India Real Estate Thread

[Gudavalli]

Sebi allows alternative investment funds in real estate, private equity

Market regulator Sebi has allowed seven Alternative Investment Funds (AIF) to set shop in the country under a newly formulated route, which allows pooling of funds for investments in areas like real estate, private equity and hedge funds.

The approval has been given to all the seven AIFs by the Securities and Exchange Board of India (SEBI) in a period of less than one month, as per the information available with the market regulator.

Sebi had notified its guidelines in May for AIFs, which are funds established or incorporated in India for the purpose of pooling in of capital from Indian and foreign investors for investing as per a pre-decided policy.

The approval has been given to all the seven AIFs by SEBI in a period of less than one month. Ibnlive
As per Sebi data, six AIFs have got registered with the regulator during August 2012, while one was granted registration on July 23. In a board meeting held yesterday, Sebi had decided that the promoters of listed companies can offload 10 percent of equity to AIFs such as such as SME Funds, Infrastructure Funds, PE funds and Venture Capital Funds registered with the market regulator to attain minimum 25 per cent public holding.

Under Sebi guidelines, AIFs can operate broadly in three categories and it is mandatory for them to get registered with the regulator. The Sebi rules apply to all AIFs, including those operating as private equity funds, real estate funds and hedge funds, among others.

The seven AIFs that have got registered with Sebi include IFCI Syncamore India Infrastructure Fund, Utthishta Yekum Fund, Indiaquotient Investment Trust, Forefront Alternate Investment Trust, Excedo Realty Fund, Sabre Partners Trust and KKR India Alternate Credit Opportunities Fund.

The Category I AIFs are those funds that might get certain incentives or concessions from the government, Sebi or other regulators in India and include Social Venture Funds, Infrastructure Funds, Venture Capital Funds and SME Funds.

The Category III AIFs are those trading with a view to make short term returns and include hedge funds, among others. The Category II AIFs are those funds which can invest anywhere in any combination but are prohibited from raising debt, except for meeting their day-to-day operational requirements.

These AIFs include PE funds, debt funds or fund of funds, as also all others falling outside the ambit of Category I and Category III.

[Gudavalli]

Real estate lobby to help fund education in the sector

Mumbai, Aug 16 (IANS) Aiming to promote excellence and bring in global standards in the real estate arena, the sector's apex body Confederation of Real Estate Developers' Associations of India (CREDAI) has announced two major projects -- an institute for research and professional studies and educational scholarships for needy students pursuing higher education.
The CREDAI Institute of Real Estate Research and Professional Studies will be set up at Ahmedabad, Gujarat, an official said.
"Jaxay Shah, the vice president of CREDAI and director of Savvy Infrastructures Ltd has donated land for the institute," said CREDAI National President Lalit Kumar Jain, announcing the projects.
Jain, who heads Kumar Urban development Limited (KUL) has also committed Rs.1 crore for construction and infrastructure of the institute's building. Several other leading developers have also expressed their support.
"The CREDAI institute, aiming at imparting world class education and research in real estate related subjects, will be functional from June 2014. It will have tie-ups and affiliations with top international institutes having expertise in real estate," Jain said.
CREDAI also announced the launch of an Educational Scholarship Scheme (ESS) for promoting higher education by offering scholarships to deserving students who want to pursue full-time degree/post-graduate degree courses in civil engineering or management degrees related to the real estate sector at any of the colleges or institutes recognised by the All India Council of Technical Education (AICTE).
The ESS will primarily target economically under-privileged but academically bright students and help them complete their professional education so that they can embark on a bright career path.
CREDAI is the apex body for private real estate developers in India, representing over 8,800 developers through 20 states and 104 city chapters across the country.

[bojemrythem]

Now a days real estate property price is down but its not out of the market. You can purchase any property from any where of your related price. I think you have to search many property for making best property for related budget.

[Gudavalli]

Green buildings make real estate business sense

India is witnessing a tremendous growth in infrastructural development. The construction industry reflects one of the largest economic activities of the country. As the sector is growing rapidly, preserving the environment poses many challenges and at the same time presents wonderful opportunities for various stakeholders.

