20 Nov 2009, Vivek Shukla,
Even as residential market picks up and end users flock back to
book their dream homes in various housing projects, action is slowly gathering
pace in commercial realty market too - after a long time, there
is a positive movement here.
While it will take at least two years for DLF Corporate Green
building in Sector 74 in Gurgaon, near Haldiram, to become
fully operational , the construction is giving a huge boost to
commercial realty scene.
There is a definite buzz in market for this latest offering from
the stable of a market leader. This is all the more surprising
considering that rentals in good buildings have also seen big
slump in Delhi, as well as in NCR towns.
As if this were not enough, there is a glut in available space
in most of the buildings in these areas. A lot of office space
is up for grabs as many big-ticket companies have shifted
from bigger to small offices in the past few months after they
were hit hard by economic slow down.
A large number of companies resorted to such measures
in order to reduce their overheads. The number of companies
which were occupying 10,000 sq feet or more space and then
shifting to smaller spaces is not small.
In the world of realty, any office that is spread in an
area of 10,000 sq feet is considered big. Despite all this,
DLF Corporate Green has, in a way, became a test case
to prove that commercial market is also getting back into its own, slowly.
Sanjay Rai, spokesman of DLF, says while he cannot say
with certainty that their new offering would revive activity
in commercial property segment, there are three very
important factors in realty sector that play a key role in
determining demand of any residential as well as commercial
buildng: one, right pricing ; two: right location, and three: track
record of the realty firm in terms of completing their project.
If any property has all these three, it is bound to attract the
attention of customers, Rai feels.
"I couldn't agree more with these three points," says Devender Gupta,
CMD, realty advisory Century 21 India, adding, "I feel the pricing
in the case of DLF Commercial Greens is very significant.
They have fixed Rs 5,200/sq feet in their new building when
the current rates in commercial buildings in same area are
hovering between Rs 6,500/sq feet and Rs 7,500/sq feet.
You would not get commercial space at Rs 5,200/sq feet
in any commercial buildings like Unitech Business Zone,
Times Square, ABW Tower and other such buildings.
These buildings are either on Iffco chowk or close to it."
Zafar Iqbal, formerly of Indian Administrative Services
and an expert on land related matters, says as economy
is showing definite signs of improvement and the affects
of economic slowdown are disappearing, the commercial
side of realty is bound to see better days. He says that
even though enough space is on offer in prestigious buildings,
there will still be enough demand for good buildings in nice
locations elsewhere .
But, there is another opinion that due to various counteracting
factors, it will not be easy for commercial projects to create buzz in market.
A spokesman of Integrated PanRealty Solutions Private
Limited says while it is true commercial properties look to be
in for better times, the situation is nowhere close to developments
in residential projects. Explaining his stand, he says getting a loan
for a residential project is much easier compared to getting one for
a commercial project, as investment ticket size is bigger for commercial
projects than in residential projects. In this scenario, it will take some
time for commercial properties to be sold like hot cakes.
Some also say lease rentals are low due to poor demand of
leased spaces; this is thus making commercial real estate lesser
attractive than residential real estate. Several vacant buildings
exemplify the challenge faced by investors in commercial properties .
The maintenance cost is as high as Rs 20 psf (per square feet), even
if the building is vacant, and wastage in common areas is as high as 40 per cent.
Sunil Jindal, CEO of SVP builders, also says unlike residential realty,
commercial realty is only improving . Citing the example of his firm's
project, Ghaziabad-based Opulent Mall, he says more enquires are
pouring in for space now.
The good thing is some of the queries are serious and a few even
translated into deals. "I expect that with an improvement in
economy, Q2 results of most of the companies have surged,
hence, from now onwards, companies of all sizes will buy commercial space."
Rajeev Rai, vice-president (corporate) of Assotech Ltd, feels this
is just the right time to buy commercial property.
FOCAL POINT
Economy is showing definite signs of improvement and the
affects of economic slowdown are disappearing, the commercial
realty is bound to see better days A lot of office space is up for
grabs as many big-ticket companies have shifted from bigger to
smaller offices in the past few months after being hit hard by
slowdown
Source:ET
Friday, November 20, 2009
Volumes, not prices, are the way ahead
20 Nov 2009, Supriya Verma Mishra,
India’s realty firms would like to forget the festive season
of 2009 considering that home buyers stayed away even
during the most auspiciousperiod of the year when normally sales pick up.
The economic slowdown had a major impact on home
sales, although there are indications that buyers are slowly
coming back to the market. The latest data confirms that property
registrations in Mumbai are plateauing out.
Despite the visible caution on the part of buyers, developers
continue to launch new projects. Recently, Brigade, a South-
based realty company, announced its foray in the affordable
housing segment. Being a high-volume low-profit game,
developers are still optimistic that this model may work now j
ust as it clicked during the downturn of 2008.
According to Ambar Maheshwari, director, Investment Advisory
for international real estate consultancy, DTZ , “Volumes of 2007
will not be back and neither will the economy grow at more than
6.5%. Most people’s salaries have not been restored, so exponential
demand is a far-fetched dream.” The upswing in the stock market and
an early recovery in demand prompted developers to hike property
prices. Developers have raised prices ranging between 5% and 15% in
some of the recently launched projects. In fact, some builders are even
delaying the launch of the second phase of their projects to gauge
demand and then assess the prospects of jacking up rates.
The NCR and Delhi-based builders are reverting to the practice of the
good old days. “Basically brokers underwrite the projects at a discount
to the launch price and commit to sell within a stipulated time.
The amount received over and above the underwritten price is
pocketed by the broker and if sales do not take place within the
given time, brokers take up the inventory,” Pankaj Kapoor, managing
director, Liases Foras.
A likely revival in the real estate sector could well be jeopardised
because of the irrational exuberance of builders. There are others
concerns too. It is likely that from next year, the first instalments of
restructured debt of most of these builders would become due.
According to RBI data, there was a 55% year-on year (y-o-y) growth
in August 2009 in bank loans to the realty sector compared to the 46% y-o-y
growth in August 2008.
It is this huge exposure to the high beta sector that led RBI to
increase provisioning norms on realty loans by banks. Developers
will need to ensure that cash flows are sufficient to service their debt.
That will call for a focus on increasing volumes and not prices.
Not too long ago, property registrations rose by 20% starting March 2009.
The growth continued at a monthly average of 7%. However, builders seem
to have got carried away and misread the pent-up demand with the result
that price started to rise in August 2009. The impact was felt
immediately — a 13% drop in flats registered in August.
The trend continued in September. The decline was attributed
to ‘pitr paksh’, a period considered inauspicious for buying homes.
However, with October being no different, it is clear that the going
will not be easy for the realty sector.
India’s realty firms would like to forget the festive season
of 2009 considering that home buyers stayed away even
during the most auspiciousperiod of the year when normally sales pick up.
The economic slowdown had a major impact on home
sales, although there are indications that buyers are slowly
coming back to the market. The latest data confirms that property
registrations in Mumbai are plateauing out.
Despite the visible caution on the part of buyers, developers
continue to launch new projects. Recently, Brigade, a South-
based realty company, announced its foray in the affordable
housing segment. Being a high-volume low-profit game,
developers are still optimistic that this model may work now j
ust as it clicked during the downturn of 2008.
According to Ambar Maheshwari, director, Investment Advisory
for international real estate consultancy, DTZ , “Volumes of 2007
will not be back and neither will the economy grow at more than
6.5%. Most people’s salaries have not been restored, so exponential
demand is a far-fetched dream.” The upswing in the stock market and
an early recovery in demand prompted developers to hike property
prices. Developers have raised prices ranging between 5% and 15% in
some of the recently launched projects. In fact, some builders are even
delaying the launch of the second phase of their projects to gauge
demand and then assess the prospects of jacking up rates.
The NCR and Delhi-based builders are reverting to the practice of the
good old days. “Basically brokers underwrite the projects at a discount
to the launch price and commit to sell within a stipulated time.
The amount received over and above the underwritten price is
pocketed by the broker and if sales do not take place within the
given time, brokers take up the inventory,” Pankaj Kapoor, managing
director, Liases Foras.
A likely revival in the real estate sector could well be jeopardised
because of the irrational exuberance of builders. There are others
concerns too. It is likely that from next year, the first instalments of
restructured debt of most of these builders would become due.
According to RBI data, there was a 55% year-on year (y-o-y) growth
in August 2009 in bank loans to the realty sector compared to the 46% y-o-y
growth in August 2008.
It is this huge exposure to the high beta sector that led RBI to
increase provisioning norms on realty loans by banks. Developers
will need to ensure that cash flows are sufficient to service their debt.
That will call for a focus on increasing volumes and not prices.
Not too long ago, property registrations rose by 20% starting March 2009.
The growth continued at a monthly average of 7%. However, builders seem
to have got carried away and misread the pent-up demand with the result
that price started to rise in August 2009. The impact was felt
immediately — a 13% drop in flats registered in August.
The trend continued in September. The decline was attributed
to ‘pitr paksh’, a period considered inauspicious for buying homes.
However, with October being no different, it is clear that the going
will not be easy for the realty sector.
NHAI identifies 10 mega projects worth Rs 45,000 crore
The government has identified 10 lucrative mega highway
projects to be awarded to private developers.
These projects, involving investment of Rs 45,000 crore,
will be awarded in the next two years.
These projects covering 5,000 km will be awarded on a revenue-share
basis, under which the developers pay a part of the toll earnings to
the government, an National Highways Authority of India (NHAI) official said.
“Since these are lucrative projects from the point of toll revenues,
we would award them on revenue sharing basis,” the official added.
The NHAI has already asked potential bidders to submit their initial
‘request for qualification’(RFQ) documents for two of these 10 projects
spread over Rajasthan, Gujarat and Andhra Pradesh.
The RFQ for 6-laning of the 436-km Ichapuram-Rajahmundry project
in Andhra Pradesh, involving Rs 3,550-crore, has already been issued,
while that for six-laning of the 435-km- long Kishangarh (Rajasthan)-Ahmedabad
section worth Rs 4,284 crore, will be issued shortly, said the sources.
The biggest project of the 10 projects is the about Rs 8,000 crore
double-laning of the 700-km stretch between Amritsar in Punjab
and Jodhpur in Rajasthan.
projects to be awarded to private developers.
These projects, involving investment of Rs 45,000 crore,
will be awarded in the next two years.
These projects covering 5,000 km will be awarded on a revenue-share
basis, under which the developers pay a part of the toll earnings to
the government, an National Highways Authority of India (NHAI) official said.
“Since these are lucrative projects from the point of toll revenues,
we would award them on revenue sharing basis,” the official added.
The NHAI has already asked potential bidders to submit their initial
‘request for qualification’(RFQ) documents for two of these 10 projects
spread over Rajasthan, Gujarat and Andhra Pradesh.
The RFQ for 6-laning of the 436-km Ichapuram-Rajahmundry project
in Andhra Pradesh, involving Rs 3,550-crore, has already been issued,
while that for six-laning of the 435-km- long Kishangarh (Rajasthan)-Ahmedabad
section worth Rs 4,284 crore, will be issued shortly, said the sources.
The biggest project of the 10 projects is the about Rs 8,000 crore
double-laning of the 700-km stretch between Amritsar in Punjab
and Jodhpur in Rajasthan.
Lodha Group unveils phase II of luxury project
Lodha Bellezza, a ‘By Invitation Only’ project of the Mumbai-based
Lodha group, has announced the launch of the second phase
of this super luxury project, consisting of two high-rise towers of 40 floors each.
“With Lodha Bellezza, we bring to Hyderabad a thematic affiliation to
California style living, sky villas,” said Abhisheck Lodha,
director, Lodha Group.
With only one sky villa per floor, Lodha Bellezza
goes much beyond quality construction, making a definitive
statement in opulence and luxury.
From helipads at the top of each tower, the wi-fi pavilions
over the pools to the landscaping, every detail collaborates
to provide a living experience that truly harmonises with
international standards.
The group is developing over 25 million sq. ft of
prime real estate spread over 27 projects.
The group has recently expanded into Hyderabad
with the launch of Lodha Bellezza, a super-luxury residential project.
Lodha group, has announced the launch of the second phase
of this super luxury project, consisting of two high-rise towers of 40 floors each.
“With Lodha Bellezza, we bring to Hyderabad a thematic affiliation to
California style living, sky villas,” said Abhisheck Lodha,
director, Lodha Group.
With only one sky villa per floor, Lodha Bellezza
goes much beyond quality construction, making a definitive
statement in opulence and luxury.
From helipads at the top of each tower, the wi-fi pavilions
over the pools to the landscaping, every detail collaborates
to provide a living experience that truly harmonises with
international standards.
The group is developing over 25 million sq. ft of
prime real estate spread over 27 projects.
The group has recently expanded into Hyderabad
with the launch of Lodha Bellezza, a super-luxury residential project.
