Alliance Group enters Hyderabad realty market

Alliance Group, a Bangalore-based real estate developer, Wednesday announced its entry into the Hyderabad market with a Rs.4.86-billion villa project.

The project is called Inner Circle. To come up on 60 acres at Shamirpet on city outskirts, it will have 350 luxury villas designed by Asia's well-known architectural firm, Surbana of Singapore.

The villas will come on plots ranging between 2,400 sq ft and 6,000 sq ft. they will be priced between Rs.8 million and Rs.20 million.

The Rs.44-billion group has roped in Westport Capital, a venture capital firm from the US, for this project.

"Westport will be our FDI (foreign direct investment) partner in the project," said Manoj Namburu, chairman and managing director of Alliance.

He, however, declined to reveal the details of the investment.

"Hyderabad is a futuristic city with majority of economic growth happening in IT and IT related sectors. There is growing demand here for high quality and classy lifestyle living," he said while elaborating on the group's decision to enter the Hyderabad market.

Inner Circle will have a 110-room, five-star hotel on the campus offering international-standard clubhouse facilities like specialty restaurants, a gym, steam baths, swimming pool, tennis and squash courts, snooker, table tennis and banquet halls and children's play area.

Alliance Group has just completed its prestigious project "10 Downing" in Whitefield, Bangalore. It has 12 other projects on hand in Bangalore, Mysore, Chennai and Coimbatore.

Early this year, it launched a Spanish style villa project in Chennai.

Namburu said Alliance was the first real estate group in India to offer an upfront warranty to all its customers.

The group is poised to launch Real Estate TV, India's first 24X7 television channel dedicated to real estate and infrastructure.

Unitech strikes mega deal for Vizag land

The company is believed to have acquired 1,750 acres of land from the Andhra Pradesh Infrastructure & Industrial Corporation (APIC) for Rs33.28bn

Unitech has reportedly bagged the largest ever single-land deal in the country. The company is believed to have acquired 1,750 acres of land in Visakhapatnam from the Andhra Pradesh Infrastructure & Industrial Corporation (APIC) for Rs33.28bn.

North India-based real estate major outbid Dubai-based Al Hamrah Real Estate Development LLC for the Vizag land deal, a leading financial daily says.

The company plans to develop a total built-up area of 100mn sq ft, comprising villas, high-rise apartments, a golf course, club house, IT park, eco resort, hotel, shopping centre, amusement park, hospitals and educational centres, the business newspaper says.

The project will be developed at an estimated investment of Rs300bn over the next 10 years and Unitech is reportedly targeting a revenue of Rs750bn from the project on completion, the newspaper says.

It may be recalled that in August DLF, India's largest real estate firm and Unitech's rival, paid Rs16.75bn for buying 38 acres from DCM Shriram Consolidated (DSCL) in West Delhi.

DLF also won a Rs500bn bid for developing New Bangalore, a 9,000-acre township at Bidadi. But, the project did not involve a single land deal.

Retail, real estate boom will boost HVAC&R sector’

Hyderabad: The boom in the retail, cold chain, entertainment, manufacturing and real estate industry will spur the growth of the Indian heating, ventilation, air-conditioning, cooling and refrigeration (HVAC&R) sectors.

For the past three years, the HVAC&R is growing at an average 25 per cent and by end- of-fiscal 2008-09, it is expected to touch Rs 16,000 crore, according to industry experts.

Air-conditioners have become a necessity and a wide range of upcoming industries need it on a priority. With a bit of support from the Union and State Governments, the sector will grow well, said M.S. Anand, Chairman, CRP Group, Hyderabad.

Needs trained manpower

While the growth prospects are exciting, the worrying aspect is the huge shortfall of trained manpower. The industry also needs to put in place labelling and standards, said Satish Iyengar, former President of the Indian Society of Heating, Refrigerating & Air-Conditioning Engineers (ISHRAE). It is estimated that nearly 5,000 engineers are required every year to meet the needs of the industry.

To address the issue, the ISHRAE is planning to start Institutes of Excellence and sub-chapters for vocational training for fresh graduates, he told newspersons here on Thursday.

International expo

The ISHRAE is organising an International Exposition - ACREX India 2008 in Bangalore, during February 15-17, 2008 at the KPTO trade centre. The Convenor of the Expo, Pankaj J. Shah, said a delegation of 36 companies and over 200 participants from China and over 25 companies and 50 participants from South Korea would participate in the event. In addition, over 350 companies from the US, Japan, Germany, Pakistan, Sri Lanka, etc. would also take part.

They are also working with the Bureau of Industrial Standards (BIS) to put in place relevant standards and certifications for the HVAC&R industry. The voluntary star rating feature introduced by the Bureau of Energy Efficiency (BEE), under the Department of Science and Technology would become mandatory in 2010.

