apartments coming to
The luxury residential project will also feature an
exclusive cl-ubhouse covering 15,000 sq ft built-up Gurgaon
area, with an additional 5,000 sq ft area for
swimming pool, and a landscaped lawn complex One of the major concerns that affect professionals
spread over two levels. living in a metropolitan city is the amount of time and
energy spent in commuting to the workplace. The
According to the company, the clubhouse is option of being able to ―walk to work‖ would be
thoughtfully located in the south-east corner of the welcomed by most metro-dwellers. This is the
site, thus making it accessible to non-residents from concept behind Vigneshwara Developers‘ Smart
the road, while retaining the privacy of residents. Office Home Office (SOHO) project, which the
The clubhouse will consist of a coffee shop, a multi- co-mpany claims would bridge the gap between
purpose hall, an indoor games centre, a massage residence and office.
room and wi-fi connectivity.
Coming up in Sector 74 of Gurgaon, SOHO is
Financial Chronicle, 24 March, 2011 targeted at the senior management of companies,
with homes th-at are accompanied by a ―virtual
office‖. What this means essentially is that one can
Unitech sells 300 housing units for manage one‘s office from home by combining the
Rs 200 crore in Gurgaon residence and work place.
Realty firm Unitech on Wednesday said it has sold Sunil Dahiya, managing director, Vigneshwara,
over 300 units worth Rs 200 crore in its mid-income explained, ―In a place like Delhi, the central business
housing project at Gurgaon launched last week. districts (CBDs) that we had earlier were Nehru
Place or Rajendra Place. With the economy in top firms. Dahiya explained, ―We are talking
evolving over the years, companies have moved to ab-out individuals who will want to work from
areas like Gurgaon, which are the new CBDs. Monday to Friday, and hop off to farmhouses to
Companies that arrive in India send their spend the weekends. Hence, the studio
torchbearers with a small team first to break the ice. apartments.‖
They are the core professionals who would not want
to be restricted in their efficiency by wasted hours of Construction on the project,with an entire built-up
work. We have tried to fit the home and the office area of 2 lakh sq ft, has already begun and it is
around their convenience, around the hours when expected to be ready by 2014.
they want to work, and not vice versa.‖
Financial Chronicle, 24 March, 2011
The virtual office offers features like telepresence
and a globally accessible telephone number. Your Ground Realty Key Transactions
calls would be screened at a BPO and messages
sent to your cell phone. You can then exercise the DELHI
option of taking or rejecting that call. With
telepresence, you would be able to attend meetings A 2,587-sq-ft luxury apartment was sold in Sector
being held at multiple destinations at the same time. 57, Gurgaon at a price of . 1.45 crore, all inclusive.
This is a secondary sale transaction. This apartment
Dahiya informed that the telepresence studio, which is located on the eighth floor of one of the high-rise
he calls a ―shared resource‖, would also enable towers and the buyer had to pay . 100/sq ft as
residents to transfer a record of their heart beat and preferred-location charges, which is included in the
blood pressure and other routine checks to the price. The unit comes with two car parking spaces.
doctor, eliminating the need for frequent visits— This group housing project is built on around 14
again a time-saving mechanism. acres of land area with ample open spaces. The
apartment comes with amenities like 100% power
It helps that the SOHO complex is part of the 2 backup for flats and common areas, security and
million sq ft business park that Vigneshwara is door-phone facility, a well-equipped club and a
coming up with in Gurgaon. Since the offices as well swimming pool. The developer is also providing
as residential area will be on the same campus, it laminated wooden flooring in all the bedrooms and
adds to the company‘s offer of providing an vitrified tiles in living and dining area.
integrated work-cum-office living space. Residents
of SOHO would have the added advantage of MUMBAI
access to a helipad right on top of the office
buildings, and multiplexes along with retail shops In a recent transaction, a 1,900-sq-ft 3-BHK
located within the premises. apartment measuring around. located in Meher
Apartments at Altamount Road was sold for . 10.9
Among other facilities that it boasts of are provision crore which was inclusive of a covered car parking
of foreign exchange services, courier services, space. This was a resale transaction for the
travel age-nts, medical clinics and a three-level apartment located on the sixth floor of the building.