Mukesh Ambani mulls entry into low-cost housing
After successfully dabbling in organised retail in 2006,
Mukesh Ambani, chairman of India’s largest private sector
company, Reliance Industries (RIL), has now set his eyes
on no-frills, low-cost housing. The initiative, still on the
drawing board, could be kicked off by 2010, reports Business Standard.
An RIL official said the company would do large projects
and at multiple locations.
“RIL has deep pockets and excellent execution skills.
It has executed two large projects like the Jamnagar refinery
and the KG-D6 basin in a record time. Another such large
project is only obvious for the company to get into,” a source
close to the development was quoted as saying.
RIL holds a land bank of 5,000 hectares in Haryana
through Reliance Ventures, a subsidiary of RIL created
by forming a joint venture with Haryana State Industrial
Investment Development Corporation and over 4,840
hectares through the Navi Mumbai SEZ, in association with
Cidco (the Maharashtra government’s industrial and township
development arm), the report added.
“RIL is sitting on a huge land bank with regard to its
special economic zones (SEZs) in various locations.
It could be putting that to commercial use for mega housing
projects in the no-frills category,” said an analyst from a
Mumbai-based broking firm who tracks RIL closely.
Earlier this year, the Tata Group’s unlisted firm,
Tata Housing Development Company, said it would
invest up to Rs 100 crore in a 1,200-unit township at
Boisar, on the outskirts of Mumbai, and would sell
apartments at prices ranging between Rs 3.9 lakh
and Rs 6.7 lakh. The company aims to build up to 15,000 low-cost
homes over the next four years across several cities, including
Mumbai, Delhi and Bangalore, it said.
Source:Business standard
Mukesh Ambani, chairman of India’s largest private sector
company, Reliance Industries (RIL), has now set his eyes
on no-frills, low-cost housing. The initiative, still on the
drawing board, could be kicked off by 2010, reports Business Standard.
An RIL official said the company would do large projects
and at multiple locations.
“RIL has deep pockets and excellent execution skills.
It has executed two large projects like the Jamnagar refinery
and the KG-D6 basin in a record time. Another such large
project is only obvious for the company to get into,” a source
close to the development was quoted as saying.
RIL holds a land bank of 5,000 hectares in Haryana
through Reliance Ventures, a subsidiary of RIL created
by forming a joint venture with Haryana State Industrial
Investment Development Corporation and over 4,840
hectares through the Navi Mumbai SEZ, in association with
Cidco (the Maharashtra government’s industrial and township
development arm), the report added.
“RIL is sitting on a huge land bank with regard to its
special economic zones (SEZs) in various locations.
It could be putting that to commercial use for mega housing
projects in the no-frills category,” said an analyst from a
Mumbai-based broking firm who tracks RIL closely.
Earlier this year, the Tata Group’s unlisted firm,
Tata Housing Development Company, said it would
invest up to Rs 100 crore in a 1,200-unit township at
Boisar, on the outskirts of Mumbai, and would sell
apartments at prices ranging between Rs 3.9 lakh
and Rs 6.7 lakh. The company aims to build up to 15,000 low-cost
homes over the next four years across several cities, including
Mumbai, Delhi and Bangalore, it said.
Source:Business standard
Thursday, November 19, 2009
See continued appetite for realty IPOs in pipeline: Enam
Yesterday, Enam took investors on a Mumbai real estate visit from Nariman Point to Goregaon. In an interview with CNBC-TV18, Pankaj Jajoo, Senior VP, Enam Securities and Chirag Negandhi, Head Analyst, Real Estate, Enam Securities spoke about the feedback from investors and a general outlook on the real estate and cement space.Below is a verbatim transcript of the interview.
Q: What was the feedback from investors right from the town of Mumbai all the way to the suburbs? We have seen a bit of bounce in the prices, what is the feedback from the investors that you have got?
Negandhi: To look at why we did the tour, it was primarily to give the investors a sense of different real estate businesses which is residential, commercial, retail, hospitality, slum rehabilitation and other kind of redevelopment across Mumbai, be it the northern suburbs or in the South Mumbai, and also to get a sense of whether infrastructure is keeping pace with all the development that is happening.
What we have seen and even from the feedback yesterday is that investor interest is back, end users are back, you have seen volumes at all time highs, disbursements on first loans across all banks are also at highs.
So, it clearly is good times for the real estate sector especially the residential. Commercial has started picking up now. You are hearing of IT and all other commercial leasing also picking up. So, clearly in the residential you are already above the 2007 highs in terms of the volumes. So, it is definitely good times for the sector right now.
Q: What’s happening in the cement space? There was one merger ratio announced between Samruddhi and UltraTech, what is your own take on this ratio? Do you think it is fair to UltraTech and fair to Grasim as well? More importantly, your view on the cement sector itself, there was a sense of overcapacity that was looming on the industry, but with all those noises coming on road construction, do you think cement companies are still good value?
Jajoo: The merger ratio between Samruddhi and Ultratech is fair to the shareholders of both companies and factors in the differential capacity between the two companies as well as their financial standing.
And that’s also reflected in the fact that stock prices of both Ultratech and Grasim looked up and the markets gave a thumbs up to the ratio. What this will really do is create a very large cement company with almost 50 million tonnes of capacity and a 20% market share in India, and that is something that investors cannot ignore or will find hard to ignore.
Hence there is healthy potential of becoming not only a very valuable company in terms of cash flows and assets but also a company that will find attraction with investors.
The second point that you had in terms of cement demand and supply, really in any commodity industry you have capacities coming in and they tend to get bunched up as is expected in the current year where large capacities are going on stream.
At the same time the infrastructure story continues to be robust and if demand picks up the way it has picked up in other growth economies, for example China, we need a lot more cement than what companies are currently producing and are planning to produce over the next few years.
Q: One concern is about the kind of dilution, what it is getting from Grasim’s cement business is pretty much what it already has in terms of capacity and that too at slightly lower margins than its own margins. So in that sense there is a bit of a disappointment with the merger ratio?
Jajoo: What one has to take into account is the fact that Grasim would have a capacity of over 25 million tonnes while UltraTech’s capacity is about 23 million tonnes. Grasim also has a very valuable white cement business where profitability is very high and taking into account the fact that the plant vintages of the two companies, their marketing presence, overall I think it’s a fair ratio.
And the dilution that you spoke about is correct in terms of the share exchange ratio that equity will go up. But this also removes all doubts or concerns or apprehensions that investors had over two cement entities within the group. So really what both set of shareholders now get to own is a consolidated combined cement entity with huge potential.
Q: How are the investors looking at the real estate space? It’s a fairly motley space and even in terms of price increases there is a wide difference between what’s happening in Mumbai and what’s happening in the IT cities like Bangalore which is again different from what’s happening in Hyderabad. Sector wise or stock wise what are the preferences you are selling?
Negandhi: Even if you talk about in let’s say an IT city of Bangalore, what we are getting as a sense across all cities is that volumes have started picking up, which is usually a precursor to prices moving as well. So residential is definitely a space that we like.
If you look at even the list of companies that are now actually trying to list, we are seeing more city-centric players where the visibility of cash flows is much higher, whether you look at Bangalore or Mumbai or even in the Pune region, and compared to larger and more pan-India players what you are getting now is more city-centric players and even the ones that are coming in as pan India players are coming in with tier-II and tier-III cities as a focus area. There is no one really in the organised space.
So, clearly those residential and those levered on commercial because of the pickup that we are seeing in commercial volumes by itself are the ones that we really like. So they stand out if you look at one of the city centric properties developers, they stand out amongst the others.
Q: You also took investors to HDIL’s property what is your view on that stock, I believe Enam tracks this particular stock?
Jajoo: I can talk about the IPOs in the real estate space. On the point about companies that are going public now, we are as an investment bank leading a large number of the IPOs that are going to market and the initial interaction with investors indicates that there is continued appetite for real estate stocks in India.
The total amount of money that was raised in the previous rally by real estate companies, we have raised almost the same amount already by way of QIPs and secondary block.
For the IPOs that are lined up there is continued appetite. People want to look at cash flows and people are finding that there is a differentiation in the stories that are coming about and hence there is appetite.
India's mortgage business to boom: Keki Mistry
Property prices are the biggest concern for HDFC’s housing loan growth, the financial firm’s Managing Director Keki Mistry has said. "However, property prices are still low apart from those in the metros," he said.
"The penetration of mortgage versus the GDP ratio is still very low," he said. "We are looking to double our home loan disbursements. We are confident of achieving loan growth of at least 20%. We are already growing at 24% quarter-on-quarter."
Mistry said HDFC — the country’s largest home loan lender — was also examining an initial public offer (IPO) for its life insurance business.
Here is a verbatim transcript of the exclusive interview with Keki Mistry on CNBC-TV18.
Q: How was the mood at the conference? What are the key messages that HDFC had given to the investors?
A: As far as this conference was concerned, I just went for one presentation, so I don’t know what the mood amongst investors in this conference was. But by and large, I am meeting investors all the time. I think the investor mood is very strong, very bullish. People are a little worried about valuations – some of the long only investors in particular. But by and large, people are very happy with India, people believe that India’s growth story is sustainable and is there for a long period of time. So the mood is very good.
Q: The key message that you have given to the investors was that credit growth is still intact. What makes you so bullish?
A: What makes us bullish? It is various things. If we look at the Q2 of financial year, which the period from July to September this year and compare that with Q1 which is April to June, then in terms of individual loan approvals, our growth was 26%. Individual loan disbursements were higher by 24% and this is on a sequential basis. So if we take the year as a whole and extrapolate then the growth could be enormous.
Also, if you look at penetration of mortgages in India, it continues to be very low. The mortgage to GDP ratio in India is 7%. In the US this ratio is 80%, UK its 86%, Denmark is 93% but even if you look at developing counties then China is at 12% - though I believe the latest number is 14% but the official number is 12% – but most other developing Asian countries are all between 20-25%. In India, we are at 7%.
So even if 7% was to go to 14% we would be looking at doubling of the existing stock of housing loans before we even remotely get to a level of saturation and that process by itself would take out almost a decade.
Q: But the key thing that will maintain growth itself will be what Reserve Bank of India (RBI) does? What would the exit strategy for RBI be?
A: I don’t think and let’s be clear, people do not buy a house because interest rates are higher or interest rates are lower. I have said this consistently for the last many years. People buy a house because the house is affordable. The house price is right, their income is good, they are confident about their future – that is the reason people buy a house. Nobody goes and buys a house because interest rates are half percent higher or lower.
If you believe rates are higher at the moment you take a floating rate loan because when rates come down you will get benefit of floating rate loan. The biggest concern is property prices – property prices must remain affordable.
Q: We have seen an increase in property prices in Bangalore, Bombay and Delhi, how much of an increase will happen now you think?
A: If you take 2007, the peak was probably calendar 2007 end and early 2008, and if you compare that with January–February 2009, property prices by and large would have fallen by anything from 15% in some places to as much as 30–35%. So the drop would be anything between 15–35%. Prices have picked up again post May. If you look at Bombay or Delhi, it is not the right comparison but central Bombay or Delhi, the prices have run up a lot. They are back up 20–25% from the lows but in several other parts of the country prices have moved up but they have moved up maybe 5-10% from their lows. So today in most parts of the country, not Bombay and Delhi and not maybe some other big metros but in most other parts of the country property prices are still a lot lower than what they were at the peak.
Q: But there nothing to worry as of now?
A: Yes, whether property prices go up or not is really a function of affordability and the confidence level in people. As long as people are willing to pay higher price, prices will remain high. Prices have not gone up only because cost of construction has gone up or land prices have shot up but just that people are willing to pay a higher price, and therefore, developers have taken the prices higher.
Q: Did you update your investors about AMC and the life insurance IPOs?
A: As far as life insurance is concerned, we said we would be looking at an IPO. We have still not disclosed some key numbers on the insurance company like what is the embedded value, what is the new business profit margin. The only reason we have not disclosed these numbers is because we believe we need about 9–10 years experience in the business before you can start talking about these numbers in a more confident manner because these numbers are computed on the basis of a number of assumptions. These assumptions need to be tested over a period of time before you can say with confidence that these assumptions are right.
So we will be ready to disclose the new business profit margin and the embedded value number by March 2010 which is the end of this financial year and the IPO would happen after that.
Q: Are you already in talks with the regulatory authorities?
A: No, not yet.
Q: We can expect it at a year from March 2010?
A: You should expect it anytime after March 2010. But we haven’t zeroed down on any particular date. It would be probably, in the course of the next financial year or probably immediately after that but in the not too distant future.
Q: One key concern that most people keep having is the way the PSU banks are aggressive in their home loan segment – are you worried about it?
A: I talked about our growth – we grew 26% in terms of approvals and 24% in terms of disbursements on a sequential basis. This is just Q2 over Q1. We are very confident that we will have a growth of minimum of 20% this year and hopefully for the next few years. So good luck to whoever is there in the business.