The demand for energy, water and materials for construction has been growing enormously over the years and the need has arisen to address the minimization of natural resources for the building construction and their associated impact on environment. Building sector accounts for 30-40 percent of global Green House Gas emissions.

The construction sector therefore needs to play a responsible role towards preservation of the fragile environment. In this regard, green buildings can play a catalytic role in addressing environmental issues and concerns.

The major benefits of green buildings include energy savings to the tune of 40-50 percent and water savings of about 20-30 percent, intangible benefits which includes: enhanced ventilation, better views and day lighting that significantly improve the productivity of the occupants, green corporate image and it also demonstrates the company's commitment to environmental protection

Green Buildings movement in India, with the support of all stakeholders is being spearheaded forward by the Indian Green Building Council (IGBC) of the Confederation of Indian Industry (CII). The council is represented by stakeholders across the board of the Indian construction industry comprising of the government, corporate, nodal agencies, architects, designers, institutions, builders & developers, product manufacturers, suppliers, facility managers among other sector players.

IGBC, with support from all stakeholders works with the government of Maharashtra in developing 'environment guidelines' for Area Development Projects in the state. With a modest beginning of 20,000 sq ft in the year 2003, green built-up area in the country, today (as on July 2012), 1,707 green buildings projects with a built- up area of over 1.20 billion sq. ft are registered with the IGBC, out of which 267 green building projects are certified and fully functional in India. These include offices, factories, hospitals, hotels, it parks, airports, banks, residential spaces, SEZ's, townships among others.

Mumbai itself has about 250 buildings registered with IGBC, which are at various stages of construction. Mumbai ranks second in the country with 36 rated operational green buildings.

[Gudavalli]

Amid rising costs, realty firms spend less

Real estate firms claim rising input costs have hit them hard. However, this doesn’t reflect in their expenditure. In the results for the quarter ended June, realty companies recorded a significant drop in employee expenses, cost of construction and materials consumed, etc. Much of this can be attributed to the slowdown in construction.

In the past one year, inflation in input costs has been 10-15 per cent, realty firms say. However, their overall costs fell, owing to fiscal consolidation by firms, limited new launches, downsizing staff, the slowdown in construction and a delay in deliveries.

India’s largest real estate company, DLF, saw its total expenditure fall 34 per cent to Rs 1,309 crore in the quarter ended June from Rs 1,982 crore in the year-ago period. The sequential fall in total expenditure stood at 13 per cent. The cost of land, plots and constructed properties dropped 50 per cent— from Rs 1,268 crore in the year-ago period to Rs 644 crore in the quarter ended June.

Housing Development and Infrastructure (HDIL)’s costs declined from Rs 233 crore in the year-ago period to (-) Rs 68.32 crore.

Unitech’s costs fell came 28 in the quarter to Rs 362.9 crore, compared with Rs 504 crore in the corresponding period last year. “A lot of emphasis is also being laid on improving various processes to drive efficiencies and reduce costs,” stated Ajay Chandra, managing director, Unitech.

Not just a fall in expenses, delays in deliveries and a slowdown in revenue also resulted in reduced costs for these firms, said Anubhav Gupta, analyst, Kim Eng Securities. DLF did not launch any new project during the quarter. The company’s net sales fell 10 per cent to Rs 2,197 crore, compared with Rs 2,447 crore in the corresponding quarter last year. It recorded sales of 1.34 million sq ft in the quarter, compared with 2.3 million sq ft in the year-ago period. “A total of 20-30 per cent of the revenue for DLF comes from non-core asset sales, and the rest from property development. As property development business is declining, we saw revenues fall and eventually, that was reflected in the reduction in cost,” said an analyst.

Gupta said in the quarter ended June, deliveries fell 25 per cent year-on-year, as pre-sales declined 50 per cent on an annual basis, and 80 per cent quarter-on-quarter.

Unitech’s net sales stood at Rs 407.74 crore, the lowest in the recent past, against Rs 615.46 crore in the year-ago period and Rs 716.29 crore in the quarter ended March.

