REAL ESTATE MADE EASY

After being the subject of incessant rally for the past few years, the commercial rentals in nearly all the major cities of India have touched the rooftop, says the recent report from international real estate advisory firm DTZ.
The absorption levels of commercial properties in India are steeping down due in most commercial hubs of these cities such as Delhi, Mumbai, Bangalore, and Hyderabad.
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Resultantly, the supply of new office space is far exceeding the levels of demand and since the interest from the side of buyers and tenants is reportedly falling, the vacancy levels at the new commercial property projects are quite high.
The vacancy levels in Central Business District (CBD) of Bangalore at MG Road is recorded at 5-7 levels, however the commercial area of Whitefield in the city has been witnessing shivering 35 per cent vacancy rates. The reason is obvious-No takers for the new office space.
Similar is the scenario with Delhi. Only 0.54 million of newly-constructed space was taken up in the second quarter of this year, against the total supplies of 0.81 million sq. ft of area.
However, there is an astounding difference between the average rental values of CBDs in Delhi and Bangalore. The same at Delhi is hovering at Rs 300 sq. ft whereas in Bangalore the same is at Rs 90 sq. ft.
Commercial properties in Pune are also projected to suffer a huge gap in supply and absorption levels by the end of 2007. By the end of the year, Pune real estate will add some 9.7 million sq. ft of space however the demand is estimated to be in the range of 5-6 million sq. ft.
Real estate Chennai also just managed the absorption levels of 0.47 million sq. ft against the huge supply of 3.4 million sq. ft.
In view of such scenario, the markets are most likely to head for correction in the near future.
Source: Indianrealtynews.com
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Sensex surges past 16,000Published by Newsroom September 21st, 2007 in Newsbytes. 0 Comments
Mumbai: The benchmark Bombay Sensitive Index breached the psychological milestone of 16,000 on Wednesday, as the global impact of the US Fed rate cut took the Indian markets too, in its sweep.
The bull charge was not just led, but played out solely by the FIIs as domestic institutional investors and retail players were both net sellers for the day. ‘Not expected’
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The magnitude of the US Federal Reserve’s reduction of its benchmark lending rate was not expected, said market participants. Though once that was known, many did expect the markets to touch new highs.
“A 50 basis point cut in the US Fed rate was not expected, and that is why all the markets have rallied so hard today,” said Mr Andrew Holland, Executive Vice-President and Head - Strategic risk group, DSP Merrill Lynch. “It looked like hedge funds who were heavily short on the market were cutting their positions, and there was a strong presence of larger FIIs who were buying,” said Mr Raamdeo Agrawal, who heads Motilal Oswal Financial Services.
“The buying decisions today were more or less based on the news of the Fed rate cut, rather than on price-to-earnings ratio,” said Mr Kalpesh Parekh from the Dealing Desk at Emkay Securities.
Another leading broker said the rise was largely due to the psychological impact of the Fed rate cut and called it a “relief rally.”
More funds
The Fed rate cut would mean higher liquidity that would, in turn, bring in more real estate funds into emerging realestate markets such as India.
It has also further assuaged fears about the US subprime loan crisis and given rise to a hope that India may follow with interest rate cuts or at least maintain rates.
“The market is also perhaps hoping that the Reserve Bank of India Governor will take the cue from the US Fed and also cut rates. But we don’t know whether this will happen,” said Mr Agrawal of Motilal Oswal.
Upward grind
“If you notice, the interest-sensitive, sectors such as real estate, banking and auto moved up big time as though an interest rate cut were imminent in India,” he added.
“Interest rate cuts also present arbitrage opportunities for international investor, and there will be more money coming in,” he said.
The Sensex which has been on a gradual grind upwards ever since the US sub–prime crisis appeared to wane, also made its highest single-day gain in absolute terms, rising by 653.63 points, to close at 16,322.75 on Wednesday.
Single-day gain
Its earlier highest single-day gain had been on June 15 last year, when it rose by 615.62 points. And its earlier high had been on July 24 this year, at 15,794.92 points.
The broader S&P CNX Nifty rose by 4.1 per cent, to close at 4,732.35 gaining 186.15 points.
Among the indices, the BSE Realty index rose by 5.77 per cent, the BSE Bankex by 4.84 per cent, the Oil & Gas index by five per cent and BSE Teck by 3.42 per cent.
All the Sensex stocks gained. The highest gainers were HDFC (7.94 per cent), HDFC Bank (7.83 per cent), Bharti Airtel (6.46 per cent). ONGC rose by 5.95 per cent. Reliance the largest heavyweight, gained 4.96 per cent and ICICI Bank 4.9 per cent. State Bank of India gained by 4.52 per cent and Infosys by 2.96 per cent.
Nifty futures gained 4.3 per cent, at 4745.95 for Septmeber. PE levels Opinion was rather divided on whether the rally was sustainable at current PE levels (22.04 for the Sensex stocks on Wednesday against 21.16 on Tuesday).
I think it is definitely sustainable, said Mr Agrawal. Corporate performance in the first quarter was good in the next quarter likely to be on the same lines.“It will probably go higher,” said Mr Holland.“The buying rate decision was more or less based on news of the Fed rate cut rather than PE ratios,” said Mr Parekh of Emkay Securities.
Source:www.thehindubusinessline.com
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US realty fund Walton Street keen on retail sector herePublished by Newsroom September 21st, 2007 in City Scape and Newsbytes. 0 Comments
US-based property fund Walton Street Capital said it was keen on the Indian hospitality and retail sectors as potential investment targets, apart from real estate.