parking that would accommodate 5,000 cars. Altamount Road, one of the most expensive streets
of the world, is the most premium residential
The 500 sq ft one-bedroom studio apartments cost location of South Mumbai, boasting of famous
between Rs 50 lakh and Rs 65 lakh. The size of the properties like Antilla — Mukesh Ambani‘s famous
apartments is surprising considering that the 27-storied building. This area is also home to
company is targeting the top 10 per cent of several Bollywood stars, Consulates and top state
management and semi-management professionals
government officials. The current residential rates at management, a model for other realtors to emulate
Altamount Road range from . 50,000-75,000/sq ft, as there are very few realtors who are providing in
depending on the building, location, amenities house property management services to the
provided, floor, view from the apartment and age of homeowners. Commenting on the move, Ankur
the building. Gupta, joint managing director, Ashiana Housing
Ltd. said, ―Be it sales, resale or rentals, Ashiana has
PUNE never encouraged third party or brokers‘
involvement in any way whatsoever.
Recently, a 3-BHK apartment with an area of around
1,482 sq ft located at Kunal Crimson project was To save our customers from fraud and unjust price
sold for . 75 lakh, all inclusive. The possession of deals, we extended our Facility Management
the property is due in 18 months. Kunal Crimson services.‖ Since 1979, Ashiana has stood the test of
located at Aundh Annexe is easily accessible from time for its quality of construction, and its
Khadki Station, University Circle, Shivajinagar as maintenance as Facility Management is indeed a
well as Pimpri-Chinchwad. Presently, this project hallmark and USP of the company. Ashiana Housing
has an availability of 27 apartments of 2-1/2 and 3- is a group that have never seen themselves as a
BHK configurations with saleable area varying company that constructed houses and just moved
between 1,382 sq ft and 1,482 sq ft. The residential on as they believe in establishing strong affinity with
price in the area ranges from . 3,500- 4,500/sq ft. our customers.
The project offers amenities like a club house,
gymnasium, jogging track and a children‘s play With such a belief the company started Facility
area. Aundh Annexe is an established area of Pune Management services under VML, which is
and commands a premium on account of good constantly improving and streamlining.
connectivity to the rest of the city.
The Pioneer, 25 March, 2011
The Economic Times, 25 March, 2011, Delhi
Ashiana Housing launches resale,
Ashiana Housing Ltd., one of the finest developers
in India, strengthening its Facility Management arm,
has launched resale and rental services for
Ashianaites, recognising the need and to safeguard
its customers from unfair deals of third party
Ashiana started this service under its subsidiary
VML. Once the property has been bought, the
company will assist its homeowners in renting or re-
selling their properties. With its people centric
approach, this new service will help homeowners to
have smooth transaction be it resale or rentals, and
will also help in getting better and fair deals and
make their lives hassle free. The group has set itself
up as the yardstick for excellence in facility
Commercial property to see Building Code (ECBC) for commercial buildings will
be mandatory for eight states, including Delhi and
robust demand in 2011 first half: Maharashtra, from FY 12.
The Governments of Uttar Pradesh, Haryana, Tamil
The demand for commercial property in the country Nadu, Andhra Pradesh, Karnataka and West Bengal
is expected to remain robust in the first half of 2011, will also have to make ECBC mandatory for any
boosted by strong manufacturing activities, says a new construction of commercial buildings coming up
survey. in their states from April 2011 onwards, a senior
"... Despite the expectation that interest rate hikes
will continue in the first half of 2011, the growth "From the coming financial year (2011-12), these
profile of commercial property remains quite robust eight states will have to implement the ECBC norms
on account of a strong manufacturing sector," an in all the new commercial constructions," BEE
RICS India Commercial Property Survey released Director General, Ajay Mathur, told reporters on the
today said. sidelines of a seminar organised by the Bombay
Chamber of Commerce and Industry, here.