In a sharp decline in construction, of the 32 projects launched by Unitech before March 2009, 10 are yet to be completed or handed over, while 22 are in the last, or handing-over, phase. And, of the 66 projects launched after March 2009, only eight per cent are nearing completion, while eight are yet to start.

HDIL recorded a revenue drop of 60 per cent year-on-year in the June quarter---from Rs 514 crore to Rs 211 crore.

DLF’s employee benefit costs fell to Rs 140 crore in the quarter ended June from Rs 148 crore in the year-ago period. For HDIL, employee benefit expenses dropped 17.5 per cent---from Rs 10.7 crore in the corresponding quarter last year to Rs 8.8 crore.

“Since companies don’t have many projects, they are downsizing team sizes,” said an analyst, while another added companies might not fill vacancies, owing to the slowdown in the realty sector.

[Gudavalli]

Govt asks bankers to form committee to advise it on housing

New Delhi: Finance Minister P Chidambaram on Saturday said he has asked Indian Bankers Association (IBA) to form a committee to advise the government on tackling the slowdown in the housing demand.

He listed various issues facing the real estate sector but expressed confidence that these can be solved.

"I have requested IBA to appoint a small group to tell me how to resolve the problems of demand for housing one side, incomplete housing projects on other side and completed housing segment which are lying vacant on the third side. Its a conundrum, but I think it can be solved," Chidambaram told reporters after a meeting with chiefs of state-owned banks.

He said the housing segment posed "complex issues", and cited an example: "I was told 5 lakh housing units remained vacant in Mumbai, I don't know its right or wrong, it may be wrong by factor of 10 percent or so. But you know that is capital which is blocked, cement, steel, labour..."

Interest costs have increased significantly in the past couple of years, as the Reserve Bank has cut policy rates just once (in April 2012) after as many as 13 hikes since March 2010 to contain inflation. High interest rate regime has hit the industry hard and slowed down the demand.

Realty giant DLF's Chairman K P Singh had recently said that RBI's monetary policy should not stunt the growth of the real estate sector and uninterrupted access to affordable finance is vital for this business.

At present, there is shortage of about 25 million housing units in the country.

According to Confederation of Real Estate Developers' Association of India, an apex body of the organised real estate developers, funding gap in housing will be around USD 70 billion in the next five years.

[Gudavalli]

Mend land policy to push realty, infrastructure (Comment)

The relaxation of rules by the Prime Minister's Office (PMO) on transfer of government land in a bid to speed up public-private partnership (PPP) projects in infrastructure sector is, indeed, significant. Especially so when economic growth has dipped to a 9-year low, amid infrastructure and realty projects hanging fire due to delayed approvals.
Last year, the government had put a condition to make cabinet nod a must for transfer of government land to any entity. The recent waiver of such cabinet approval will cut delays, putting infra projects on fast track.
Land availability has been a major hurdle in infrastructure development. But for this bottleneck, India's economic growth can jump two percentage points. It is hoped the recent policy move will help free up hundreds of thousands of hectares of government land, putting it to productive use.
Indian Railways alone has over 400,000 hectares of land, with about a tenth of that lying vacant. With the recent progressive policy initiative, the Rail Land Development Authority (RLDA), besides numerous state-run enterprises, will be able to develop their vast tracts of land lying idle.
Along with putting unused government land to use, there is also the need to end excessive and wasteful acquisition land by government bodies. Most of them have acquired land much in excess of their requirement, a lot of which is lying vacant. There is an urgent need to check this unregulated and excessive acquisition through a well-defined atlas of land use for different categories.
Infrastructure development and connectivity also provides a major boost to real estate development, leading to appreciation in property prices. But the absence of a land policy is creating artificial scarcity of land, resulting in undue hike in the prices of land which is a major cost component in housing.
All this is leading to severe shortfall in housing supply. What is worse is that state-level urban development bodies -- instead of performing their defined role to provide affordable housing to masses -- are choking the supply by their monopolistic control over land.
Combined with rigid zoning norms in master plans, they are causing the holding-up of land. Not just that, they are also pocketing profits by auctioning the land at abnormally high rates, making houses unaffordable for the masses.
In this backdrop, there is a need for a proper land policy to push supply. This has to be in line with the housing policy, as land is the most expensive component of housing and short supply is not only pushing up costs but also severely hitting mass housing programmes.
Restrictive land use policies are impediment to urban growth. Therefore, the need is for a well-defined and a well-regulated land policy aimed at optimum use of land. It is also important that floor space index -- which, in simple terms, determines what proportion of land can be used as built-up area and how much should be left vacant -- is also increased.
With reforms in the various enactments on rent control and proper policy on renting of housing, one can not only plan how much land is required in the future, but also push private investment into mass housing.
Much of the current mess has a lot to do with opaque land acquisition rules. Some of that got exposed during recent agitation by farmers in Noida and Greater Noida as the land acquired from them was sold by the by authorities at hefty prices to developers.
Even the new land acquisition policy changes proposed by the central government pose a hurdle to easy availability at reasonable rates for mass housing. One hopes the new National Land Acquisition and Rehabilitation and Resettlement Bill comes up for passage in the monsoon session of parliament.
But more importantly, one also wishes it is able to strike a fine balance between the interests of farmers and developers. This is key to efficient use of land for real estate and infrastructure development.