But I can tell you that penetration is very low, shortage of housing in India is massive and one must also recognize that demographics in India are such that the housing market has to grow. About 60% of India’s population is below 30 years of age. Typically, a person finishes his post graduation at the age of 23-24 and then he then take up a job and would work for couple of years. So he would be working between 24-25-26 then he would get married, so marriage happens in mid-20s.
Again it’s a custom in India particularly with middle income people that the married couple will stay with the boys parents for a few years and then you get children. The children start going to school and then the extended becomes too large for the parents house, which they occupy, which is the time they look to buy a house.
So the average age of our borrower is 35 years and its not people in the 20’s who are buying houses but people in the mid-30s who are buying houses and with 60% of the population being below 30years of age – all these people will over the next 5-15 years will need housing.
Q: The funds, which were borrowed last year, you are likely to replace it with lower cost of funds this time. Will the benefit flow in Q3-Q4 onwards or have you already accounted?
A: We give matched loans. So when we give loans on a fixed rate basis to our customers, it is out of fixed rate funding. When we give floating rate loans, it is out of floating rate funding. Last year when interest rates went up so much, we did not borrow too much the wholesale market. We borrowed more from the retail market.
So if we looked at the month of October, when interest rates were at the highest and liquidity was at its lowest – 90% of our funding in the month of October came through retail deposits.
Mistry said HDFC — the country’s largest home loan lender — was also examining an initial public offer (IPO) for its life insurance business.
Here is a verbatim transcript of the exclusive interview with Keki Mistry on CNBC-TV18.
Q: How was the mood at the conference? What are the key messages that HDFC had given to the investors?
A: As far as this conference was concerned, I just went for one presentation, so I don’t know what the mood amongst investors in this conference was. But by and large, I am meeting investors all the time. I think the investor mood is very strong, very bullish. People are a little worried about valuations – some of the long only investors in particular. But by and large, people are very happy with India, people believe that India’s growth story is sustainable and is there for a long period of time. So the mood is very good.
Q: The key message that you have given to the investors was that credit growth is still intact. What makes you so bullish?
A: What makes us bullish? It is various things. If we look at the Q2 of financial year, which the period from July to September this year and compare that with Q1 which is April to June, then in terms of individual loan approvals, our growth was 26%. Individual loan disbursements were higher by 24% and this is on a sequential basis. So if we take the year as a whole and extrapolate then the growth could be enormous.
Also, if you look at penetration of mortgages in India, it continues to be very low. The mortgage to GDP ratio in India is 7%. In the US this ratio is 80%, UK its 86%, Denmark is 93% but even if you look at developing counties then China is at 12% - though I believe the latest number is 14% but the official number is 12% – but most other developing Asian countries are all between 20-25%. In India, we are at 7%.
So even if 7% was to go to 14% we would be looking at doubling of the existing stock of housing loans before we even remotely get to a level of saturation and that process by itself would take out almost a decade.
Q: But the key thing that will maintain growth itself will be what Reserve Bank of India (RBI) does? What would the exit strategy for RBI be?
A: I don’t think and let’s be clear, people do not buy a house because interest rates are higher or interest rates are lower. I have said this consistently for the last many years. People buy a house because the house is affordable. The house price is right, their income is good, they are confident about their future – that is the reason people buy a house. Nobody goes and buys a house because interest rates are half percent higher or lower.
If you believe rates are higher at the moment you take a floating rate loan because when rates come down you will get benefit of floating rate loan. The biggest concern is property prices – property prices must remain affordable.
A: If you take 2007, the peak was probably calendar 2007 end and early 2008, and if you compare that with January–February 2009, property prices by and large would have fallen by anything from 15% in some places to as much as 30–35%. So the drop would be anything between 15–35%. Prices have picked up again post May. If you look at Bombay or Delhi, it is not the right comparison but central Bombay or Delhi, the prices have run up a lot. They are back up 20–25% from the lows but in several other parts of the country prices have moved up but they have moved up maybe 5-10% from their lows. So today in most parts of the country, not Bombay and Delhi and not maybe some other big metros but in most other parts of the country property prices are still a lot lower than what they were at the peak.
Q: But there nothing to worry as of now?
A: Yes, whether property prices go up or not is really a function of affordability and the confidence level in people. As long as people are willing to pay higher price, prices will remain high. Prices have not gone up only because cost of construction has gone up or land prices have shot up but just that people are willing to pay a higher price, and therefore, developers have taken the prices higher.
Q: Did you update your investors about AMC and the life insurance IPOs?
A: As far as life insurance is concerned, we said we would be looking at an IPO. We have still not disclosed some key numbers on the insurance company like what is the embedded value, what is the new business profit margin. The only reason we have not disclosed these numbers is because we believe we need about 9–10 years experience in the business before you can start talking about these numbers in a more confident manner because these numbers are computed on the basis of a number of assumptions. These assumptions need to be tested over a period of time before you can say with confidence that these assumptions are right.
So we will be ready to disclose the new business profit margin and the embedded value number by March 2010 which is the end of this financial year and the IPO would happen after that.
Q: Are you already in talks with the regulatory authorities?
A: No, not yet.
Q: We can expect it at a year from March 2010?
A: You should expect it anytime after March 2010. But we haven’t zeroed down on any particular date. It would be probably, in the course of the next financial year or probably immediately after that but in the not too distant future.
Q: One key concern that most people keep having is the way the PSU banks are aggressive in their home loan segment – are you worried about it?
A: I talked about our growth – we grew 26% in terms of approvals and 24% in terms of disbursements on a sequential basis. This is just Q2 over Q1. We are very confident that we will have a growth of minimum of 20% this year and hopefully for the next few years. So good luck to whoever is there in the business.
But I can tell you that penetration is very low, shortage of housing in India is massive and one must also recognize that demographics in India are such that the housing market has to grow. About 60% of India’s population is below 30 years of age. Typically, a person finishes his post graduation at the age of 23-24 and then he then take up a job and would work for couple of years. So he would be working between 24-25-26 then he would get married, so marriage happens in mid-20s.
Again it’s a custom in India particularly with middle income people that the married couple will stay with the boys parents for a few years and then you get children. The children start going to school and then the extended becomes too large for the parents house, which they occupy, which is the time they look to buy a house.
So the average age of our borrower is 35 years and its not people in the 20’s who are buying houses but people in the mid-30s who are buying houses and with 60% of the population being below 30years of age – all these people will over the next 5-15 years will need housing.
Q: The funds, which were borrowed last year, you are likely to replace it with lower cost of funds this time. Will the benefit flow in Q3-Q4 onwards or have you already accounted?
A: We give matched loans. So when we give loans on a fixed rate basis to our customers, it is out of fixed rate funding. When we give floating rate loans, it is out of floating rate funding. Last year when interest rates went up so much, we did not borrow too much the wholesale market. We borrowed more from the retail market.
So if we looked at the month of October, when interest rates were at the highest and liquidity was at its lowest – 90% of our funding in the month of October came through retail deposits.
Tata group plans to open 30 more Gateway Hotels by 2015
Thu, Nov 19, 2009
Tata group-promoted Indian Hotels Company (IHCL) is planning to
open 30 more hotels of its mid-segment premium brand ‘
The Gateway Hotel’ chain by 2015, a senior company official said
At present, there are 20 Gateway Hotels across the country.
“This is our upscale chain. We are planning to open 13 hotels
by 2012 and then scale-up operations to 50 by 2015 across the
country,” Gateway Hotel Director (Operations) Monica
Lakhmana told on the sidelines of a conference here.
The Gateway Hotels are positioned above IHCL’s economy
brand ‘Ginger’ and below the Residency and Taj brands and
would cater to a pan-India network of hotels and resorts
offering all key services at competitive prices.
“We are looking at Tier II and other smaller cities as they
are growing and also plan to expand in places that attract
more tourists,” she said.
Of the 20 hotels under this brand, 16 hotels belong to IHCL
and were rechristened as Gateway Hotel. However, the other
four were new constructions.
On the investment part, Lakhmana said the new hotels would
be run on the management contract model in which private
developers would invest and build hotels on Gateway’s
prototype and brand and later IHCL would purchase the
same from them.
However, she refused to divulge the revenue-sharing pattern.
Gateway has presence in Agra, Bangalore, Calicut, Chikmagalur,
Coonoor, Jaipur, Jaisalmer, Madurai, Mangalore, Nasik, Sasan Gir,
Surat, Vadodara, Varanasi, Vijayawada, Vishakhapatnam and
Jodhpur. Two more will come up at Chennai and New Delhi in
June next year.
Jalandhar, Mysore, Navi Mumbai, Raipur and Gondia are the next
destinations in the pipeline.
Tata group-promoted Indian Hotels Company (IHCL) is planning to
open 30 more hotels of its mid-segment premium brand ‘
The Gateway Hotel’ chain by 2015, a senior company official said
At present, there are 20 Gateway Hotels across the country.
“This is our upscale chain. We are planning to open 13 hotels
by 2012 and then scale-up operations to 50 by 2015 across the
country,” Gateway Hotel Director (Operations) Monica
Lakhmana told on the sidelines of a conference here.
The Gateway Hotels are positioned above IHCL’s economy
brand ‘Ginger’ and below the Residency and Taj brands and
would cater to a pan-India network of hotels and resorts
offering all key services at competitive prices.
“We are looking at Tier II and other smaller cities as they
are growing and also plan to expand in places that attract
more tourists,” she said.
Of the 20 hotels under this brand, 16 hotels belong to IHCL
and were rechristened as Gateway Hotel. However, the other
four were new constructions.
On the investment part, Lakhmana said the new hotels would
be run on the management contract model in which private
developers would invest and build hotels on Gateway’s
prototype and brand and later IHCL would purchase the
same from them.
However, she refused to divulge the revenue-sharing pattern.
Gateway has presence in Agra, Bangalore, Calicut, Chikmagalur,
Coonoor, Jaipur, Jaisalmer, Madurai, Mangalore, Nasik, Sasan Gir,
Surat, Vadodara, Varanasi, Vijayawada, Vishakhapatnam and
Jodhpur. Two more will come up at Chennai and New Delhi in
June next year.
Jalandhar, Mysore, Navi Mumbai, Raipur and Gondia are the next
destinations in the pipeline.
Reaction of MCHI on RBI’s provisioning norms for commercial property
Maharashtra Chamber of Housing Industry (MCHI) has expressed
its concern on the Reserve Bank of India (RBI) announcement to
revise the provisioning norms from 0.40 to 1 per cent for loans
to the commercial real estate sector, as the commercial property
construction and IT/ITes spaces have just started signs of revival
after a long lull.
Commenting on the RBI’s move, MCHI Secretary
Mr. Mayur Shah said, “RBI’s move could be detrimental
at the time when the commercial and IT construction have just
started to move up after a long interval. Though, the impact of
the RBI move would be marginal for the developers who enjoy
good credit rating, it would give negative signals to the industry
as a whole. It would also push up the cost of the commercial
construction and escalate the prices further.
Mr. Shah, who is also the Managing Director of the
Marathon Group further, said,
“We the members of the MCHI urge the central
bank to reconsider the proposed move, in the
overall interest of the industry. To achieve the
economic growth, we will need world class
commercial/IT spaces and retail spaces, so
discouraging the development of commercial real
estate shall be detrimental to overall economic growth.
Also, Banks are only funding for the construction finance
and not land acquisition so asset bubble fear is out of
place at this time”.
Rs 10,00,000 crore is required
Nov 18
Abhishek Anand
A staggering Rs 10,00,000 crore is required to meet the financing needs of the
country’s housing requirements. So says
S Sridhar, chairman and managing director, National Housing Bank. With a burgeoning middle class and soaring aspirations, this figure will only grow.
There is a huge business potential waiting to be tapped as the housing sector slowly comes out of the slump and demand builds up. In fact, Sridhar says that the country’s banking sector does not have the money to fund the estimated needs of the sector.
Lenders are falling over each other to corner a piece of the pie. The country’s biggest bank, State Bank of India (SBI) started the rate war earlier this year by offering lowest home loan rates during the slowdown. It has kept the war going by extending the SBI Easy Home Loan Scheme. Under the scheme, SBI is providing home loans at 8 per cent for the first year and 8.5 per cent for second and the third year, till the end of the present financial year.
Not to be left behind, Delhi-based Punjab National Bank (PNB), the second-largest PSU lender, too has extended its Festival Home Loan Bonanza Scheme by two months till the end of December. PNB is offering housing loans of up to Rs 30 lakh at 8.50 per cent (fixed) for the first three years and 2 per cent to 2.50 per cent below benchmark prime lending rates in subsequent years of loan tenure under floating option. In addition, PNB has also reduced the amount of money that a home buyer has to pay upfront to 15 per cent on housing loans of up to Rs 20 lakh.
