Premium localities sell well in Delhi, Chennai

A weekly snapshot of some big-ticket city deals.

Delhi-NCR
An apartment admeasuring 3,700 sqft located in Malcha Marg was leased out for a monthly rental value of Rs 3,75,000. The rental values in this location range from Rs 2,75,000 4,25,000 per month and this apartment is well within this range and has seen an appreciation of around 12% over the previous year due to restricted supply and high demand, especially from expatriate community.

Malcha Marg is one of the citys most sought-after residential locations, due to its strategic location being equidistant from the established CBD and new business district of Gurgaon. Additionally,the location, due to excellent town planning,offers congestionfree traffic movement.

Chennai
An independent house located at Rambagh, Besant Nagar, was taken on lease by a major corporate. The house admeasuring around 5,000 sqft is located in the prime residential boulevard of the city. The monthly rental of Rs 3,00,000 per month is moderately higher than the prevalent rental for high-end residential units in the area, due to the fact that its location is equidistant from the central business district (CBD) of the city as well as from other emerging business locations. The area, by virtue of being an established residential location, also has good social infrastructure, including retail and entertainment, education and healthcare.

Pune
A three-bedroom apartment unit, admeasuring 1,441 sqft was sold in Chinchwad for a total cost of Rs 49,05,871. The per square foot value of this property is around Rs 3,400 per sq ft, which is in line with the current prevalent values in the location. This mid-ranged apartment complex is located in the suburban location of Pune, which is currently going through a transformation, with many apartment complexes and gated development being planned in the location. The area has been gaining importance due to its convenient location and good access to various office and commercial locations across the city.

Hyderabad
A residential apartment admeasuring 3,170 sq ft was purchased in an under-construction project in Madhapur, Western Hyderabad,at a capital value of Rs 4,250 per sq ft. The property,being built by a prominent national developer,houses apartments ranging from 2,200 sqft to 4,375 sqft in the configuration of three and five-bedroom units. The apartment is located in Madhapur,a part of Mindspace IT Park and adjacent to Westin Mindspace Hotel,in the Western part of Hyderabad. This area has seen a growth in demand for residential units owing to the fact that it is a prominent office location. The location has, due to a steady increase in demand, seen a growth of around 6% in capital values over the past three months. Being located in close proximity to work places, this premium project is expected to garner significant interest from end users. Source: MagicBricks

Mahindra Lifespace to Set up Business Parks in Chennai and Pune

Mahindra Lifespaces Developers Ltd is in the process of acquiring around 4,000 acres in Chennai and Pune, where it intends to set up two more business parks, a top official said late on Monday. The company is acquiring around 1,000 acres of land in Chennai and around 3,000 acres in Pune, its Managing Director and Chief Executive, Anita Arjundas, told Reuters in an interview. Arjundas declined to comment on the cost for land acquisition. The firm, part of the diversified Mahindra Group, specialises in both the residential housing and commercial development segments. A business park is a township with office spaces.

It already has two business parks of about 4,000 acres under its commercial segment. The parks are operated under the brand Mahindra World City’, at Chennai and Jaipur. “Land procurement is underway, so once we are done with a significant part of it, we will start development,” she said. She did not provide a timeframe for completion of the business parks. Mahindra Lifespace is also looking to tap the recovering residential housing market by launching new projects in two tier-1 cities, she said, but did not elaborate. It focuses on the mid market and premium residential customer segments.

It already operates housing projects in Mumbai, National Capital Region (spanning New Delhi and adjoining areas), Pune and Chennai. Mahindra Lifespace has about 8 million square feet of space for ongoing housing projects and new launches. It has already completed construction in 6 million square feet. She said real estate prices in Mumbai, India’s financial capital, has recovered faster, while correction in other cities were much slower. India’s real estate industry, like the sector globally, was hard hit by the 2008 credit crisis after years of booming demand. Property prices doubled in the two years to 2007, fuelled by interest from foreign investors. But the sharp rise was followed by interest rate rises to calm inflation and the global financial turmoil, pulling down sales by more than half.

“Our understanding is that the market is back to the Jan 2008 levels, back to the peak level. General demand in Mumbai seems to be very good, while NCR seems to be a bit of a mixed bag,” she said.