[karkal]

13 Insights for India Real Estate in 2013

http://www.asiapacific.joneslanglasa...2013_India.pdf

[estateace]

Ever wondered why you want to buy a property, well everyone has a reason. Check this Link for inspiring reasons to buy a property

http://www.estateace.com/resources/b...perty-in-India

Source: estateace.com

[Gudavalli]

Get innovative on the housing sector

The slowdown in the Indian economy since 2008 is a cause of concern for policymakers. The growth rate continues to be stubborn at the lower end and the current global environment is not very helpful for increasing exports.

The Indian economy has to look inward for avenues to grow. One productive way to spur demand would be to address the issue of shortage of houses in the country.

As is well known, the housing sector has interlinkages with nearly 269 other industries and sectors in the economy such as cement, steel, paints, building hardware, etc. Therefore, developing the housing sector can have a direct impact on employment generation, GDP growth and consumption patterns.

The shortage of housing is concentrated in the lower segment of the market, and mainly in urban areas. According to official estimates, there was a shortage of nearly 22 million units for the economically-weaker sections (EWS) and three million units for the low-income group (LIG) as of 2007 in urban areas.

To effectively address this shortage, it would also be important to consider the physical location of houses for weaker sections. If these houses are far from city centres, there is every possibility these will not be occupied, and weaker sections may continue to inhabit slums or even roadside pavements. On the other hand, if these houses, generally located in far-flung areas, get occupied, they could cause additional pressure on the existing transport system. In such a situation, housing amenities with modern technology, high-rise buildings and efficient land utilisation may be appropriate for consideration.

Meeting such a large demand of housing needs substantial amount of cement, iron and steel, sanitary ware, plumbing material, wood and other materials, including raw materials and energy in terms of electricity. The country does have some installed capacity but it would be too short to meet the demand for such a huge expansion of housing stock. Here, it would help to think out of the box.

India can take advantage of the grim economic situation in some countries in Europe and the US, and import necessary material for undertaking such expansionary housing projects. In view of the prevalent economic situation in these countries, there is unutilised capacity in their industry and idle shipping capacity across the world.

If India is able to have an agreement with the US or other countries, it can manage to import, at lower prices, a substantial amount of raw materials through easily-available shipping. In addition to raw materials, India could also consider importing wooden fittings, given that India has poor forest cover.

India can also import technology and know-how to build 1,000 apartments in one building with centralised facilities, including airconditioning. This scheme can help spur growth in our economy as well as enable the US and other countries in the west to spur industrial production. Pursuing a housing treaty with the US and other western countries probably could also be productive.

In India, urbanisation has been progressing rapidly from around 11% in 1901 to 31% in 2011, and is expected to reach 41% by 2030. House prices are rising rapidly in almost all metropolitan cities. Also, one reason for rising house prices is the huge increase in land prices mainly because of its scarcity in urban areas.