Retail, real estate boom will boost HVAC&R sector’

Hyderabad: The boom in the retail, cold chain, entertainment, manufacturing and real estate industry will spur the growth of the Indian heating, ventilation, air-conditioning, cooling and refrigeration (HVAC&R) sectors.

For the past three years, the HVAC&R is growing at an average 25 per cent and by end- of-fiscal 2008-09, it is expected to touch Rs 16,000 crore, according to industry experts.

Air-conditioners have become a necessity and a wide range of upcoming industries need it on a priority. With a bit of support from the Union and State Governments, the sector will grow well, said M.S. Anand, Chairman, CRP Group, Hyderabad.

Needs trained manpower

While the growth prospects are exciting, the worrying aspect is the huge shortfall of trained manpower. The industry also needs to put in place labelling and standards, said Satish Iyengar, former President of the Indian Society of Heating, Refrigerating & Air-Conditioning Engineers (ISHRAE). It is estimated that nearly 5,000 engineers are required every year to meet the needs of the industry.

To address the issue, the ISHRAE is planning to start Institutes of Excellence and sub-chapters for vocational training for fresh graduates, he told newspersons here on Thursday.

International expo

The ISHRAE is organising an International Exposition - ACREX India 2008 in Bangalore, during February 15-17, 2008 at the KPTO trade centre. The Convenor of the Expo, Pankaj J. Shah, said a delegation of 36 companies and over 200 participants from China and over 25 companies and 50 participants from South Korea would participate in the event. In addition, over 350 companies from the US, Japan, Germany, Pakistan, Sri Lanka, etc. would also take part.

They are also working with the Bureau of Industrial Standards (BIS) to put in place relevant standards and certifications for the HVAC&R industry. The voluntary star rating feature introduced by the Bureau of Energy Efficiency (BEE), under the Department of Science and Technology would become mandatory in 2010.

India Real Estate

India real estate is one of the fastest growing sectors in the country. This rapidly growing real estate market is getting matured day by day as large and international people are taking part. India real estate market has augmenting investors and carries a real industry-responsive approach. Even the real estate prices are augmenting fast, especially Chennai real estate, Hyderabad real estate and Bangalore real estate are on the very high phase. The market boom is spread across the country and hence more and more Indians are not interested in investing for India real estate. The economy rate as well has managed to grow faster than 8% each year because of increasing real estate market trend.

India is recognized as a land for all season. Everybody is amazed by the beauty and culture of India. Humanity, religious and races are nowhere better on this earth than India. Each characteristic of nation represents itself on a huge, inflated scale, praiseworthy when compared with other countries on the globe. People feel immense pleasure owning a property or a piece of land here. India real estate is one of the fastest growing sectors in the country. This rapidly growing real estate market is getting matured day by day as large and international people are taking part. India real estate market has augmenting investors and carries a real industry-responsive approach. Even the real estate prices are augmenting fast, especially Chennai real estate, Hyderabad real estate and Bangalore real estate are on the very high phase. The market boom is spread across the country and hence more and more Indians are not interested in investing for India real estate. The economy rate as well has managed to grow faster than 8% each year because of increasing real estate market trend.

India real estate is just not trendy among Indians, but has also gained popularity among foreigners. Morgan Stanly - one of the world's best banks has of late invested about $152 million Mumbai real estate. The presented report also stated that this is the only biggest investment in India's booming real estate sector. This proves that India real estate is improving in reality. Further more states that foreign investors have immense interest investing in real estate India. Due to the demand of residential and commercial real estate among NRI's has pushed the price of real estate beyond actual limit. This in turn offer common platform for Indians and Foreigner to invest in India real estate for highest return on investment. In case you are searching for real estate property in India then you can come across comprehensive list of residential and commercial property that will be suitable for you and for your budget.

According to a government official report of March 2007, India has attracted $3 billion worth of real estate. This roaring India real estate market is now further expected to contribute for about $30 billion in the upcoming years. When compared to last year, real estate 2007 has gone doubled. Investing in India real estate could lead you as well with the long-lasing wealth and monetary freedom. Real estate can become a cash producing machine for you with this highly profitable business. You must be aware of the basic strategies of investing in India real estate and should be capable to cope with market conditions. People that cannot make the payment at a stretch can go for city home loan options. Read out some online magazines and articles to get educated in your investment first by knowing the large-scale tendency of real estate market. You must as well need to educate yourself about the target neighborhoods joining the backup of successful real estate experts. If you favor getting a real estate property at an affordable price that can be useful for constant holidays and could be the most excellent return on investment, then India real estate is the most suitable destination for you.