It’s not just the public sector banks that are keen to grow their home loan portfolio. Private lenders are also logging in. Bank of Rajasthan recently lowered interest rates on home loan to 7.5 per cent, the lowest going rate in the segment.
According to the new revised interest rate regime of the Apna Ghar Scheme, the bank would be charging 7.5 per cent for the first year on loans up to Rs 30 lakh. Interest rate for the second and third year is 8.50 per cent, and 8.75 per cent or 0.25 per cent below the retail prime lending rates from the fourth year onwards.
For housing loans above Rs 30 lakh, 8 per cent interest would be charged for the first year, 9 per cent for the second and third year and 9.75 per cent from the fourth year onwards, for all maturity periods. Bank of Rajasthan has a total home loan outstanding portfolio of Rs 500 crore.
The government too has chipped in to stir the home loan market. Not only have efforts been made to encourage builders to come up with affordable housing, the government recently came out with a scheme that provides interest subsidy on home loans up to Rs 20 lakh.
The government is providing an interest subsidy of 1 per cent on housing loans of up to Rs 10 lakh, provided the cost of the house does not exceed Rs 20 lakh. The additional subvention means that home loans are virtually at the lowest level ever.
As a result of all these efforts, demand for home loans is showing signs of improvement. Public sector banks have reported 17.27 per cent year-on-year growth in the home loan segment. This is far better than overall credit growth of 11.2 per cent reported by scheduled commercial banks.
SBI, which has been very aggressive in the home loan market, has registered a year-on-year growth of 23 per cent. Its total home loan outstanding portfolio stands at Rs 62,338 crore.
The largest housing finance company, HDFC’s loan approvals during the six-month period ending September 30 amounted to Rs 28,418 crore compared with Rs 24,180 crore in the corresponding period previous year, a growth of 18 per cent.
Loan disbursements during the six-month period ended September 30 stood at Rs 22,342 crore, up 26 per cent from the corresponding period previous year. Some other banks such as Oriental Bank of Commerce (OBC) too have witnessed a decent growth in home loan portfolio.
“We have clocked a year-on-year growth of 28 per cent in our housing loan portfolio during the quarter ended September 2009 and early signals suggest the third quarter would be better than the second quarter,” said H Ratnakara Hedge, executive director of OBC.
But lowering of interest rates is not the only way of enhancing home loan portfolio. Banks such as IDBI Bank have adopted new ways. The Mumbai-based bank, which has turned out to be the fourth largest home loan distributor in the present financial year so far, is utilising property expos as a tool to attract borrowers.
“We would be organising 17 property expos in all and hope to sanction close to Rs 2,500 crore of home loans from these venues alone by the middle of December,” said C S Jain, head of personal banking at IDBI Bank.
However, borrowers may not be as eager as the lenders. The offtake of housing loans would depend on the movement of property prices. Property prices in many parts of the country have been hardening, which may create uncertainty among buyers. According to Residex, an index of property prices across 15 cities prepared by National Housing Bank, a wholly-owned subsidiary of the Reserve Bank of India, property prices have firmed up in at least nine of those 15 cities.
According to the index, prices of residential properties in Mumbai have increased by 5.98 per cent between December 2008 and June 2009, and by 26 per cent and 13 per cent in Chennai and Kolkata respectively. Prices increased by 27 per cent in Ahmedabad and a whopping 36 per cent in Faridabad in Delhi's neighbourhood. Other major cities that witnessed price rise are Lucknow, Pune, Surat and Patna.
The lenders are banking on the last of three basic human needs of roti, kapada aur makaan (food, cloth and housing) to keep the cash registers ringing.
S Sridhar, chairman and managing director, National Housing Bank. With a burgeoning middle class and soaring aspirations, this figure will only grow.
There is a huge business potential waiting to be tapped as the housing sector slowly comes out of the slump and demand builds up. In fact, Sridhar says that the country’s banking sector does not have the money to fund the estimated needs of the sector.
Lenders are falling over each other to corner a piece of the pie. The country’s biggest bank, State Bank of India (SBI) started the rate war earlier this year by offering lowest home loan rates during the slowdown. It has kept the war going by extending the SBI Easy Home Loan Scheme. Under the scheme, SBI is providing home loans at 8 per cent for the first year and 8.5 per cent for second and the third year, till the end of the present financial year.
Not to be left behind, Delhi-based Punjab National Bank (PNB), the second-largest PSU lender, too has extended its Festival Home Loan Bonanza Scheme by two months till the end of December. PNB is offering housing loans of up to Rs 30 lakh at 8.50 per cent (fixed) for the first three years and 2 per cent to 2.50 per cent below benchmark prime lending rates in subsequent years of loan tenure under floating option. In addition, PNB has also reduced the amount of money that a home buyer has to pay upfront to 15 per cent on housing loans of up to Rs 20 lakh.
It’s not just the public sector banks that are keen to grow their home loan portfolio. Private lenders are also logging in. Bank of Rajasthan recently lowered interest rates on home loan to 7.5 per cent, the lowest going rate in the segment.
According to the new revised interest rate regime of the Apna Ghar Scheme, the bank would be charging 7.5 per cent for the first year on loans up to Rs 30 lakh. Interest rate for the second and third year is 8.50 per cent, and 8.75 per cent or 0.25 per cent below the retail prime lending rates from the fourth year onwards.
For housing loans above Rs 30 lakh, 8 per cent interest would be charged for the first year, 9 per cent for the second and third year and 9.75 per cent from the fourth year onwards, for all maturity periods. Bank of Rajasthan has a total home loan outstanding portfolio of Rs 500 crore.
The government too has chipped in to stir the home loan market. Not only have efforts been made to encourage builders to come up with affordable housing, the government recently came out with a scheme that provides interest subsidy on home loans up to Rs 20 lakh.
The government is providing an interest subsidy of 1 per cent on housing loans of up to Rs 10 lakh, provided the cost of the house does not exceed Rs 20 lakh. The additional subvention means that home loans are virtually at the lowest level ever.
As a result of all these efforts, demand for home loans is showing signs of improvement. Public sector banks have reported 17.27 per cent year-on-year growth in the home loan segment. This is far better than overall credit growth of 11.2 per cent reported by scheduled commercial banks.
SBI, which has been very aggressive in the home loan market, has registered a year-on-year growth of 23 per cent. Its total home loan outstanding portfolio stands at Rs 62,338 crore.
The largest housing finance company, HDFC’s loan approvals during the six-month period ending September 30 amounted to Rs 28,418 crore compared with Rs 24,180 crore in the corresponding period previous year, a growth of 18 per cent.
Loan disbursements during the six-month period ended September 30 stood at Rs 22,342 crore, up 26 per cent from the corresponding period previous year. Some other banks such as Oriental Bank of Commerce (OBC) too have witnessed a decent growth in home loan portfolio.
“We have clocked a year-on-year growth of 28 per cent in our housing loan portfolio during the quarter ended September 2009 and early signals suggest the third quarter would be better than the second quarter,” said H Ratnakara Hedge, executive director of OBC.
But lowering of interest rates is not the only way of enhancing home loan portfolio. Banks such as IDBI Bank have adopted new ways. The Mumbai-based bank, which has turned out to be the fourth largest home loan distributor in the present financial year so far, is utilising property expos as a tool to attract borrowers.
“We would be organising 17 property expos in all and hope to sanction close to Rs 2,500 crore of home loans from these venues alone by the middle of December,” said C S Jain, head of personal banking at IDBI Bank.
However, borrowers may not be as eager as the lenders. The offtake of housing loans would depend on the movement of property prices. Property prices in many parts of the country have been hardening, which may create uncertainty among buyers. According to Residex, an index of property prices across 15 cities prepared by National Housing Bank, a wholly-owned subsidiary of the Reserve Bank of India, property prices have firmed up in at least nine of those 15 cities.
According to the index, prices of residential properties in Mumbai have increased by 5.98 per cent between December 2008 and June 2009, and by 26 per cent and 13 per cent in Chennai and Kolkata respectively. Prices increased by 27 per cent in Ahmedabad and a whopping 36 per cent in Faridabad in Delhi's neighbourhood. Other major cities that witnessed price rise are Lucknow, Pune, Surat and Patna.
The lenders are banking on the last of three basic human needs of roti, kapada aur makaan (food, cloth and housing) to keep the cash registers ringing.
Brigade plans budget housingBrigade plans budget housing
Brigade group, Bangalore-based real estate developer,
is testing the waters of affordable housing with ‘Brigade Value Homes’
which it plans to launch in Bangalore. The company is looking
to invest Rs 2,000 crore on building compact residential properties in the next four years.
The company will build low-cost residential projects on Kanakapura Road,
Devanahalli Town, Mysore Road and K R Puram in Whitefield,
totalling 10,000 homes with a base price in the range of Rs 10-26 lakh,
of which 2,500 units will be available for registration in the first phase.
A one BHK flat of 500-550 sq feet costs around Rs 10 lakh to Rs 13 lakh.
Two BHK with 850-900 sq feet is priced in the range of Rs 17 lakh to
Rs 21 lakh while three BHK with 1,050-1,100 sq feet is priced
at Rs 21 lakh to Rs 26 lakh. The company plans to launch the
properties in the next 6-12 months.
“To a certain extent, the compact home project is
a way to ascertain the demand for a specific location or
a type of apartment. There is a huge demand at the bottom
of the pyramid. With urban population expected to double
in the next few years, we expect the demand for affordable
housing to go up,” said M R Jaishankar, chairman
and managing director, Brigade Group.
Funding for the new initiative will come through 1ô3rd each
from internal accruals, customer advances and institutional funds
. While the company has no plans to set up a subsidiary for low-cost
housing, the Devanahalli project will be operated as an SPV with
BCV Developers, a joint venture of Brigade Group and Classic
Valmark. Other cities being looked at for future expansion under the
affordable housing initiative are Mysore, Mangalore and Chennai.
At Mangalore, the company has soft launched a residential project
‘Brigade Sparkle’ which will offer 230 units priced
between Rs 18 lakh and Rs 25 lakh.
The Brigade group, with interests in residential, commercial
property as well as hospitality is developing projects in these
sectors and is expecting to get approvals for nearly 12-15 projects
by March 2010. This includes projects in Hyderabad, retail property
and business hotel in Chennai and SEZs in Mangalore and Kochi.
It is developing close to 35 million sq feet presently and is looking
to develop 12 million sq feet in the coming months.
Early this year, the company had spoken about diluting the stake
of its wholly-owned susidiary, Brigade Hospitality Services (BHSL)
for raising capital. Jaishankar said JP Morgan had been mandated
for the purpose and that the company could look at a dilution
of 25-30 per cent by the 1st quarter of 2010.
For projects in its hospitality sector, the company may
look to raise Rs 300 crore to Rs 500 crore.
is testing the waters of affordable housing with ‘Brigade Value Homes’
which it plans to launch in Bangalore. The company is looking
to invest Rs 2,000 crore on building compact residential properties in the next four years.
The company will build low-cost residential projects on Kanakapura Road,
Devanahalli Town, Mysore Road and K R Puram in Whitefield,
totalling 10,000 homes with a base price in the range of Rs 10-26 lakh,
of which 2,500 units will be available for registration in the first phase.
A one BHK flat of 500-550 sq feet costs around Rs 10 lakh to Rs 13 lakh.
Two BHK with 850-900 sq feet is priced in the range of Rs 17 lakh to
Rs 21 lakh while three BHK with 1,050-1,100 sq feet is priced
at Rs 21 lakh to Rs 26 lakh. The company plans to launch the
properties in the next 6-12 months.
“To a certain extent, the compact home project is
a way to ascertain the demand for a specific location or
a type of apartment. There is a huge demand at the bottom
of the pyramid. With urban population expected to double
in the next few years, we expect the demand for affordable
housing to go up,” said M R Jaishankar, chairman
and managing director, Brigade Group.
Funding for the new initiative will come through 1ô3rd each
from internal accruals, customer advances and institutional funds
. While the company has no plans to set up a subsidiary for low-cost
housing, the Devanahalli project will be operated as an SPV with
BCV Developers, a joint venture of Brigade Group and Classic
Valmark. Other cities being looked at for future expansion under the
affordable housing initiative are Mysore, Mangalore and Chennai.
At Mangalore, the company has soft launched a residential project
‘Brigade Sparkle’ which will offer 230 units priced
between Rs 18 lakh and Rs 25 lakh.
The Brigade group, with interests in residential, commercial
property as well as hospitality is developing projects in these
sectors and is expecting to get approvals for nearly 12-15 projects
by March 2010. This includes projects in Hyderabad, retail property
and business hotel in Chennai and SEZs in Mangalore and Kochi.
It is developing close to 35 million sq feet presently and is looking
to develop 12 million sq feet in the coming months.
