Olive Group Expanding To IT Sector

August 28, 2008 – 9:20 am

After completing 25 years in real estate industry, Mumbai-based Olive Group is expanding to Information Technology (IT) sector.
Speaking to mediapersons here, P V Mathai, Chairman of Olive Builders, said as part of the diversification, it would associate with the USA-based Millennium Consultant Inc, a leading software company, which has operations in Bangalore and Kochi.
The future expansion plan included infrastructure development, hospitality industry and retail sector and the company was setting its footprints in Coimbatore, Chennai, Mysore and Bangalore, he said.
He said with a view to help the poor, the company has started Olive Foundation and was extending financial aid for building homes to them.

By Rajani | Posted in Real Estate News | Tagged , , , , , , , , , , , , , , , | Comments (0)

Plaza Centers Signed JV Israel-based Elbit Imaging

August 27, 2008 – 2:58 am

Emerging markets property developer Plaza Centers NV said it has signed a joint venture contract with Israel-based Elbit Imaging for developing three projects in India.
The three projects are in the three Indian cities Bangalore, Chennai and Kochi and would have a combined development budget of about 3.4 billion dollars, Plaza said in a regulatory filing to the London Stock Exchange.
As stated by the contract, Plaza would acquire a 47% stake in Elbit India Real Estate Holding Ltd, which already owns around 50-80% stake in the three projects along with local Indian partners.
Three projects, which are in the stages of planning and design, are likely to start in 2009.
“Through this joint venture, Elbit and Plaza are set to take advantage of India’s flourishing economy and thereby mark a new era of growth for Plaza,” company CEO Ran Shtarkman said.
He also added that there is a huge demand in India for high-end residential accommodation, five and four star hotels and western style retail complexes.
“We look forward to meeting some of this demand with the delivery of these large projects, and we will continue to look for parallel opportunities in the future,” Ran Shtarkman said.
The joint venture’s voting rights would be split 50:50 between Elbit and Plaza. Further, Plaza would pay a small amount to the joint venture for a stake.
According to the filing, the JV would also look for development opportunities for large scale mixed use projects in India, predominantly led by either residential or office schemes.
“In addition, Plaza will continue to develop, manage and look for new opportunities for shopping centers based projects in India independently of the JV,” it added.

By manish | Posted in Real Estate News | Tagged , , , , , , , , , , , , | Comments (0)

Ten Billion Dollar Ready To Make India Entry Through FVCIs

August 27, 2008 – 2:54 am

Lack of clarity over foreign venture capital investments (FVCIs) in India has led to 83 applications from foreign venture capital firms piling up with the Reserve Bank of India for approval.

Of these, about 28 venture funds (non-real estate funds) which have sought approval have committed close to $10 billion to India, according to lawyers involved with the registration process. Most of these foreign private equity firms have given an undertaking that they would not invest in the real estate sector or in related activities.

According to sources close to the development, policymakers and financial sector regulators are working towards harmonizing the regulations related to foreign venture capital investment, foreign direct investment and domestic venture capital investment.

“RBI is looking into a broad-based policy issue with regard to the foreign venture capital investments in the country,” said Akil Hirani of law firm Majmudar and Co, who is also advising a couple of foreign venture capital funds planning to register themselves with SEBI.

Although policy makers have been wary of venture funds investing in the real-estate sector, regulators have moved on to scrutinize many other applications in order to track the investors behind these funds. Because they believe that these investors are more focused on the returns they earn.

Regulators are concerned about issues such as whether these funds are beneficial for the real economy or even for the companies they seek to invest. RBI’s concerns also relate to impact of large capital inflows into the country especially into the real estate sector, which could fuel an asset price bubble. However, according to market participants, considering that a regime is already established and operational, any policy hiccups ought to be dealt with rather than keeping the proposals of PE funds on hold.