In this context, one wonders why expansive cantonment areas are permitted to stay within the city limits of Mumbai, Delhi, Bangalore, Hyderabad and other megacities. Cantonments have their own dedicated administrative services, and are designed to be self-sufficient and self-dependent. The government incurs a huge amount of expenditure to ensure this self-sufficiency for defence.

Similar is the story of old and unutilised airports occupying large urban spaces. And then, right in the heart of our national Capital, there is the Lutyen's bungalow zone (LBZ) set up in 1920s, covering about 7,000 acre of prime land. These old, thick-walled bungalows must be expensive to physically maintain for the national exchequer. In contrast, modern, spacious multi-storey apartments that are more energy efficient can be built for our political elite and senior government officials, setting an example of optimal utilisation of scarce urban land. To tap the hidden potential in housing sector and encourage development in a planned manner, the government could consider some measures that instil confidence in the market. That means an active regulatory and supervisory body for the housing sector.

[Krishnamoorthy K]

Budget 2013: Housing loan rebate will boost home ownership and steel demand

28 Feb, 2013, 01.53PM IST, Rakhi Majumdar,ET Bureau

KOLKATA: The Finance Minister's budget proposal to offer an additional interest deduction of Rs 1 lakh on housing loans of upto Rs 25 lakh taken by first time home buyers from housing finance companies and banks will increase demand for steel and cement and help boost new home ownership. The move is clearly aimed at raising the demand for core sector commodities like steel and cement which has been facing sluggish growth in the recent months.

"The budget move will definitely see a perk up in housing construction activity. This will indirectly boost steel demand since a lot of it is used in construction. This will benefit domestic steel companies which are struggling with recent low demand," Sanjeev Jain, Partner (Metals & Mining) at Ernst & Young.

Construction sector is one of the biggest consumers of steel in the country. In particular the budget proposal will create demand for long steel products like TMT bars and rods, angles and channels that find use in construction activity. This will benefit that only large steel companies like Steel Authority of IndiaBSE 0.42 % Limited ( SAILBSE 0.42 %), Tata SteelBSE 0.80 %, RINL but also come as a shot in the arm for a host of mid-sized steelmakers and TMT manufacturers like SRMB, Shyam Steel.

[DeadManWalking]

Disney India joins hands with Supertech

Disney India, on Thursday, tied up with realty firm Supertech for a Disney-themed housing project in Greater Noida at an investment of about Rs.500 crore.
The partnership comes close on the heel of its tie-up with Italian fashion brand Armani group for interior designing of 100 super-luxury flats in one of the mixed-use projects at Noida.
“This is our third project in India. We have already tied up in Mumbai and Kolkata, Disney UTV Managing Director (consumer products, retail and publishing) Roshini Bakshi told reporters here.
Disney India has tied up with Sunteck Realty in Mumbai, while in Kolkata, it has partnered Team Taurus.

[DeadManWalking]

Rating system launched for Green buildings

MUMBAI: Indian Green Building Council (IGBC), part of Confederation of Indian Industry (CII) has launched the first-of-its-kind Rating System to address sustainability aspects in existing buildings. The rating programme was launched during the Conference on Green Cities & Townships held in Mumbai on Thursday. This rating tool facilitates building owners & facility managers in implementation of green building strategies, measure their impacts and sustain the performance in the long run.

Green Existing buildings can have tremendous benefits such as operational savings in energy and water consumption to a tune of 15-30%, enhanced air quality and health & higher satisfaction levels of occupants.

The rating has begun to receive good response from the stakeholders right on the first day. Projects amounting to 3.6 million sqft have already expressed their interest to participate in the pilot rating programme.

A booklet on 'Townships of India Going Green' and World Green Building Council's report on 'The Business Case for Green Building' was also released.

India has added a population of about 20 crore within a decade i.e., 2 crore per annum. The population in 2001 was 101 crore which increased to 121 crore by 2011. The urban population has increased significantly. There were 5,000 cities in 2001 and the number grew to 7,300 cities by 2011. India needs integrated, self-sustainable large townships. As on date, more than 30 pilot townships across India are going green with Green Township Rating programme.