Early this year, the company had spoken about diluting the stake
of its wholly-owned susidiary, Brigade Hospitality Services (BHSL)
for raising capital. Jaishankar said JP Morgan had been mandated
for the purpose and that the company could look at a dilution
of 25-30 per cent by the 1st quarter of 2010.
For projects in its hospitality sector, the company may
look to raise Rs 300 crore to Rs 500 crore.
Don’t get carried away by UK property revival
Commercial property markets are rebounding as investors seek out higher-yielding assets
But there’s a limit to how far the market can recover while bank lending remains
tight and vacancy rates high. The recovery will be uneven, and prone to setback.
It’s easy to see why bankers and estate agents are talking about a UK commercial
property revival. The recent sale of HSBC’s head office and planned
disposal of half the portfolio owned by Simon Halabi, the Syrian billionaire,
shows investors are buying again. Meanwhile, banks are willing to lend.
Commercial property indexes are showing a 3.2 percent return since August,
while the derivatives market is predicting a flat return for the year.
Yet this revival has less to do with the property market itself than
record low interest rates, which have prompted investors to seek
out higher-yielding assets. This has fuelled demand for prime
properties, such as city offices with long-term leases negotiated
before the crisis. Elsewhere, however, the picture is less rosy.
Even as the economy recovers, rents are still falling: they fell 0.5 percent
in October. Vacancy rates are still at a record high, according to
Investment Property Databank (IPD).
The improvement in funding markets is also patchy.
Many banks are still reluctant to make large loans,
and they will rarely extend credit for more than 60 percent
of a property’s value. Getting loans for weaker properties,
or those with shorter lease terms, is tough.
Meanwhile, the market for commercial mortgage-backed
securities remains broken. This means banks can’t free up
capital committed to the property sector by repackaging loans.
Not all buyers need to borrow — South Korea’s National Pension
Service bought HSBC’s headquarters in London without any debt.
But the constrained bank market means not all overleveraged
borrowers will be able to refinance their loans as they mature.
That means more defaults and distressed asset sales,
which will weigh on prices.
These inherent weaknesses leave the property recovery
looking uneven and vulnerable to a double-dip.
As long as interest rates stay low, cash-rich investors
will push up prices for high-quality properties with locked-in
long-term leases. Lower-quality assets will continue to struggle.
During the last property downturn in the 1990s, prices bounced
back from the trough for a year until the harsh reality of falling
rents sunk in. The result was that the market drifted sideways
and values fell again, eroding returns. It’s too early to
bet against history repeating itself.
But there’s a limit to how far the market can recover while bank lending remains
tight and vacancy rates high. The recovery will be uneven, and prone to setback.
It’s easy to see why bankers and estate agents are talking about a UK commercial
property revival. The recent sale of HSBC’s head office and planned
disposal of half the portfolio owned by Simon Halabi, the Syrian billionaire,
shows investors are buying again. Meanwhile, banks are willing to lend.
Commercial property indexes are showing a 3.2 percent return since August,
while the derivatives market is predicting a flat return for the year.
Yet this revival has less to do with the property market itself than
record low interest rates, which have prompted investors to seek
out higher-yielding assets. This has fuelled demand for prime
properties, such as city offices with long-term leases negotiated
before the crisis. Elsewhere, however, the picture is less rosy.
Even as the economy recovers, rents are still falling: they fell 0.5 percent
in October. Vacancy rates are still at a record high, according to
Investment Property Databank (IPD).
The improvement in funding markets is also patchy.
Many banks are still reluctant to make large loans,
and they will rarely extend credit for more than 60 percent
of a property’s value. Getting loans for weaker properties,
or those with shorter lease terms, is tough.
Meanwhile, the market for commercial mortgage-backed
securities remains broken. This means banks can’t free up
capital committed to the property sector by repackaging loans.
Not all buyers need to borrow — South Korea’s National Pension
Service bought HSBC’s headquarters in London without any debt.
But the constrained bank market means not all overleveraged
borrowers will be able to refinance their loans as they mature.
That means more defaults and distressed asset sales,
which will weigh on prices.
These inherent weaknesses leave the property recovery
looking uneven and vulnerable to a double-dip.
As long as interest rates stay low, cash-rich investors
will push up prices for high-quality properties with locked-in
long-term leases. Lower-quality assets will continue to struggle.
During the last property downturn in the 1990s, prices bounced
back from the trough for a year until the harsh reality of falling
rents sunk in. The result was that the market drifted sideways
and values fell again, eroding returns. It’s too early to
bet against history repeating itself.
Hong Kong Real Estate Expected To Continue Strong Performance
After bottoming out in the second half of 2008, residential
property prices in Hong Kong are riding a euphoric wave.
A strong increase in buyers from mainland China, two government
stimulus packages and low interest rates, are reasons why the rise
in prices is expected to continue — at least for a little while longer.
Hong Kong’s housing market was seriously affected by the global financial crisis, but after falling 17% (18% in real terms) from June to December 2008, Hong Kong’s residential price index rebounded and rose by 20% (21% in real terms) from last year’s bottom to August 2009, according to the Ratings and Valuation Department (RVD)
A massive influx of buyers from mainland China has been a partial cause. The Chinese stimulus package of November 2008 boosted liquidity, and cash-rich Chinese, facing restrictions on bringing out capital from China, bought properties in Hong Kong.
Hong Kong Island, Kowloon and the New Territories all saw strong price increases in the first two quarters of 2009. The overall residential price index in Hong Kong rose 8.3% (8.4% in real terms) in Q2 2009.
Heavy intervention by the HK government helped. There were two stimulus packages, in October 2008, and May 2009, which maintained buyer confidence and encouraged continued spending. The government likewise implemented measures to strengthen the financial sector and ensure liquidity.
Record-low completions in house construction by private firms in 2008 arguably also contributed to the rise of house prices.
Why Hong Kong’s house prices are hard to predict
Analysis of Hong Kong’s residential property market is difficult due to four interlinked features:
- Hong Kong’s house prices are among the most volatile in the world.
- With a land area of 1,104 sq. km., land supply in Hong Kong is extremely limited and can be released by the government at will.
- The market is dominated by few major real estate developers.
- The public housing sector is one of the biggest in the world.
Then chief executive Tung Chee-hwa pledged in 1997 to construct 250,000 units of residential properties in the next ten years, despite the housing slump. This contributed to a further drop in house prices. From its peak in 1997, residential property prices fell by 66.1% (61.8% in real terms) in Mid-2003.
In July 2003, house prices began to pick up again. Residential property prices rose until May 2005, rising 63% (62% in real terms). The housing market then stalled in the first half of 2006, before increasing 32.4% (23.5% in real terms) from August 2006 to August 2008.
It is difficult to predict future house price changes. Nonetheless, according to property consultants Colliers International, Hong Kong house prices are expected to rise another 5-10% in the short term.
Influx of Chinese buyers
The Chinese government implemented a stimulus package amounting to CNY4 trillion (USD585 billion) in November 2008, reviving the Chinese housing market, and prompting a surge of mainland buying in Hong Kong. As much as 40% of new-home sales buyers now come from mainland China, according to the Wall Street Journal. Newspaper reports of luxury properties sold to mainland Chinese at staggering prices are now commonplace.
Although there are no signs of the mainland monetary tightening yet, demand for Hong Kong properties would surely drop, if the mainland suddenly reversed its loose policies.
The stimulus package helped
In December 2008 the Hong Kong government announced a stimulus package focused on providing loan guarantees and additional employment.
- The government would provide up to HKD100 billion (USD12.8 billion) in loan guarantees for enterprises, and allow all firms to apply for the loan guarantee.
- The loan ceiling for each company was raised to HKD6 million, from HKD1 million.
- Two months’ worth of rent for public housing will be paid by the government.
- Tenants paying additional rent will only pay the basic rent.
- For non-elderly tenants, the government will pay two-thirds of the rent.
Transactions rose 10.6% from January to August 2009, as compared with the same period last year. This followed a 22.2% drop in sales transactions in 2008.
Support for the mortgage market helped
Following the global financial crisis, the government immediately implemented liquid-enhancing measures to protect Hong
Kong’s financial sector:
- In September 2008 to March 2009, the Hong Kong Monetary Authority (HKMA) increased the available access to liquidity assistance to banks, including longer borrowings from the discount window and foreign exchange swaps.
- In October 2008, the Financial Secretary established the Contingent Bank Capital Facility (CBCF) to make available additional capital to banks. The CBCF will be in effect until the end of 2010.
- In November 2008, the HKMA refined the September 2008 measures, increasing the maturity time of the debts in the discount window from one to three months.
Growth in housing loans is expected to slow in 2009, because the HKMA has now lowered the loan to value ratios (LTV) of housing loans to 60% for loans valued at least HKD20 million. For loans less than HKD20 million, the 70% ratio remains, but the loan amount is capped at HKD12 million.
The ratio of housing loans to GDP rose to 35.4% in 2008, the first time the size of the mortgage market has grown in four years. Yet most buyers continue to pay in cash during the pre-selling stage of the residential property development, according to major newspaper The Standard.
The Hong Kong Mortgage Corporation (HKMC) was created in 1997 to facilitate the increase in mortgages in Hong Kong. The HKMC achieves its goals by being a guarantor of mortgage loans, and by issuing its own loans.
Outstanding loans from the HKMC grew by 31.1% to HKD30 (USD3.8) billion in December 2008 from the previous year. To stimulate growth in borrowing in the mortgage market, the HKMC issued in October 2009 a Fixed Adjustable Rate Mortgage program. With the application period lasting until December 2009, borrowers can lock-in a predetermined interest rate within an agreed lock-in period.
Low interest rates for borrowers
The Hong Kong best lending rate, the basis for mortgage interest rates, is computed based on the US Federal Funds rate and the average of the interbank interest rate. To ensure liquidity in the economy, the HKMA implemented measures that affected the best lending rate:
- From October 2008 to March 2009, the best lending rate would be set at 50 basis points above the US Federal Funds rate, while the interbank interest rate section of the computation is removed.
- From March 2009 onwards, the interbank interest rate section of the best lending rate computation was reinstated.
With the drop in the Hong Kong best interest rate, the interest rates of major banks are as low as 3.25% below the best lending rate, according to Bloomberg. This benefits most borrowers, as more than 90% of housing loans in Hong Kong are variable rate.
Big public housing sector
Hong Kong has one of the largest public housing sectors in the world. As of 2009, 47.1% of the total population or around 3.3 million people live in public housing. While 29.1% of Hong Kong’s population live in rental flats, 18.1% live in private flats subsidized by the government.
Public housing in Hong Kong began as early as the 1950s as a way to provide citizens affected by wars and calamities temporary housing. In the 1970s, the government changed its policy to provide permanent public housing.
The Hong Kong Housing Authority (HKHA) offers three ways to assist low-income families to purchase homes:
- Home Ownership Scheme (HOS): HOS flats are subsidized by the government. Selling under the HOS scheme was temporarily stopped from 2003 to 2006, and was resumed in 2007.
- Tenants Purchase Scheme (TPS): The scheme offered those in public rental flats to buy the properties at below market cost. However, selling under the TPS scheme was halted in 2005.
- Home Assistance Loan Scheme (HALS): Since 2003, the government offered low-income families interest-free loans payable up to 20 years. After government evaluation, the HALS was stopped in 2004, and the HKMA only maintains the payments of the loans.
Since 2002, the Government (which owns all land in Hong Kong) has more tightly limited the supply of new land for housing purposes. Housing completions have been falling. In 2008, completed dwellings decreased by 16.1% to 8,800 units, the first time in over two decades that completed properties in a year dropped below 10,000 units. The tight supply of new houses arguably contributes to the rise in property prices.
The fall in completed properties prompted the government in October 2009 to release an additional 1,000 units of old buildings for re-development. Real estate developers would apply for the usage of these buildings. Around 14,700 new residential units are expected in 2009.
Although completed dwellings dropped in 2008, actual production of public housing by the HKMA increased by 38.8% to 19,000 units. This is the second year of increase in the actual production of public housing, after the HKMA resumed the selling if HOS flats in 2007.
Poor yields in Hong Kong
In 2004 the government amended the Landlord and Tenant (Consolidation) Ordinance, effectively making Hong Kong’s landlord and tenant law pro-landlord. Tenants no longer have the right to renew at prevailing market rates, and it is easier for the landlord to prematurely terminate the tenancy agreement.
Though residential prices began to rise in January 2009, rents only began to increase in May. While house prices increased by 17.9% from January 2009 to May 2009, rents only increased by 7.8% in the same period.
The slow increase in rents caused average rental yields to fall to 3% in April 2009, according to Global Property Guide research. Residential properties in the New Territories generate the highest average yield of 3.7%. Properties in The Peak, Hong Kong’s most prestigious neighborhood, generate an average of 2.1% yield.