Policymakers are also looking at creating a level-playing field between foreign and domestic venture capital funds by ensuring that same tax rule is applicable to both. Foreign private equity funds now have an edge over their domestic counterparts under the existing tax system of the country as foreign funds registered in Mauritius and Cyprus enjoy the benefits of the double tax avoidance treaty.

Some of the FVCI applications pending RBI approval under the Foreign Exchange Management Act (Fema) include Apax Mauritius, Baring PE Asia, DE Shaw Composite Investments, Fidelity India Ventures, Goldman Sachs, JP Morgan, Sabre Abraaj Infrastructure and TPG Ventures.

According to the data compiled by SEBI, total investments by domestic and foreign venture capital investors amounted to Rs 31,682 crore as on March 31, 2008, of which Rs 16,705 crore comprises FVCI.

The real estate sector saw the highest amount of fund inflow considering it as one of the high-growth areas.

In 2004, SEBI had removed the real estate sector from the negative list, an incentive given by the market regulator to encourage PE funds to register as FVCI.

By Rajani | Posted in Real Estate News | Tagged , , , , , , , , , , , , , , , , , , , | Comments (0)

Warehousing Property Will Become Fifty Plus

August 26, 2008 – 4:57 am

The explosion in commodities and retailing will result in Indian warehousing sector increasing at the rate of 35% to 40% yearly to become fifty-five billion dollar industry within three years.

By that time the country would have about forty-five million square feet warehousing space and more than a hundred logistics parks.

As said by the report by real estate consultancy Cushman and Wakefield, Warehousing activities account for about 20% of the total Indian logistics industry and offer incredible growth potential. The turnover of warehousing was twenty billion in previous financial year. Report says, “From a mere combination of transportation and storage services, logistics is fast emerging as a strategic function that involves end-to-end solutions that improve efficiencies”. It is further stated in the report that real estate sector is also set to witness rapid growth following the setting up of warehouses in different parts of the country.

By Rajani | Posted in Real Estate News | Comments (0)

SEZ In Gurgaon By Raheja Developers

August 26, 2008 – 4:55 am

Realty firm Raheja Developers said it would invest about four thousan five hundred crore rupees to develop an engineering SEZ in Gurgaon over the next three to five years.
This project, which is expected to create job opportunities for around fifty thousand people (including both direct and indirect) is said to have a potential to generate yearly exports of one thousand crore rupees.
According to Navin M Raheja Raheja Developers Chairman “This is the first notified engineering Special Economic Zone (SEZ) in the northern India. The project cost to develop this two hundred fifty five acre SEZ is about four thousand five hundred crore rupees,”.
The investment would be funded through a mix of debt, equity and internal accruals, he said. “We are also looking at the strategic investors,” Mr Raheja added.
Informing on the land acquisition process Raheja informed that out of the total two hundred fifty five acre, about sixty per cent has been purchased while in the rest of the forty per cent the company has entered into partnership with landowners.
“We are going with the willing partnership of the farmers by paying them competitive prices for their lands. Incase the farmers are still reluctant to sell their lands, we have an option where the landowner can give his land on lease and in return can expect an income of around Rs 2-5 lakh per month, which is much higher with respect to what a farmer would normally earn on an equal stretch of land,” Raheja said.
When asked to comment on the amount of pressure, the growing number of SEZs will put on the limited agricultural land, Mr Raheja asserted that it is not SEZs, but low productivity of agricultural produce, that is an obstacle in the country’s pursuit of producing sufficient food grains.
Raheja, explaining on their SEZ project, said, the first phase of the project that involves the notified two hundred fifty five acre would be completed over the next 3-5 years. The company plans to expand the size of SEZ project and is in talks with landowners.

By manish | Posted in Real Estate News | Tagged , , , , , , , , , , | Comments (0)

Bigger Players Are Looking For Trained Agents

August 25, 2008 – 7:50 am

With the city’s real estate market being dominated by smaller and unheard of players whose actions could fright away prospective buyers, the bigger players are joining hands to give a professional touch to the realty business. “We need to bring in additional people who are properly trained agents. This can be achieved by having a proper course to train real estate agents,” Puravankara Projects Limited (PPL) director Ashish Puravankara said during an interaction with the media here on Thursday.