The Royal Institution of Chartered Surveyors (RICS)
acts as a self-regulatory body for qualifications and The need for energy will increase three-times over
standards and has more than 1,50,000 property the next 15-years in order to sustain development,
professionals as members. he said.
According to the report, the sentiment in the "Energy efficiency and renewables are key
investment market is seen to be stabilising after ingredients of a green energy future. Adoption of
strong price gains in previous quarters and energy efficiency practices will also help reduce
substantial increments are not expected. Demand costs for energy users, energy imports of countries,
for commercial property continues to remain strong and result in reduction in pollution," Mathur said.
at the macroeconomic level.
Deccan Herald, 24 March, 2011, Mumbai
However, the report noted that "growth in
investment activity seems to be losing momentum Van Heusen to target smaller cities
for the first time since the market recovered from the
crisis in 2007". There is a trend of oversupply rising Targeting profitability through market penetration in
across the three segments of office, industrial and the Rs 60,000 crore branded garments market,
retail property. The findings are based on a recent India's leading apparel maker Madura Fashion &
survey of more than 400 people, who are into Lifestyle will now aggressively market their premium
different areas of the commercial property sector. brand Van Heusen in smaller cities. "Every year, the
company will open at least 40 new exclusive stores
Deccan Herald, 23 March, 2011, New Delhi throughout the country, most of which would be in
the tier-2 and tier-3 cities," Ajay Ramachandran,
ECBC for commercial buildings Brand Head of Van Heusen, told PTI here.
mandatory for eight states from At present, 40 per cent of the brand's Rs 650 crore
FY 12 annual turnover comes from their 120 exclusive
stores, most of which are located in the metros and
The Bureau of Energy Efficiency (BEE) today said large cities. With the opening of new outlets, Madura
that implementation of the Energy Conservation Fashion, owned by the Aditya Birla Group, is hoping
that the turnover would jump to Rs 850 crore next Cinépolis India is a 100 per cent owned subsidiary
year. "At present, around 70 per cent of the brand's of the Mexican movie theatre chain, boasting over
turnover comes from the top 7-8 towns. Corporates 2,500 screens across the globe. The chain entered
like us have not given enough importance to India in 2007 with a humble four-screen multiplex in
penetrating deep into the market," the company Amritsar. With an investment of Rs 30-40 crore in
official said. Pointing out that there is little headroom the Thane property, Cinépolis is now aiming bigger.
for growth in the metros, he said that the sales figure
reported from smaller cities like Patna, Lucknow, PVR, one of the big names in movie viewing, has no
Jaipur and Trichur are "mind-boggling". "The per problem with such plans. ―It basically shows that
square foot sales is as good in the tier-2 cities as we there is an increased level of interest in the market.
have in the metros. Plus, the rentals are lower by at As it is the country is too large for one company to
least 50 per cent. So there is a clear retail penetrate,‖ points out Pramod Arora, Group
profitability which is emerging out of the smaller President, PVR. PVR holds 13 per cent market
towns," Ramachandran said. Places like Durgapur, share and plans to increase its presence, including
Jamshedpur, Guwahati, Patna and Ranchi are on in multiplexes and plexes for luxury movie watching.
their list this year. Having invested around Rs 35 However, Arora adds that PVR would prefer to have
crore so far in opening exclusive stores, they will just normal multiplexes with higher occupancy.
now invest Rs 4-5 crore each year to open the new
outlets under a franchise model. With aims to Cinemax, which currently has 15 per cent market
transform itself into a complete lifestyle brand, non- share, does not think the megaplex model will work
apparels will also be sold under the international in India. Sunil Punjabi, CEO, Cinemax, maintains,
Van Heusen brand, which was launched in India in ―Megaplexes are made for patrons that consume
1990. movies which are in the third or fourth week.