By Global Property Guide standards, yields are poor in Hong Kong. Yields issued by the RVD are comparable to Global Property Guide figures. But since Hong Kong yields have been low for the past fifteen years, the investment risks may actually be lower than they appear.
Hong Kong Apartment Gross Rental Yields (Ave. Jan-Sept 2009)
PROPERTY CLASS YIELDS
Class A - (40 sq. m. or less) 4.4%
Class B - (40 - 69.9 sq. m.) 3.6.%
Class C - (70 - 99.9 sq. m.) 3.2%
Class D - (100 - 159.9 sq. m.) 2.9%
Class E - (More than 160 sq. m.) 2.6%
Source: RVD
Pump-primed out of recession
After four consecutive quarters of contraction, the economy grew by 3.3% in Q2 2009, lifting Hong Kong out of recession. Overall, the economy is expected to shrink by 2% in 2009, but to bounce back in 2010 with 5% growth, according to the IMF.
The fall in exports and imports slowed to 12.8% and 12.7% in Q2 2009 from the previous year, after sliding by 22.7% and 21.4% in Q1 2009.
The decline in private consumption also slowed to 1% in Q2 2009 from the previous quarter, indicating the gradual return of consumer confidence. This followed the 6% drop in private consumption in Q1 2009.
"Price pressures should remain muted and, given our current outlook for global commodity prices, consumer price inflation should end 2010 close to zero," said the International Monetary Fund in its report.
Deflation in Hong Kong began in June 2009 with a 0.9% contraction in prices. In August 2009, the fall in prices accelerated to 1.6%.
Loan against property vs personal loan
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| What purposes can I take a loan against property for? Loan against Property can be taken for following purposes: 1. Expanding your business 2. Getting your son/daughter married 3. Sending your son/daughter for higher studies abroad 4. Funding your dream vacation 5. Funding medical treatments What kind of properties can I mortgage for a loan? You can normally take a loan against your self-occupied or rented residential property. This could be a house or even a piece of land. What is the eligibility criteria to get a loan against property? This criteria will vary from one bank to another. However, from all the host of factors, the common factors that all banks look at are: 1. Your income, savings, debt obligations 2. Cost/value of the property mortgaged 3. Your repayment track record for other loans, credit cards etc. What are the normal interest rates and tenure for repayment offered for a loan against property? Interest rates on loan against property range from 12% -15.75% and the loan tenure can be up to 15 years. How is a loan against property different from a personal loan?
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What documents are required for applying for a loan against property? Most banks and financial institutions typically require the following documents. However, this list may vary from bank to bank.
A loan against property is one of the best ways to raise money. The only disadvantage of such a loan is that if the borrower is not able to pay the loan fully, the bank or the financial institution can take possession of the mortgaged property. Base your decision on your repaying capabilities. |
Banks bet on home loan disbursals
Aparna Iyer & T Bijoy Idicheriah /
Mumbai: At a time when sluggish credit growth is threatening to
stunt the evident overall recovery, and corporate credit is also not
yet taking off, banks are making a last ditch effort to expand their
loan portfolio through home loans.
With an improvement in employment prospects and income turning
steady after the lull in 2008 and early 2009, demand for houses is
growing gradually.Festive season home loan schemes just added
the much-needed fuel to this recovery.
"There has been some pick-up in retail demand following the
introduction of festival home and car loans at attractive interest
rates which is improving the credit offtake scenario," said Albert
Tauro, chairman and managing director, Vijaya Bank.
Big lenders such as State Bank of India and ICICI Bank are
betting on growth in retail loans, especially home loans, to
prop up their overall credit expansion. For most players,
home loans form at least 6-10% of their total credit portfolio.
Year-on-year growth in banks' total loans has slowed to
single digit and was just 9.5% as of October 30 compared
with 28.4% a year ago, according to the latest RBI data.
As of August 28, outstanding housing loans of banks were
Rs 2.85 lakh crore, or 10.8% of total loans, the RBI's
macroeconomic report showed.
In the first eight months of 2009-10, home loans had
grown 4.5%. Most banks witnessed at least 20-25% growth
in their home loan book in July-September, and expect
to see a similar trend in the coming quarters too.
Last week, Bank of Baroda chairman M D Mallya had said
the bank's home loans have grown 25%. Union Bank of India's
home loan book has grown 24-25%, according to S L Bansal,
general manager -- retail banking.
Housing Development Finance Corporation, the country's
largest home loan lender, is already witnessing a rise in
loan applications, according to joint managing director
Renu Karnad.
"The segment where we are seeing good demand is in the price
range of Rs 30-50 lakh in metros and bigger towns and
around Rs 20-25 lakh in smaller towns," Karnad said.
With loan applications rising, bankers expect to turn these
into disbursements in the coming months, thereby giving
a fillip to the overall disbursal of banks. Banks are also
cashing in on the rising demand by extending their special
home loan schemes that offer lower fixed rates.
State Bank of India recently extended its special 8% home
loan scheme to up to March 31. Every month, SBI is
witnessing disbursal of Rs 2,000 crore,
chairman O P Bhatt had said on October 31.
Following SBI, Corporation Bank extended its scheme
to March 31 while Axis Bank also announced a special
scheme through which the bank will dole out loans
at 8%. Union Bank of India has a scheme wherein
borrowers will have to pay 8.5% fixed rate for the
first three years.
However, a sharp rise in property prices could pose
a risk to the rise in home loans.
HDFC's managing director Keki Mistry feels property
prices have to be reasonable for the pick-up to turn
into a concrete boom. "People do not buy houses
just based on interest rates," Mistry said on Monday.
Property prices have already started inching up in
major metropolitan cities, and the rise has been
sharper in Mumbai and New Delhi. "We are seeing
some pick-up in demand for home loans. But for
this demand to sustain, builders will have to maintain
prices at current levels, else demand will get diluted,"
Punjab National Bank's chairman and managing director K R Kamath said.
Nevertheless, some bankers said the rise in property
prices in most areas is not sharp, and may not dampen
demand.Another risk is the expected turn in interest rate
cycle as the Reserve Bank of India readies a strategy to
withdraw the accommodativepolicy.
But some bankers noted that monetary policy
withdrawal could have an impact on banks' lending
rates only by March-end.
"I don't think it (rates) will go up much. If rates go up,
it will be mostly in February or March. And I don't think
property prices will go up in a big way. The government
is investing in affordable housing also," said Bansal of
Union Bank of India. Rising home prices may pinch buyers'
pockets but affordable home loans seem set for a long stay.
There are fears that a rapid home loan expansion,
amid a potential rise in housing prices, may also push
up banks' non-performing assets (NPAs).For instance,
State Bank of India witnessed a sharp rise in its net NPAs
in July-September, driven mainly by its retail portfolio.
The bank's net NPAs rose to 1.73% by September
from 1.55% as of June 30.
Demand for home loans is expected to remain strong
in coming quarters.What bankers need to watch out for
is maintaining asset quality as they give a home loan
push to credit offtake.
Mumbai: At a time when sluggish credit growth is threatening to
stunt the evident overall recovery, and corporate credit is also not
yet taking off, banks are making a last ditch effort to expand their
loan portfolio through home loans.
With an improvement in employment prospects and income turning
steady after the lull in 2008 and early 2009, demand for houses is
growing gradually.Festive season home loan schemes just added
the much-needed fuel to this recovery.
"There has been some pick-up in retail demand following the
introduction of festival home and car loans at attractive interest
rates which is improving the credit offtake scenario," said Albert
Tauro, chairman and managing director, Vijaya Bank.
Big lenders such as State Bank of India and ICICI Bank are
betting on growth in retail loans, especially home loans, to
prop up their overall credit expansion. For most players,
home loans form at least 6-10% of their total credit portfolio.
Year-on-year growth in banks' total loans has slowed to
single digit and was just 9.5% as of October 30 compared
with 28.4% a year ago, according to the latest RBI data.
As of August 28, outstanding housing loans of banks were
Rs 2.85 lakh crore, or 10.8% of total loans, the RBI's
macroeconomic report showed.
In the first eight months of 2009-10, home loans had
grown 4.5%. Most banks witnessed at least 20-25% growth
in their home loan book in July-September, and expect
to see a similar trend in the coming quarters too.
Last week, Bank of Baroda chairman M D Mallya had said
the bank's home loans have grown 25%. Union Bank of India's
home loan book has grown 24-25%, according to S L Bansal,
general manager -- retail banking.
Housing Development Finance Corporation, the country's
largest home loan lender, is already witnessing a rise in
loan applications, according to joint managing director
Renu Karnad.
"The segment where we are seeing good demand is in the price
range of Rs 30-50 lakh in metros and bigger towns and
around Rs 20-25 lakh in smaller towns," Karnad said.
With loan applications rising, bankers expect to turn these
into disbursements in the coming months, thereby giving
a fillip to the overall disbursal of banks. Banks are also
cashing in on the rising demand by extending their special
home loan schemes that offer lower fixed rates.
State Bank of India recently extended its special 8% home
loan scheme to up to March 31. Every month, SBI is
witnessing disbursal of Rs 2,000 crore,
chairman O P Bhatt had said on October 31.
Following SBI, Corporation Bank extended its scheme
to March 31 while Axis Bank also announced a special
scheme through which the bank will dole out loans
at 8%. Union Bank of India has a scheme wherein
borrowers will have to pay 8.5% fixed rate for the
first three years.
However, a sharp rise in property prices could pose
a risk to the rise in home loans.
HDFC's managing director Keki Mistry feels property
prices have to be reasonable for the pick-up to turn
into a concrete boom. "People do not buy houses
just based on interest rates," Mistry said on Monday.
Property prices have already started inching up in
major metropolitan cities, and the rise has been
sharper in Mumbai and New Delhi. "We are seeing
some pick-up in demand for home loans. But for
this demand to sustain, builders will have to maintain
prices at current levels, else demand will get diluted,"
Punjab National Bank's chairman and managing director K R Kamath said.
Nevertheless, some bankers said the rise in property
prices in most areas is not sharp, and may not dampen
demand.Another risk is the expected turn in interest rate
cycle as the Reserve Bank of India readies a strategy to
withdraw the accommodativepolicy.
But some bankers noted that monetary policy
withdrawal could have an impact on banks' lending
rates only by March-end.
"I don't think it (rates) will go up much. If rates go up,
it will be mostly in February or March. And I don't think
property prices will go up in a big way. The government
is investing in affordable housing also," said Bansal of
Union Bank of India. Rising home prices may pinch buyers'
pockets but affordable home loans seem set for a long stay.
There are fears that a rapid home loan expansion,
amid a potential rise in housing prices, may also push
up banks' non-performing assets (NPAs).For instance,
State Bank of India witnessed a sharp rise in its net NPAs
in July-September, driven mainly by its retail portfolio.
The bank's net NPAs rose to 1.73% by September
from 1.55% as of June 30.
Demand for home loans is expected to remain strong
in coming quarters.What bankers need to watch out for
is maintaining asset quality as they give a home loan
push to credit offtake.
Wednesday, November 18, 2009
Mahindra Lifespaces launches a premium residential community at Mahindra World City, Chennai
Mahindra Lifespace Developers today announced the launch of “Aqualily”,
a premium residential community being developed within the Mahindra World City,
Chennai’s most evolved and integrated city.
Mahindra Lifespace Developers Limited (MLDL)
is the real estate and infrastructure development arm
of the $6.3 billion Mahindra Group.
Model rendition of an Aqualily property
“Aqualily” will be a perfect blend of villas, twin homes and luxury
apartments nestled on a pristine lake with floor areas ranging
from 1500 to 4000 sq.ft. Planned as a gated community with
large residential units, lush green open spaces, wide roads,
walkways and vibrant community interaction points, the
project is set in a pollution free environment.
Two club houses equipped with all the modern amenities,
a large green lung space and several play areas provide
the confluence points for the residents.
The project is being developed by Mahindra Residential
Developers Ltd., a subsidiary of Mahindra Lifespace
Developers Ltd. and Arch Capital, an Ayala Group company.
Mr. Arun Nanda, Executive Director, M&M Ltd. and
Vice-Chairman, Mahindra Lifespaces Developers Ltd
said, “We envisioned Mahindra World City as a complete
ecosystem where the work, living and learning spaces
would coexist to offer an enhanced quality of life to its citizens.
We have achieved significant milestones in this pursuit through
creating work spaces which have world class corporates like BMW,
Infosys, Wipro; and lifestyle amenities and facilities like the Mahindra
World School, Apollo Clinic; as well as enhanced bus and train services.
Aqualily represents a significant endeavour in offering international living
in a picturesque environment. The local knowledge and trust of Mahindra
Lifespaces and the international experience of the Ayala group will ensure
that Aqualily offers a truly perfect, nature friendly living environment.”