Express Infrastructure in talks with leading hotel chains

17 Mar 2010, 1306 hrs IST, IANS


CHENNAI: South India's integrated commercial-cum-hospitality complex developer Express Infrastructure is in talks with big chains like Hyatt and Shangri-La to manage the hotel property built by it inside the Rs.750 crore Express Avenue Complex here. 

"We are in talks with several global hotel chains like Hyatt, Shangri-La and Planet Hollywood. Our plan is to have a five-star hotel, for which the structure is ready," Chief Financial Officer R.R. Aroon kumar told.

He said the hotel will have between 80 and 120 rooms. "The number of hotel rooms will depend on the operator who runs the hotel," he added.

Express Avenue, the mall-cum-commercial-cum-hotel complex built on over 10 acre area in the heart of the city, will have retail space of around 900,000 sq. ft. and commercial space of around 85,000 sq. ft. housing around 10 big corporates.

"The visitors of these corporates would provide decent customers for the hotel. Further, the shoppers at the mall and the movie-lovers at the eight multiplex theatres would provide good business for the hotel and the restaurants," Aroon kumar said.

He said a star hotel will be a major differentiating factor for Express Avenue.

Meanwhile, Express Avenue's eco-friendly mall is getting ready for its launch this April with anchor tenants like Lifestyle, Big Bazaar and others busy in getting their internal fittings ready.

"The mall and the commercial space is expected to get the Gold rating in terms of energy efficiency," Aroon kumar said.

Nearly 90 percent of the retail space has been licensed out to leading retail brands vending apparel, lifestyle products, toys, electronics, food and others.

Express Avenue is the first mall operator in this part of the region to licence out its retail space and also go in for a mix of minimum guarantee fee/rent-cum-revenue sharing arrangement with its retail tenants.

"Nearly 75 percent of the retail deals are on the basis of revenue sharing while the balance is on pure licence fee/rent basis," he said. 

CCCL Infra looking at PE for Rs 2,000 cr investment

Business Standard: March 10, 2010

Chennai: CCCL Infrastructure Ltd, part of the Chennai-based Consolidated Construction Consortium Ltd, is planning to raise money through private equity for its proposed investments to the tune of around Rs 1,500-2,000 crore. Besides, the company is also planning to foray into power generation and logistics business.

Speaking to Business Standard E Viswanathan, chief executive officer, CCCL Infrastructure Ltd said over the next 18 months the company is planning to invest around Rs 1,500 to Rs 2,000 crore in various projects.

“We are looking for private equity fund to partly fund the investment.” The company is presently in the process of evaluating the value and proposed dilution, he added.

The proposed investment includes Rs 153 crore to create infrastructure at Pearl City Food Port (SEZ), a special economic zone for food processing industry being set up by the company at the port city of Tuticorin in south Tamil Nadu.

“The first unit, being set up by Hexa, a honey maker, is likely to start production by end of this month in the SEZ.”

The company has acquired around 900 acres for setting up the SEZ which will also have a residential project, helipad, hotels, golf course and others.

“One of the first of its kind infrastructure would be automated movements of goods within SEZ.” Since the SEZ will cater to export market, especially to quality-sensitive markets, no vehicle will be allowed inside the SEZ, and the entire SEZ will be automated whereby any movement within the SEZ will be on conveyor, said Viswanathan.

“Housing project would cost around Rs 400 crore, which will be taken as part of phase II development,” he added. The company is also scouting for partners for schools and other commercial developments inside the SEZs.

The other projects, in which the company is planning to invest are automatic car parking facility in Delhi for an estimated cost of around Rs 272 crore and a Ro-Ro facility, for handling cars, at Chennai port for an estimated cost of around Rs 150 crore.

“We got L1 for setting up the automatic car parking facility, which will handle 1,500 cars. The project will be executed on a 30 year BOT model,” said Viswanathan.

Commenting on the proposed foray into logistics business, he said, the company has tied-up with a Korean-company, he declined to reveal the name, to create automatic RoRo facilities at Indian ports. “We will jointly bid for Chennai Port project first, which is estimated to be around Rs 150 crore.”