Alternate content is another stream which is fed on
A whole gamut of products including men's ties, megaplexes. India is a different market and almost
belts, footwear, eyewear, watches and luggage will 90 per cent of the revenues are based on regional
soon be available under the premium brand name. content. The life of Hindi content is not very long.
They will also enter the women's shoes and bags Hence, the demand for such movies would be low.
segment. "We expect a good demand for these But in case of markets where regional content is
products as we can offer a complete shopping strong especially southern India, larger screens are
experience to our customers. In the next three valid. We believe in such markets, a multiplex with
years, the non-apparel business should contribute seven-eight screens is ideal.‖
around 8-10 per cent to our total sales,"
Ramachandran said. Cinépolis plans to show regional movies along with
the popular Bollywood and Hollywood movies in the
Financial Chronicle, 24 March, 2011, Kolkata megaplex. To make the movie-watching experience
even better, Cinépolis will be launching Cinépolis
Showtime gets bigger VIP, a luxury movie viewing experience. The
expansive lobbies, recliners for watching movies,
Cinépolis is betting big on megaplexes. The Mexico- personalised service, live kitchen for gourmet foods,
based multiplex operator has tied up with Vivacity to a less-crowded theatre will come at a price as the
open a 14-screen megaplex — the country's largest ticket prices will be two-three times more than the
so far — in Mumbai‘s Thane. Vivacity, developed by regular cost. Then there will be Club Cine whereby
Sheth Developers, would be spread over 25,000 viewers will get to choose his own seating and
square feet carpet area and house big brands like cuisine.
Shopper‘s Stop and Hyper City as anchor tenants,
along with several mini-anchors and 150 shops. Business Standard, 24 March, 2011, Mumbai
Retail shopping clicks in Tier II Erode, Tirunelveli, Tuticorin, Nagercoil, Madurai,
Thanjavur, Kumbakonam, Pudukottai, apart from
towns Tiruchi and Coimbatore.
The common perception is that big departmental He said Spencer's Retail was ‗doing extremely well'
stores more easily gel with urban landscape than in the southern districts. The idea was to scale up to
with smaller towns with rural flavour. a shopping area of 40,000-50,000 sq ft. in each town
with either single location stores or smaller stores in
But the experience of a major retail chain, which has multiple locations.
a pan-India presence with about a million sq.ft in
retail shopping space, seems to show that people
By market standards, the business growth in the
living in smaller towns in States such as Tamil Nadu
secondary towns was very high and in some of
are no less savvy in shopping in big format stores
them, Spencer's was the only major brand.
compared with their counterparts in big urban
centres. The Spencer's Retail chain has found that
growth comes not only from metros and big towns, Mr Jagannathan said after weathering recession and
but also from smaller towns justifying its faith that in consolidating its operations, Spencer's Retail was
the retail business MNCs, big corporates and the on an expansion mode and is on a ‗property hunt' to
kirana stores or ‗ Namma Annachi stores' could all expand in places such as Salem and Madurai. The
co-exist! goal was to add close of 1 lakh sq.ft in retail space
in the next 18 months in Tamil Nadu.
According to Mr Jagannathan, General Manager,
Spencer's Retail Ltd, Chennai, the company in the Better value proposition
last one decade had developed about 30 hyper
stores and 180-200 smaller stores. After stabilising Mr Jagannathan said with aspiration levels growing
its operations, it is now focussed on expanding the even in smaller towns, the idea of modern stores
bigger format stores in 12-14 clusters in the country, has clicked even in these towns where people see
with the South being a focus area for business the value of such stores over typical grocery stores
development. as the former provided them with the ‗touch and feel'
experience with a wider range of products on
He said though Spencer's has been present in Tamil display. He felt that the neighbourhood stores, large
Nadu for nearly a decade, its activity was focussed format retail stores and the FDI-funded retail stores,
highly on Chennai. It has around 60-65 stores in if allowed, could co-exist. He did not expect any
Tamil Nadu with bigger stores only in Tiruchi and in negative impact from any MNC entry into retail
Coimbatore, where a new big store was opened on space and felt that the market would only expand by
March 24. their entry and benefit from the growth in modern
The rest of the stores, known as ‗daily format stores'
are 2500 sq-3000 sq.ft in size. The hyper format The Hindu Business Line, 27 March, 2011
stores are in 35,000-50000 sq.ft in area but in Tier II
towns, these hyper stores could be 15,000-20,000
sq.ft in size. Tanishq to open 15 outlets
Expanding presence Tanishq, the jewellery retail business of the Tata
group, is planning to invest around Rs 150-200 crore
He said Spencer's has now expanded its presence in setting up around 15 showrooms in various parts
to 12-14 towns in Tamil Nadu reaching out to Salem, of the country in the next fiscal year.