Mahindra Lifespace Developers’ current projects include
Mahindra Eminente at Goregaon, Mumbai, Mahindra Splendour
at Bhandup, Mumbai, Mahindra Royale, Pune, Mahindra Chloris,
Faridabad and Sylvan County at Mahindra World City, Chennai.
The Company’s sales amounted to a sales
value of Rs. 102 crores for the quarter and Rs 152 crores
for the H1 F10 across its projects.
About Mahindra World City, Chennai
Mahindra World City is an award-winning, planned
business city, designed on a work-live-learn-play
format and spread over 1500 acres. The city has
been conceived as a mixed use community with zones
for business and lifestyle. The Business Zone provides
modern working spaces with state-of-the-art plug-n-play infrastructure.
The Business Zone comprises of Special Economic Zones (SEZ) for
companies looking at catering to the global markets primarily through
exports and a Domestic Tariff Area (DTA) for companies targeting the
domestic market. The Lifestyle Zone, located in close proximity to the
Business Zone will offer residential units, schools, medical centers,
retail malls and recreation and leisure facilities amidst wide open
green spaces and a clean, healthy environment.
Mahindra World City, Chennai is currently home to leading
international and Indian companies like BMW, Cap Gemini, Infosys,
Mindtree, Renault Nissan, Timken, TVS Group and Wipro among others.
The project has attracted a cumulative investment of over Rs. 2500 crores
and will see a total investment of over Rs 7500 crores when fully developed.
The Lifestyle Zone of Mahindra World City houses The Canopy,
a commercial complex with banking, food and beverage facilities,
an Apollo Clinic among other retail and leisure facilities and the Mahindra
World School, a world class educational institution affiliated to the CBSE.
Mahindra World City is currently home to 15,000 employees of the
companies based at the location, which strength is expected to
cross 50,000 in the next 4 to 5 years. The new station at Paranur,
completely renovated and refurbished by Mahindra World City in
partnership with Southern Railways, acts as a convenient conduit
for employee travel today.
Awards Won by Mahindra World City
American Society of Landscape Architects Honours Award for
Master Planning for Residential Master Plan of MWC done
by HOK Planning Group based out of St. Louis, USA. Citiscape
Singapore Citation for most commendable mixed use Community
development for Mahindra World City.
About Mahindra Lifespace Developers Ltd
Mahindra Lifespace Developers Ltd (previously known as
Mahindra Gesco Developers Ltd) has been in the forefront
of Urban Development in the country.
A part of the US $ 6.3 billion Mahindra Group,
the company enjoys a reputation of being the pioneer in
the development of integrated business cities and delivering
quality living spaces that not only offer its customers healthy
living but also the comfort of fair and transparent dealings backed
by the trust and credibility of the Mahindra Group.
The Company has developed premium residential and
commercial properties in Mumbai, Pune, Delhi, Chennai
and the Mahindra World Cities at Chennai and Jaipur.
a premium residential community being developed within the Mahindra World City,
Chennai’s most evolved and integrated city.
Mahindra Lifespace Developers Limited (MLDL)
is the real estate and infrastructure development arm
of the $6.3 billion Mahindra Group.
Model rendition of an Aqualily property
“Aqualily” will be a perfect blend of villas, twin homes and luxury
apartments nestled on a pristine lake with floor areas ranging
from 1500 to 4000 sq.ft. Planned as a gated community with
large residential units, lush green open spaces, wide roads,
walkways and vibrant community interaction points, the
project is set in a pollution free environment.
Two club houses equipped with all the modern amenities,
a large green lung space and several play areas provide
the confluence points for the residents.
The project is being developed by Mahindra Residential
Developers Ltd., a subsidiary of Mahindra Lifespace
Developers Ltd. and Arch Capital, an Ayala Group company.
Mr. Arun Nanda, Executive Director, M&M Ltd. and
Vice-Chairman, Mahindra Lifespaces Developers Ltd
said, “We envisioned Mahindra World City as a complete
ecosystem where the work, living and learning spaces
would coexist to offer an enhanced quality of life to its citizens.
We have achieved significant milestones in this pursuit through
creating work spaces which have world class corporates like BMW,
Infosys, Wipro; and lifestyle amenities and facilities like the Mahindra
World School, Apollo Clinic; as well as enhanced bus and train services.
Aqualily represents a significant endeavour in offering international living
in a picturesque environment. The local knowledge and trust of Mahindra
Lifespaces and the international experience of the Ayala group will ensure
that Aqualily offers a truly perfect, nature friendly living environment.”
Mahindra Lifespace Developers’ current projects include
Mahindra Eminente at Goregaon, Mumbai, Mahindra Splendour
at Bhandup, Mumbai, Mahindra Royale, Pune, Mahindra Chloris,
Faridabad and Sylvan County at Mahindra World City, Chennai.
The Company’s sales amounted to a sales
value of Rs. 102 crores for the quarter and Rs 152 crores
for the H1 F10 across its projects.
About Mahindra World City, Chennai
Mahindra World City is an award-winning, planned
business city, designed on a work-live-learn-play
format and spread over 1500 acres. The city has
been conceived as a mixed use community with zones
for business and lifestyle. The Business Zone provides
modern working spaces with state-of-the-art plug-n-play infrastructure.
The Business Zone comprises of Special Economic Zones (SEZ) for
companies looking at catering to the global markets primarily through
exports and a Domestic Tariff Area (DTA) for companies targeting the
domestic market. The Lifestyle Zone, located in close proximity to the
Business Zone will offer residential units, schools, medical centers,
retail malls and recreation and leisure facilities amidst wide open
green spaces and a clean, healthy environment.
Mahindra World City, Chennai is currently home to leading
international and Indian companies like BMW, Cap Gemini, Infosys,
Mindtree, Renault Nissan, Timken, TVS Group and Wipro among others.
The project has attracted a cumulative investment of over Rs. 2500 crores
and will see a total investment of over Rs 7500 crores when fully developed.
The Lifestyle Zone of Mahindra World City houses The Canopy,
a commercial complex with banking, food and beverage facilities,
an Apollo Clinic among other retail and leisure facilities and the Mahindra
World School, a world class educational institution affiliated to the CBSE.
Mahindra World City is currently home to 15,000 employees of the
companies based at the location, which strength is expected to
cross 50,000 in the next 4 to 5 years. The new station at Paranur,
completely renovated and refurbished by Mahindra World City in
partnership with Southern Railways, acts as a convenient conduit
for employee travel today.
Awards Won by Mahindra World City
American Society of Landscape Architects Honours Award for
Master Planning for Residential Master Plan of MWC done
by HOK Planning Group based out of St. Louis, USA. Citiscape
Singapore Citation for most commendable mixed use Community
development for Mahindra World City.
About Mahindra Lifespace Developers Ltd
Mahindra Lifespace Developers Ltd (previously known as
Mahindra Gesco Developers Ltd) has been in the forefront
of Urban Development in the country.
A part of the US $ 6.3 billion Mahindra Group,
the company enjoys a reputation of being the pioneer in
the development of integrated business cities and delivering
quality living spaces that not only offer its customers healthy
living but also the comfort of fair and transparent dealings backed
by the trust and credibility of the Mahindra Group.
The Company has developed premium residential and
commercial properties in Mumbai, Pune, Delhi, Chennai
and the Mahindra World Cities at Chennai and Jaipur.
Tuesday, November 17, 2009
FAQ on Housing Loan and Income tax benefit
Nov 17, 2009
Q-1 What are Income tax benefits of taking a housing loan under EMI Plan?
First Equated monthly instalment (EMI) amount is to be divided into
the principal and interest components. The repayment of principal
amount of the loan can be claimed as a deduction under section
80C up to a maximum amount of Rs.1 lakh. The repayment of the
interest portion of the EMI is also allowed as a deduction under
section 24 under the head “income from house property”
upto Rs.1,50,000/- for self occupied property and full amount
in case of let-out property.
Q-2 If I buy a house jointly with my wife and take a joint
home loan, Can we both claim income tax deduction?
Ans:-Yes, if your wife is working and has a separate source
of income, both of you can claim separate deductions in your
income tax returns.The repayment of principal amount of the
loan can be claimed as a deduction under section 80C up to a
maximum amount of Rs.1 lakh individually by each co-owner.
In cases where the house is owned by more than one person
and is also self-occupied by each co-owner, each co-owner
shall be entitled to the deduction individually on account
of interest on borrowed money up to a maximum amount
of Rs. 1.5 lakh. If the house is given on rent, there is no
restriction on this amount. Both co-owners can claim
deductions in the ratio of ownership.
Q-3 My husband and I have jointly taken a home loan.
He pays 75 percent of the EMI. What will be our individual tax benefits?
Ans: – As you have taken a joint home loan, both of you are
eligible for tax exemption for your share of the EMI paid.
For claiming income tax deduction, the EMI amount is divided
into the principal and interest components.
The repayment of the principal amount of loan is claimed
as a deduction under section 80C of the Income Tax Act
up to a maximum amount of Rs. 1lakh individually by each co-owner.
The repayment of the interest portion of the EMI is also
allowed as a deduction under section 24 of the Act,
which is given under the head “income from house property”.
In case you are living in the house for which home loan is taken,
both of you shall be entitled to deduction in the ratio (3:1)
on account of interest on borrowed money up to a maximum
of Rs. 1.5 lakh individually. If the house is given on rent,
there is no restriction on this amount and both co-owners
can claim deduction in the ratio of ownership- 3:1 in your case.
Q- I plan to buy a house by raising loans from friends and
relatives. Will I be eligible for tax benefit from all sources?
Ans: – Interest payment to friends and relatives can be
claimed u/s 24 but only against a certificate received
from them. In the absence of the certificate, you would
not be eligible for the deduction. The recipient of interest
income who issues the certificate is liable to pay tax on the
interest income that he receives. As far as the principal
payments are concerned, they would not qualify for tax
benefit as loans only from notified institutions and banks
are eligible for such deductions.
Q-1 What are Income tax benefits of taking a housing loan under EMI Plan?
First Equated monthly instalment (EMI) amount is to be divided into
the principal and interest components. The repayment of principal
amount of the loan can be claimed as a deduction under section
80C up to a maximum amount of Rs.1 lakh. The repayment of the
interest portion of the EMI is also allowed as a deduction under
section 24 under the head “income from house property”
upto Rs.1,50,000/- for self occupied property and full amount
in case of let-out property.
Q-2 If I buy a house jointly with my wife and take a joint
home loan, Can we both claim income tax deduction?
Ans:-Yes, if your wife is working and has a separate source
of income, both of you can claim separate deductions in your
income tax returns.The repayment of principal amount of the
loan can be claimed as a deduction under section 80C up to a
maximum amount of Rs.1 lakh individually by each co-owner.
In cases where the house is owned by more than one person
and is also self-occupied by each co-owner, each co-owner
shall be entitled to the deduction individually on account
of interest on borrowed money up to a maximum amount
of Rs. 1.5 lakh. If the house is given on rent, there is no
restriction on this amount. Both co-owners can claim
deductions in the ratio of ownership.
Q-3 My husband and I have jointly taken a home loan.
He pays 75 percent of the EMI. What will be our individual tax benefits?
Ans: – As you have taken a joint home loan, both of you are
eligible for tax exemption for your share of the EMI paid.
For claiming income tax deduction, the EMI amount is divided
into the principal and interest components.
The repayment of the principal amount of loan is claimed
as a deduction under section 80C of the Income Tax Act
up to a maximum amount of Rs. 1lakh individually by each co-owner.
The repayment of the interest portion of the EMI is also
allowed as a deduction under section 24 of the Act,
which is given under the head “income from house property”.
In case you are living in the house for which home loan is taken,
both of you shall be entitled to deduction in the ratio (3:1)
on account of interest on borrowed money up to a maximum
of Rs. 1.5 lakh individually. If the house is given on rent,
there is no restriction on this amount and both co-owners
can claim deduction in the ratio of ownership- 3:1 in your case.
Q- I plan to buy a house by raising loans from friends and
relatives. Will I be eligible for tax benefit from all sources?
Ans: – Interest payment to friends and relatives can be
claimed u/s 24 but only against a certificate received
from them. In the absence of the certificate, you would
not be eligible for the deduction. The recipient of interest
income who issues the certificate is liable to pay tax on the
interest income that he receives. As far as the principal
payments are concerned, they would not qualify for tax
benefit as loans only from notified institutions and banks
are eligible for such deductions.
TDR prices getting too hot for realtors
Mumbai: As real estate prices increase across the city,
the price of transfer of development rights (TDR),
too, has started reaching for the sky.
Going by TDR brokers, the increase has been particularly
noticeable in the western suburbs. TDR prices have
increased to Rs 2,700 per sq ft in Bandra to Santacruz,
and to Rs 2,500-2,600 per sq ft between Santacruz and Borivali.