Talking to ET, company MD Sourav Goswami said on Tuesday: “We have committed an investment of approximately $3.5 billion of equity in around 150 separate transitions in the US and other international real estate markets.” Earlier, Walton Street Capital announced that the fund, along with another US fund, Starwood Capital, and south India-based developer Shriram Properties, have decided to develop a Rs 5,000-crore integrated township on Hindustan Motors’ excess land at Uttarpara near Kolkata.
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The deal was reported by ET in its September 18 edition. Although Walton Street Capital currently doesn’t have any India-focused fund, its global fund VI recently raised $2.5 billion from the international market, of which a part would be invested in India. “Like real estate, the Indian hospitality and retail sectors are offering strong returns.
We are evaluating various investment options in these sectors,” Mr Goswami added. In the international hospitality sector, Walton Street Capital and Merrill Lynch had together acquired the 293-room Prague-based Marriott Hotel and BH Centrum office and retail complex in 2005. In 2006, it bought Florida-based Walton PGA National Resort and Spa at Palm Beach Gardens from ELlwyd Ecclestone.
The firm has purchased equity in two London-based hotels as well. Walton Street’s Kolkata project represents one of the largest-scale partnering of global real estate private equity firms in India, Mr Goswami said. The consortium between the private fund and developer plans to develop approximately 20 million square feet of residential retail, office and civic infrastructure.
The master plan for the project will be created by the internationally-renowned architectural, HOK, said Mr Goswami.
Source: The Economic Times
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Lifestyle redefinedPublished by Newsroom September 21st, 2007 in City Scape and Newsbytes. 0 Comments
The recent economic boom has X Mumbai’s real estate market sizzling. International managers, real estate funds, developers and real estate professionals are rushing to get a chunk of the action and the winner is the consumer, as it should be. Standards for planning, technology and use of building materials are being redefined.
In fact, lifestyle itself is being redefined. Visionary developers are redefining the concept of a “Good Location”. With innovative design and sensitive development, the slum project of Tardeo coupled with high-rise towers, urban renewal of the Lower Parel mill area along Tulsi Pipe Road and redevelopment of Dharavi, one of the most notorious slum pockets of the world, are being converted into prime locations. Almost every part of Mumbai has the opportunity to become a destination location if dealt with sensibly.
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Land prices are spiralling making construction costs of even Rs.5,000 per sq. ft. only a fraction of the total cost. Developers have realised it is viable and prudent to use the best designers with international repute and have creative design solutions, excellent quality building materials and a mind-boggling array of amenities.
New-age entrepreneurs, professionals are competing with the landed gentry and want exclusive brand name furniture, fixtures and gadgets. High-rise buildings provide new opportunities to get spell-binding 360-degree views.
The size of homes is rapidly increasing. The 3,000 to 4,000 sq. ft. homes owned by the fortunate few until recently have made way for new 8,000 to 10,000 homes. While there are several takers of homes ranging from 5,000 to 10,000 sq. ft., there are a handful of people who are building palatial bungalows and apartment sizes ranging from 25,000 sq. ft. to 150,000 sq. ft.
Complexes with gymkhanas, tennis courts, swimming pools are passe. Now it is all-weather swim pools, movie theatres, cars transported by lifts to higher floors, social lounges, state-of-the-art security, ample parking and plenty of green open spaces that define the new lifestyle.
Centrally weather controlled homes are also opulently appointed with sub-zero refrigerators, island kitchens with branded cabinets, spacious bathrooms with European fixtures, steam and sauna baths and walk-in closets. Mammoth-size living rooms, dining area, bedrooms and libraries are adorned with customised wood floors or imported exclusive marble or granite floor, imported windows and doors.
Achieving luxury is not a simple focus on each individual feature. There is an intangible feeling one gets when all the tangible elements are put together. It is a synergy between the home and human being, which shows they are made for one another; that their needs are met in totality.
Source: The Times of India
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LEELA hotels plans Rs 2200-cr investment: Launching new projectsPublished by Newsroom September 20th, 2007 in Newsbytes. 0 Comments
The Leela Group of Hotels will invest a whopping Rs 2,200 crore in the next three years to develop six hotel projects in different Indian cities.
The company will come up with five new hotels and service apartments by 2010. It will bring the hotel in cities including Hyderabad, Chennai, Udaipur, Pune, and Delhi whereas service apartments will be developed in Gurgaon.
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“We have already invested Rs 1,100 crore,” says Leela Group chairman Capt C P Krishnan Nair.
The Hyderabad hotel will have 275 rooms and may complete by 2010. On the other hand, the hotel to come up in Chennai will have 365 rooms and is scheduled to be completed by 2009.
And, the Pune hotel will have 220 rooms and be operational by 2009 while Udaipur hotel will be operational by 2008.
The company plans 86 service apartments in Gurgaon. More rooms will be added in present Leela hotels in Goa and Kovalam. Around 30 rooms will be added to the existing 182 rooms in its Goa hotel.
Likewise, there will be an addition of 70 rooms to the present 192 rooms in Kovalam hotels.
Leela Group envisions accomplishing a turnover of Rs 450 crore in 2007 as against Rs 350 crore last year, says Sanjoy Pasricha, Leela’s vice president, Sales & Marketing.
Source: Indianrealtynews.com

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