Puravankara wins H’bad land deal for Rs 700 cr

The Bangalore-based realty developer Puravankara Projects (PPL) has pipped real estate giant DLF to bag a 30-acre land parcel in Hyderabad for Rs 700 crore. The land near the Hi-Tech City, put on auction by the Andhra Pradesh Industrial Infrastructure Corporation(APIIC), will be used to develop 5-million sq ft of mixed use including high-end ultra luxury retail, residential, commercial and hospitality complexes.

The land parcel is in a high rise zone, and Hyderabad has unlimited floor space index (FSI). Estimates suggest that we could be looking at around 5 million sq ft mixed use development,” PPL director Ashish Puravankara told ET.

PPL is already discussions with several architectural design firms in US and UK for developing the project. The project envisages a development of approximately 6.5 million sq ft area.

APIIC had floated the tender for the project with a reserve price of Rs 20 crore per acre and received three bids including DLF and BPTP Real estate. Hi-Tech City in Hyderabad is the new IT destination for many in the world and the area has developed rapidly with world class infrastructure facilities.

Apart from Bangalore, the Puravankara group has real estate operations in Chennai, Coimbatore, Hyderabad, Cochin, Middle East and Sri Lanka. Puravankara has already around 15 million square feet of land under development.

Currently, many hotels groups are in negotiations with PPL to develop hotel properties in the south. Industry officials say that in the last two years, the property prices in Hyderabad and its outskirts have spiralled. The prices which were hovering around Rs 500 per sq ft in 1991-92, soared to Rs 1,200 per sq ft in 1995 and have touched over Rs 4,000 per sq ft in the main centres. Most of the demand came from the IT companies, they said.

Land auctions fetch Rs. 1,184 cr.

The Government had realised Rs. 934.41 crore and Rs.250 crore from the auction of lands by the Hyderabad and Visakhapatnam Urban Development Authorities respectively during the last four years.

Informing this in a written answer to T. Devender Goud (TDP) and others, Municipal Administration Minister Koneru Ranga Rao said that HUDA had sold 169.62 acres, VUDA 227.49 acres and the Kakatiya Urban Development Authority (KUDA), Warangal, 20 acres.
Rural roads

Rural Development Minister G. Chinna Reddy informed Devineni Rajasekhar (Congress) that rural connectivity, to provide all-weather access, was permissible under the schedule-1 of NREGA and 1,722 cement concrete roads were proposed to be taken up in 5,166 villages in 16 districts.

Real estate fund: A promising investment destination

Real estate is an investment option that gives high returns. The high returns are due to capital appreciation. Regular returns in the form of rentals are a low 5-6 per cent. But high returns comes at a cost as investing in real estate is very cumbersome. Selecting the right property that would give good returns is a time-consuming process.

The cost of buying and selling properties is very high. It requires you to commit large amounts of funds at one go. Funds are locked up for a long time and the investment is pretty illiquid. Hence, a large number of investors stay away from this form of investment.

This drawback was mitigated to a certain extent when some of the prominent companies and banks promoted real estate funds. These are venture funds with a focus on real estate, regulated by the Securities and Exchange Board of India (SEBI), under the category of venture capital funds. They are close-ended schemes.

The offer document of these funds is privately circulated. The amount of investment is very high with the minimum amount being Rs 25 lakhs. The funds are very popular with the high net worth individuals (HNI). The schemes did away with the problems of selecting and managing properties. However, the problem of liquidity remained as they had a lock-in period ranging from one year to six years. The number of investors who could participate in these funds was very low.

All this is set to change with the recent policy guidelines introduced by SEBI. It can change the way we approach real estate investing. SEBI has paved the way for the launch of real estate mutual funds (REMF). REMF like other mutual funds are based on the concept of pooled diversification. Relatively small investments of individual investors are poled in and managed by professional managers. REMF will have an investment objective to invest directly or indirectly in realty and will be governed by SEBI (Mutual Funds) Regulations.

The funds will be initially close-ended and their units will be compulsorily listed on the stock exchanges ensuring liquidity and transparency. The real estate mutual funds will have to declare their net asset value on a daily basis. According to SEBI guidelines, all these funds will have to appoint custodians who will safe-keep the title of real estate properties held by the funds. These schemes can invest directly in real estate within India.

A minimum of 35 per cent of funds are to be invested in real estate properties. The balance can go into mortgage-backed securities, shares, bonds or debentures of companies listed or unlisted dealing in properties and property development, and in other securities like debt and money market instruments.

REMF will be a good investment option for small investors who want to be part of the real estate action. The investment will be very liquid and can be redeemed easily. It provides for diversification of risk. REMF will operate exactly like the conventional equity funds. However, the underlying property markets are not as well-developed as the equity markets. This could lead to a few glitches, which will be solved over time.