The central suburbs aren’t far behind. TDR prices in Chembur,
too, are near Rs 2,700 per sq ft and in suburban areas like Mulund
to Bhandup, at around Rs 2,450-2,500 per sq ft.
“TDR is now selling at Rs 2,600 per sq ft,”
Sarang Wadhawan, managing director,
Housing Development and Infrastructure (HDIL),
said on the sidelines of the Ficci realty summit here.
At the end of the first quarter this fiscal, HDIL had started
selling TDR for Rs 2,100 per sq ft. In just four months,
prices are up 29%, Wadhawan said.
“Though TDR prices have been hiked so much,
there is no sale at all due to price hike. Earlier,
the developers didn’t have any liquidity to buy TDRs
when prices had fallen to as much as Rs 830 per sq ft.
Now, as projects are selling and prices have been hiked,
the TDR cartel is back,” a leading TDR broker said.
Last month, when DNA Money ran a survey, TDR prices
were found to be around Rs 2,545 for Bandra to Santracruz
and Rs 2,300-2,400 beyond Santacruz.
“If developers enter at such high levels, then project rates
are bound to go up and buyers would not have any option
but to pay. I don’t think at this time developers can shell
out or will shell out this much as they have burnt their fingers badly,”
an analyst tracking the sector said, preferring anonymity.
the price of transfer of development rights (TDR),
too, has started reaching for the sky.
Going by TDR brokers, the increase has been particularly
noticeable in the western suburbs. TDR prices have
increased to Rs 2,700 per sq ft in Bandra to Santacruz,
and to Rs 2,500-2,600 per sq ft between Santacruz and Borivali.
The central suburbs aren’t far behind. TDR prices in Chembur,
too, are near Rs 2,700 per sq ft and in suburban areas like Mulund
to Bhandup, at around Rs 2,450-2,500 per sq ft.
“TDR is now selling at Rs 2,600 per sq ft,”
Sarang Wadhawan, managing director,
Housing Development and Infrastructure (HDIL),
said on the sidelines of the Ficci realty summit here.
At the end of the first quarter this fiscal, HDIL had started
selling TDR for Rs 2,100 per sq ft. In just four months,
prices are up 29%, Wadhawan said.
“Though TDR prices have been hiked so much,
there is no sale at all due to price hike. Earlier,
the developers didn’t have any liquidity to buy TDRs
when prices had fallen to as much as Rs 830 per sq ft.
Now, as projects are selling and prices have been hiked,
the TDR cartel is back,” a leading TDR broker said.
Last month, when DNA Money ran a survey, TDR prices
were found to be around Rs 2,545 for Bandra to Santracruz
and Rs 2,300-2,400 beyond Santacruz.
“If developers enter at such high levels, then project rates
are bound to go up and buyers would not have any option
but to pay. I don’t think at this time developers can shell
out or will shell out this much as they have burnt their fingers badly,”
an analyst tracking the sector said, preferring anonymity.
Samira Pavilions: A high end projects of 187 villas at Alibag near Mumbai
Alibag is a dream destination for the city it’s closest to — Mumbai.
Ten minutes in a speed boat and you can hear birds instead of
speeding cars honking, long branches of old banyan trees sweep
the roads to welcome you to the idyllic, verdant world of Alibag.
A place, which has been attracting some very high-end real estate
development over the last few years. In fact, Alibag is fast becoming
the most fashionable address to have closest to Mumbai, since Goa
is more than a few hundred nautical miles away.
Samira Pavilions is one of these very high end projects of 187 villas,
with seven villas being designed by none other than Kolkata designer
Sabyasachi Mukherjee, two of which will be ready in Phase I, which
comprises 56 villas and the clubhouse and aims to be ready by December 2010.
The buyer who chooses to go for Sabyasachi’s design has the option of sitting
with him and designing along side with his preferences included, says
Mihir Nerurkar, executive director (projects) — Samira Habitats.
“It takes a lot to develop a project that is out of this world. We have
been trying to do that at Samira Habitats over the years,” says the young
ED whose company is investing close to Rs 200 crore in the project.
The villas come in options of a 2BHK of around 2,000 sq ft and 3BHK
of around 3,000 sq ft super built up area, both of which includes private
gardens and deck areas as well. Apart from elegant internal courtyards,
water bodies and external open decks, Samira Pavilions will offer ample
space to lounge in the project. The state-of-the-art club house and lavish
spa will only add to the luxury and opulence of this project, coupled by
the allure of a very popular location like Alibag.
At a price range of Rs 90 lakh and going up to Rs 5 crore,
the target audience is naturally, the CEO, MNC heads and the HNIs.
This is where the young Nerurkar is confident of the response to
the project. With 50% of his Phase I sold, he is sure that with project
partners like Knight Frank with their global reach and expertise
“will add much value to our fine living project.”
As for the logistics, Knight Frank handle both marketing and management
for the elegant duplex villas project. The project has a speed boat service and
also includes clubhouse, luxurious spa and various other amenities for its residents.
The last mile connect is really the key to the project as by introducing convenient
speed boat services, this project will be the first of its kind to bridge distances
by tapping the waterways and presenting a new dimension to lifestyle living.
In fact, a home in Alibag maybe closer from the heart of Mumbai than most suburbs!
Ten minutes in a speed boat and you can hear birds instead of
speeding cars honking, long branches of old banyan trees sweep
the roads to welcome you to the idyllic, verdant world of Alibag.
A place, which has been attracting some very high-end real estate
development over the last few years. In fact, Alibag is fast becoming
the most fashionable address to have closest to Mumbai, since Goa
is more than a few hundred nautical miles away.
Samira Pavilions is one of these very high end projects of 187 villas,
with seven villas being designed by none other than Kolkata designer
Sabyasachi Mukherjee, two of which will be ready in Phase I, which
comprises 56 villas and the clubhouse and aims to be ready by December 2010.
The buyer who chooses to go for Sabyasachi’s design has the option of sitting
with him and designing along side with his preferences included, says
Mihir Nerurkar, executive director (projects) — Samira Habitats.
“It takes a lot to develop a project that is out of this world. We have
been trying to do that at Samira Habitats over the years,” says the young
ED whose company is investing close to Rs 200 crore in the project.
The villas come in options of a 2BHK of around 2,000 sq ft and 3BHK
of around 3,000 sq ft super built up area, both of which includes private
gardens and deck areas as well. Apart from elegant internal courtyards,
water bodies and external open decks, Samira Pavilions will offer ample
space to lounge in the project. The state-of-the-art club house and lavish
spa will only add to the luxury and opulence of this project, coupled by
the allure of a very popular location like Alibag.
At a price range of Rs 90 lakh and going up to Rs 5 crore,
the target audience is naturally, the CEO, MNC heads and the HNIs.
This is where the young Nerurkar is confident of the response to
the project. With 50% of his Phase I sold, he is sure that with project
partners like Knight Frank with their global reach and expertise
“will add much value to our fine living project.”
As for the logistics, Knight Frank handle both marketing and management
for the elegant duplex villas project. The project has a speed boat service and
also includes clubhouse, luxurious spa and various other amenities for its residents.
The last mile connect is really the key to the project as by introducing convenient
speed boat services, this project will be the first of its kind to bridge distances
by tapping the waterways and presenting a new dimension to lifestyle living.
In fact, a home in Alibag maybe closer from the heart of Mumbai than most suburbs!
DTC Plans To Come Up With Commercial Complexes
The Delhi Transport Corporation (DTC)
plans to develop commercial complexes like
luxury hotels and restaurants at its inter-state bus
terminals across the city.
The transport department of the city government
has already sent a proposal to the Union Urban
Development ministry seeking its permission to
use DTC bus terminals for commercial purposes.
“We have sought permission from the Central
Government to allow construction of commercial
complexes in the premises of DTC bus terminals,”
Delhi transport minister, Mr. Arvinder Singh Lovely said.
“The DTC has been incurring loss of nearly Rs560 crore annually.
So, we must find ways to improve the finances of the corporation,” he added.
According to the latest audit report, DTC’s accumulated
loss stood at over Rs 6,500 crore in March 2009.
plans to develop commercial complexes like
luxury hotels and restaurants at its inter-state bus
terminals across the city.
The transport department of the city government
has already sent a proposal to the Union Urban
Development ministry seeking its permission to
use DTC bus terminals for commercial purposes.
“We have sought permission from the Central
Government to allow construction of commercial
complexes in the premises of DTC bus terminals,”
Delhi transport minister, Mr. Arvinder Singh Lovely said.
“The DTC has been incurring loss of nearly Rs560 crore annually.
So, we must find ways to improve the finances of the corporation,” he added.
According to the latest audit report, DTC’s accumulated
loss stood at over Rs 6,500 crore in March 2009.
Godrej Properties Ltd launches its first residential project in Kolkata
Godrej Properties Ltd
GPL has launched its first residential project in Kolkata.
Named Godrej Prakriti, this project combines modern
apartments with beautiful landscaping and ample open spaces.
Located in Sodepur on Barrackpore Trunk Road, the project
has excellent rail and road connectivity and benefits from
the fully developed infrastructural facilities around it
such as schools, hospitals and educational institutions.
The company has tied up with Larsen & Toubro for the construction of the project.
This complex is set in over 24 acres of greenery and has natural water
bodies which the company plans to preserve.
Customers will have the options to choose from a range
of 2, 2 plus study, 3 BHK and Duplex apartments with
areas ranging from 900 – 1800sq.ft. Facilities such as
Community Centre, Club House, Swimming Pool, Library,
Gym etc. are also planned within the complex.
This is the third project by Godrej Properties in Kolkata.
The company is already developing two IT Parks,
Godrej Waterside and Godrej Genesis, in Sector V, Salt Lake.
Announcing the launch, Mr. Milind Korde, Managing Director,
Godrej Properties Ltd., said “We are excited about launching our
first residential project in Kolkata. Our endeavor is to offer homes
and not just living spaces. We intend maintaining a healthy balance
of natural elements within the complex so as to make
Godrej Prakriti an address to be proud of.”
About Godrej Properties Ltd.:
Godrej Properties Limited was established as a
Real Estate Development company within the
Godrej Group of businesses. The company is
developing Residential, Commercial and IT projects
across cities like Mumbai, Pune, Bangalore, Kolkata
and Hyderabad. Apart from consolidating in the existing
cities, the company has entered into/ is entering into
MoUs for expansion into other locations.
“Godrej Properties Limited is proposing, subject to
market conditions and other considerations, a public issue
of its equity shares and has filed a Draft Red Herring Prospectus with SEBI.
The Draft Red Herring Prospectus is available on the website of SEBI
at www.sebi.gov.in and the respective websites of the BRLMs
at www.icicisecurities.com and www.kotak.com.
Investors should note that investment in equity shares involves
a high degree of risk and for details relating to the same,
see the section titled “Risk Factors” of the aforementioned
Draft Red Herring
GPL has launched its first residential project in Kolkata.
Named Godrej Prakriti, this project combines modern
apartments with beautiful landscaping and ample open spaces.
Located in Sodepur on Barrackpore Trunk Road, the project
has excellent rail and road connectivity and benefits from
the fully developed infrastructural facilities around it
such as schools, hospitals and educational institutions.
The company has tied up with Larsen & Toubro for the construction of the project.
This complex is set in over 24 acres of greenery and has natural water
bodies which the company plans to preserve.
Customers will have the options to choose from a range
of 2, 2 plus study, 3 BHK and Duplex apartments with
areas ranging from 900 – 1800sq.ft. Facilities such as
Community Centre, Club House, Swimming Pool, Library,
Gym etc. are also planned within the complex.
This is the third project by Godrej Properties in Kolkata.
The company is already developing two IT Parks,
Godrej Waterside and Godrej Genesis, in Sector V, Salt Lake.
Announcing the launch, Mr. Milind Korde, Managing Director,
Godrej Properties Ltd., said “We are excited about launching our
first residential project in Kolkata. Our endeavor is to offer homes
and not just living spaces. We intend maintaining a healthy balance
of natural elements within the complex so as to make
Godrej Prakriti an address to be proud of.”
About Godrej Properties Ltd.:
Godrej Properties Limited was established as a
Real Estate Development company within the
Godrej Group of businesses. The company is
developing Residential, Commercial and IT projects
across cities like Mumbai, Pune, Bangalore, Kolkata
and Hyderabad. Apart from consolidating in the existing
cities, the company has entered into/ is entering into
MoUs for expansion into other locations.
“Godrej Properties Limited is proposing, subject to
market conditions and other considerations, a public issue
of its equity shares and has filed a Draft Red Herring Prospectus with SEBI.
The Draft Red Herring Prospectus is available on the website of SEBI
at www.sebi.gov.in and the respective websites of the BRLMs
at www.icicisecurities.com and www.kotak.com.
Investors should note that investment in equity shares involves
a high degree of risk and for details relating to the same,
see the section titled “Risk Factors” of the aforementioned
Draft Red Herring
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