The company won Chennai-Tirupathi road connectivity project and likely to take up two more road projects. “Total aggregate value of these projects would be around Rs 1,500 crore.”

“The other major diversification would be power,” said Viswanathan. The company is planning to set up a one mega watt solar-based power plant at Tuticorin. The plant can be expandable to five mega watt. “We will finalise the papers by March.”

He added, the company will also look at bio-mass based power plants in Tuticorin, once the SEZ gets 60-70 per cent occupancy. “We can source raw materials for the power plant from the SEZ,” said Viswanathan.

Sobha Developers to reduce debt via land sale

Sobha Developers Ltd plans to cut debt by the end of FY11, banking on cash inflows and monetisation of land sales, a top official said on Tuesday.

"We used to have a debt equity (ratio) of 2:1 earlier. This has been brought down to 0.85:1, going forward it will be further brought down to 0.5:1, before the end of next financial year (FY11)," Managing Director J.C. Sharma told Reuters Trading India chatroom. Sobha Developers has around 3,000 acres of land spread across 10 cities, of which Bangalore accounts for about 31 percent of the total land bank.

The company expects to monetise around 1-1.5 billion rupees from sales of land, he said, but did not provide the location of land which the company intends to sell. It had received 540 million rupees from sale of land in the quarter ended Dec. 2009.

Sobha is also confident of selling 2-million square feet of space in FY10, he said. It has sold 166 units till date out of a total 310 apartments at the recently launched Sobha Garrison, a luxury residential complex for army personnel, in Bangalore. He said there is a revival in the realty industry, even though it would take another two-three quarters for it to come back to normal situation. There could be also some price corrections by the end of the year in "some pockets", like "Mumbai market, where office space costs more than in Manhattan", Sharma added.

The company is also planing to launch about 8 million square feet of space in the next 12-15 months time across four cities, Bangalore, Pune, Coimbatore and a new location in Chennai. Sobha has currently 5.6 million square feet of contracts on hand, he said. 

(Reporting by Rajesh Kurup; Editing by Prem Udayabhanu). Source: Yahoo News

Residential market to lead realty recovery in 2010: CRISIL Research

A recent 10-city CRISIL Research report on the real estate market indicates that demand in the residential market is expected to turn positive in 2010 owing to improvement in affordability, steady economic growth and greater liquidity. However a decline in the currently over-priced capital values of all the three real estate segments - residential, commercial and retail - will persist through 2009. Further the commercial and retail markets will continue to witness erosion in lease rentals through the next two years.

The CRISIL Research City Real(i)ty Report provides comprehensive information and analysis of more than 400 areas across 88 micro markets in 10 cities - Ahmedabad, Bengaluru, Chandigarh, Chennai, Hyderabad, Kochi, Kolkata, Mumbai-MMR, NCR and Pune.

Mr. Sudhir Nair, Head, CRISIL Research says, “Accelerated growth of Indian economy, recovery of global
economy, improved liquidity and expected fall in interest rates are key factors that will signal demand revival in the residential segment. This segment is likely to see a much faster revival due to strong underlying demand for housing and supply coming at attractive price points.”

Sudhir further adds, “Demand in the commercial and retail segment is likely to remain under stress for the next two years owing to excess supply and weak offtake.” The CRISIL Research City Real(i)ty report indicates that capital values for residential sector and lease rentals for commercial and retail properties have substantially corrected till March 2009 due to a slowdown in both the domestic and global economies, and also due to real estate becoming unaffordable. Cities such as Kochi, Chandigarh and Pune, which have greater investor presence as against end-users, witnessed a greater fall in capital values compared to other cities.

The situation is expected to continue through 2009 and 2010, particularly so for the commercial and retail segments. However CRISIL Research believes that demand for houses will improve in 2010, backed by lower home loan interest rates as well as better job security owing to higher growth in the economy. Hence, capital values are likely to stabilise in the first half of 2010, and increase during the second half of the year.
CRISIL Research feels that the pace of economic recovery and confidence revival will have an impact on
sentiments across all the real estate categories and will be an important variable to watch out for.