Speaking on the sidelines of the launch of its sixth
showroom in Chennai, at Chromepet, CK
Venkatraman, chief operating officer (jewellery
division), Titan Industries Ltd, said, ―We are looking
at opening 15 showrooms in the country before
March 2012. The total investment would be around
Rs 150-200 crore.‖
With today's launch, Tanishq retail chain now has
123 exclusive boutiques in 76 cities. The area of
proposed showrooms would range from 3,000 sft to
20,000 sft, including four to five large showrooms
spanning total area of more than 8,000 sft each. The
largest of the upcoming outlets would be a 20,000-
sft showroom in Mumbai, he added.
The new showroom in Chennai, with an area of
4,000 sft, would provide a range of traditional
Bengali jewellery, wedding jewellery in plain gold,
diamonds, polki and kundan. The new showroom
would also provide facilities including Karatmeter, a
device to measure the purity of gold, for its
Business Standard, 25 March, 2011, Chennai
No news in this section for the week
Land acquisition talks in April
District collector Vikas Deshmukh on Tuesday said
that talks for land acquisition for the second phase
of Bharat Forge-MIDC special economic zone (SEZ)
will be held with the farmers in the first week of April.
Land belonging to around 9,000 farmers from seven
villages in Pune district has been notified for the
second phase of the project. The multi-product SEZ
is a joint venture between the Khed Economic
Infrastructure Private Limited (KEIPL) and
Maharashtra Industrial Development Corporation
The MIDC will have 26 per cent equity in the project.
Deshmukh said, ―We will initiate the round of talks
with the farmers in first week of April. Talks will be
held over the rates of compensation and other
The SEZ is proposed to be developed on 4,500
hectare of land located in 17 villages in Khed and
Shirur talukas, around 40 km from Pune. In the first
phase, around 1,705 hectare of land have already
been acquired, while 1,600 hectare of land in around
5 villages has been notified for acquisition for the
second phase of the project.
The Times of India, 23 March, 2011, Pune
Four Seasons checks in When completed, the new building will be the third
tallest hotel in the city. The first and second slots will
After beating entry blues, the high-end hotel brand is be occupied by the 125-storey India Tower (coming
planning the third-tallest property in India, apart from up in Marine Lines in south Mumbai), and the Park
other expansion projects Hyatt, which is expected to house 117 storeys.
The Four Seasons Mumbai, with its grand edifice in The company is also expanding to other parts of the
Worli, opened its doors probably in the worst country such as Bangalore where it had a ground-
possible period. breaking ceremony last month. Hotel properties are
also scheduled to come up in Jaipur, Gurgaon and
Being a luxury brand, room rates at the Four Hyderabad.
Seasons are significantly higher than the average
rates charged by other players in the five-star Four Seasons has also signed agreements for
segment. For instance, an entry level standard room managing two resorts in India‘s most favourite
for a night will set you back by Rs 18,000 at the Four leisure destinations - Goa and Kerala. These will be
Seasons against the average five-star rate last year in addition to the four resorts which the company
of Rs 11,000, according to consultancy firm HVS. So manages in places like Mauritius and Seychelles.
competitors predicted that the high rates would be a The properties will be built under tie ups with local
big deterring factor for customers. developers who will also invest in them, while Four
Seasons will manage them and give its brand name.