Virtual Realty: Correction time

You are happy that the value of your real estate property has gone up several time in the last three-four years. But your happiness is short-lived when you decide to unlock the value. There is a marked difference between the perceived value and realised value. The buyer is not willing to pay the price you initially thought.

The concern that the property markets in various parts of the country is overheated, particularly in certain pockets of NCR and Mumbai, has been doing the rounds for almost the last 5-6 months. There are several reasons for that. Experts say that demand and supply mismatch is one of the reasons affordability is the other. Speculators have bought properties and now they demand an unrealistic premium.

“Affordability has been a prime concern. Speculative investors can hold on to a particular price for sometime, but beyond that, they would start to get jittery and sell off at whatever price is available to him,” says DTZ India managing director Ankur Srivastava.

Experienced developers do not foresee any sudden change in the market, however, they are cautious. According to DLF vice-chairman Rajiv Singh, there is no need to panic as the fundamentals of the industry are strongly in place. “In certain pockets, the market has grown at unrealistic rates. There could be a slowdown in the rate of growth and the sector will continue to grow at a more realistic pace.”

He says that developers as well as investors must keep end-users in mind before positioning a property. “Of course, no one can rule out affordability as being a key criteria,” Mr Singh said. Big and experienced developers have played safe. They have created products according their target customers and priced it accordingly.

Unitech managing director Sanjay Chandra says that there is no reason to worry. “There are minor corrections in some B-grade properties. Once any correction takes place, small developers and fly-by-night operators would face difficulty in disposing off B-grade properties both in commercial as well as residential segments. Buyers’ interest lie in good quality real estate,” he said.

Affordability factor has been raised by many brokers, who actually deal with end-users. They say that in the current market scenario, a Rs 35-50 lakh pricing can be considered realistic, for middle and upper-middle class consumers. “If a family’s income is in the range of Rs 1-1.5 lakh per month, one may shell out a maximum Rs 50,000 towards EMI. Any property, priced above Rs 50 lakh, is unaffordable for this class,” Mr Ved Pal of Ved Properties said. He is a leading property broker in Gurgaon.

Sources say that in view of the sky-high property prices, there has been a major decline in end-user transactions in areas such as Gurgaon, Noida, Navi Mumbai and Mysore. “To a great extent, this has led to pricing being only notional. This is further proven by the fact that property prices in the secondary markets, is a significant 15-20% lesser than that in the primary market,” Mr Pal said.

But there are some who do not buy the theory of over-supply. CBRE managing director Anshuman Magazine is of the view that “oversupply of properties is just on paper and not in real terms. “Many projects are in the pipeline and been announced recently. We really don’t know, what lies ahead in future as these projects come up,” he added.

Unitech buys Vizag tract for Rs 3,328 cr

Real estate major Unitech is learnt to have closed the country’s largest single land deal by buying a 1,750-acre plot in Vishakhapatnam from the Andhra Pradesh Infrastructure & Industrial Corporation (APIIC) for Rs 3,328 crore.

Unitech’s deal is enormous in that DLF, India’s largest real estate firm, paid Rs 1,675 crore this August for buying 38 acres from DCM Shriram Consolidated (DSCL) in West Delhi.

Though DLF did win a Rs 50,000-crore bid for developing New Bangalore, a 9,000-acre township at Bidadi, the project did not involve a single land deal. It is, however, the largest in terms of size and investment.

The company will get some portion of the 9,000 acres from the state government but will have to buy a big chunk directly from farmers at Rs 57 lakh per acre. The exact split is yet to be disclosed.

As for the Unitech deal, industry sources said the company outbid Dubai-based Al Hamrah Real Estate Development LLC. The company plans to develop a total built-up area of 100 million sq ft, comprising villas, high-rise apartments, a golf course & club house, IT park, eco resort, hotel, shopping centre, amusement park, hospitals and educational centres.

The project will be developed at an estimated investment of Rs 30,000 crore, phase-wise, over the next 10 years. Unitech is targeting a revenue of Rs 75,000 crore from the project on completion, a source said.

Incidentally, the last 15-18 months have seen India’s two leading real estate developers pitted against each other for the biggest land deals. Last year, Unitech bagged a 340-acre deal in Noida for Rs 1,560 crore. This August, DLF bought the prime Swatantra Bharat Mills property from DSCL for Rs 1,675 crore.

Though Unitech’s Vizag deal is higher in terms of total value, the DLF-DSCL deal, at about Rs 44 crore, is significantly higher on a per acre basis. It also continues to be the largest private sector land deal.