They seemed to be correct as Four Seasons
recorded average monthly room occupancy of just Four Seasons is jointly promoted by its Canadian
around 40 per cent. Questions were also raised founder Isadore Sharp, Microsoft‘s Bill Gates and
whether the hotel chain had made the right choice of Saudi Arabia‘s Prince Al-Waleed bin Talal.
having a hotel in an area which is dotted with
chawls, defunct mills and narrow access roads. Business Standard, 21 March, 2011, New Delhi
Keeping in mind an extended surge in demand, Four Peppermint plans 10 budget
Seasons is putting up two new ballrooms in the hotels by yearend
property. But perhaps the biggest statement of a
rebound in its fortunes comes from the fact that the Peppermint Hotels, a new player in the affordable
owners (Delhi‘s Jatia family) are planning a huge hotels segment, is eyeing tier I and tier II cities for
expansion in the same area. expansion to launch 20 hotels by the end of 2012.
The budget hotel brand is a 100 percent subsidiary
The 33-storey hotel will soon be dwarfed by a tower of the Bangalore-based Royal Orchid Hotels.
that will be two and a half times taller – 84 storeys. It
might sport an Aer bar similar to the one present in ―We are expanding at a steady pace. At present we
the current structure, which is also India‘s first have hotels in Gurgaon, Jodhpur and Jaipur. We
rooftop bar. The financial details, including the plan to launch soon in Bangalore, Goa, Kumarakom,
investment for the new hotel, are being finalised. Ahmedabad, Baroda and Chennai. We are looking
While construction of the two new ballrooms will at launching 10 hotels by the end of this year. All
begin this month, the new skyscraper, which will deals are firmed up and work on all sites is
have office space, service apartments, guest rooms, progressing well,‖ said Arjun Baljee, founder and
restaurants and Four Seasons-branded residences, director of Peppermint Hotels India.
is in the design stage and will be finalised by the end
of this year. Financial Chronicle, 22 March, 2011, Kolkata
Jaypee Group to expand hotel biz Overseas hospitality chains
eyeing Pune, Ahmedabad
Hospitality division of the Rs 10,000-crore diversified
business conglomerate Jaypee Group has chalked For long, the growth of hospitality industry in India's
out plans to expand the number of hotels under its western region has revolved only around Mumbai—
ambit. Over the next three years, the company obvious reason being it is the financial capital of
would develop new hotels on its existing land India, and requires quality accommodation for the
parcels along with other real estate constructions. large business traveller community that visits the
"We plan to increase the hotel rooms by around city for work. But as businesses diversify to different
70% over the next three years," Manju Sharma, locations and geographies, the demand for hotel
director Jaypee Hotels told HT. Sharma added that, rooms is also expanding to other cities in the region.
at present the company owns and operates 900
hotel rooms in over seven hotels across North India. Ahmedabad and Pune are the latest buzz for most
Indian and overseas hospitality chains which are
looking to get a foothold in the corporate travel hotel
"The domestic tourism is on a rise and there is a accommodation space in India's western region.
severe shortage of hotel rooms, especially in the 4-
star category. Our plan is to initially develop hotel AHMEDABAD
properties in the land parcels already owned by the
company, such as those around the Yamuna Ahmedabad, the capital of Gujarat, is an industrial
Expressway connecting Greater Noida with Agra," base for sectors such as chemicals, textiles,
she said. pharmaceuticals and food processing industries
accounting for more than 21 per cent of the total
Sharma refused to divulge further details on the factories and employing around 18 per cent of the
exact locations of the hotel properties planned. "We total workers in the state of Gujarat, making it the
definitely aspire to have a pan-India presence but for largest contributors towards the Gross Domestic
now we wish to develop hotels on our own land." Product (GDP) of the state, says a report from
She ruled out any plans to acquire any hotel chain in Knight Frank India.
The infrastructure and industrial development in and
around Ahmedabad is encouraging and the city is
Jaypee Hotels owns and operates 5-star and 4-star said to become a major commercial hub in the
hotels across Delhi, Noida, Greater Noida, Agra and western region after Mumbai.
Mussoorie, among others. It recently developed a 5-
star hotel Jaypee Greens Golf and Spa Resort at It has more than 11 Special Economic Zones, 10
Greater Noida at an estimated investment of Rs 500 industrial parks and 12 industrial estates at various
crore. The group owns and operates its hotel stages of implementation. Additionally, the Delhi
properties and has no plans to tie up with any Mumbai Industrial Corridor (DMIC) which will pass
international hotel brand for the management of its through Ahmedabad is expected to attract huge
hotels. amount of investment over the next 10 years.
India currently has around 1,00,000 hotel rooms in PUNE
all categories, which is less than the hotel rooms
present in Dubai, Bangkok and Las Vegas. In the last few decades, the main economic drivers
of Pune's growth have been manufacturing and
education sector. However, over the last 10 years,
Hindustan Times, 23 March, 2011, New Delhi
information technology (IT) has gained momentum
with the city making it one of the fastest developing With these projects, Ista would take its total room
IT destinations in India. inventory to close to 1,500 from the current 750.
Besides, IHHR Hospitality owns a ‗destination' Spa
From attracting ancillary engineering industries in – Ananda – in Himalayas. ―This, in fact, is our first
the 1960s, today, Pune has witnessed the entry of property which came up in 2000, and we forayed
auto-majors such as Tata Motors, Bajaj Auto and into the hotels business much later in 2006. We
Bharat Forge Ltd. Manufacturing majors such as have been adding almost a property a year since
Kinetic Engineering, Force Motors, Daimler then,‖ said Mr Khanna.
Chrysler, and Cummins Engines have a set up in
the city, says the Knight Frank report. These hotels, according to him, are currently
witnessing, on an average, 70 per cent occupancy
At present, the automotive and the IT sectors are ―with 35 per cent repeat ratio.‖ Ista is in a marketing
the driving force behind Pune's rapidly growing pact with Preferred Hotel group primarily for
hospitality sector. The hospitality sector of Pune distribution as well as to give it corporate access in
thrives primarily upon the business and corporate key source markets such as the US and Europe.
travellers. Developments in the corporate and the IT Elaborating on the brand's marketing strategy, Mr
sector have propelled many new brands to venture Khanna said, the hotels offer ‗dynamic pricing' which
in the hospitality sector in the past decade and works more like best price of the day, based on
especially in the last 3 to 5 years. In Pune, there are several parameters.
around 20 hotels in the upscale, midscale and
economy category hotels that sum up to a total room Overall, the company has invested Rs 750 crore so
inventory of 2,277. far. At 1:1 debt-equity ratio, it is now making an
operating profit (before allowing for interest, taxes,
A total of 15 new hotels consisting of 3,502 rooms depreciation and amortisation), he said. In 2007,
will become operational in Pune by 2013 across the Morgan Stanley took 15 per cent equity exposure in
upscale, midscale and economy segment of hotels. the company.
The Hindu Business Line, 24 March, 2011, Mumbai The Hindu Business Line, 26 March, 2011, Chennai
Ista Hotels plans Rs 700-crore
investment in next 4-5 years
Ista Hotels plans to expand its footprint with four
more properties — in Jaipur, Coimbatore, Navi
Mumbai and Nagpur — in the next four to five years,
entailing an investment of around Rs 700 crore. Ista
Hotels, from IHHR Hospitality Pvt Ltd (promoted by
a clutch of individual investors, including a few
NRIs), currently has four ‗five-star luxury' properties
— in Bangalore, Hyderabad, Amritsar and Pune.
The brand's fifth hotel is set to be flagged off in the
next few months in Ahmedabad. This will be on a
management contract basis. ―In the second phase,
the company will take up Navi Mumbai and Nagpur
projects,‖ said Mr Ashok Khanna, Managing
Director, IHHR Hospitality.
No news in this section for the week
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