The move, in a way, would decrease poaching in the sector. “At present, the industry is being steered by those who have been backed b almost40 years experience in the field. The real estate companies mainly pick employees from other companies in the absence of formal training schools. It is high time we have formal training for those entering the industry.” Puravankara said.

The PPL will pressure the Confederation of Real Estate Developers Association of India (CREDAI) to roll out such training programmes, besides interacting with international experts on real estate.

PPL lately invited research specialist from Real Estate Institute of New York University to study the possibilities of identifying Bangalore as a key competitive city in the global economy.

Pointing to the happenings in Bangalore’s realty market, Puravankara said: “The demand for housing has not gone down in the current times in the backdrop of the global slowdown, but people have delayed their buying plans. With professionals around, these buyers could be converted.”

Agreeing with him, Pamela Hannigan, a research expert and member of Real Estate Institute of New York University, said “Students can lift up the capacity to navigate virgin territory through formal training and that will change the dynamics of the real-estate sector.”

By manish | Posted in Real Estate News | Tagged , , , , , , , , , , , , , , | Comments (0)

Government Will Acquire Land With The Consent Of The Owners

August 23, 2008 – 5:37 am

Tata Group chairman Ratan Tata’s threat to pull the Rs 1,500-crore Nano small-car project out of West Bengal in the face of violence and protests over farmland acquisition has deepened the gloom over the Left Front government’s industrialisation drive, with most of its larger and more ambitious infrastructure projects already on hold over land issues.
Just last week, chief minister Buddhadeb Bhattacharjee had indicated that the government has decided to stop work for the time being for the Salim Group’s proposed Barasat-Raichak Expressway. He had told a public meeting in north Bengal that, henceforth, the government would acquire land only with the consent of the owners.
The Salim Group and the state government had formed a special purpose vehicle, New Kolkata International Development Pvt Ltd, to build a clutch of industrial and infrastructure projects, the largest being around Nandigram, requiring a grand total of 28,500 acres.
The Nandigram chemical hub project had to be abandoned last year in the face of violent public protests. Now it has been shrunk to a location around the existing industrial town of Haldia, with the riverine island of Nayachar included.
The Salim group had earlier committed an investment of almost Rs 20,000 crore over a period of five years in West Bengal.
Next in the queue of casualties was the Rs 33,000 crore DLF township project in Dankuni , in Hooghly district-a public-private partnership project with the Kolkata Municipal Development Authority.
Touted as one of the largest real estate projects in the country, the township is proposed to be spread over 4,840 acres. It will have provision for both residential and industrial projects.
Protests over land acquisition have also put a question mark on the proposed projects like Baruipur and Kalyani townships. Almost 500 acres were acquired by KMDA for the Rs 400 crore project at Baruipur.
According to reports, 2,000 acres were to be acquired in Uluberia for a planned industrial development project. An industrial park over 1,325 acres was also proposed at Sankrail in Howrah. Proposed IT hubs in Kalyani, Durgapur and Haldia are also facing the heat of uncertainty.
The Left Front government’s position is that the state has very little barren land, just 1% of the total land area, and that some farmland will have to be acquired to re-industrialise the state. At present, around 100,000 acres will have to be acquired for the projects on the table. Against this, the total farmland in West Bengal is over 13,700,000 acres.

By manish | Posted in Real Estate News | Tagged , , , , , , , , , , , , , | Comments (0)

Merrill Lynch Consolidates Stake In Ansal Properties

August 23, 2008 – 2:14 am

Foreign fund house Merrill Lynch Capital Markets has consolidated its stake in real estate major Ansal Properties and infrastructure to nearly 6%.

Merrill Lynch Capital Markets Espana SA SV has acquired as much as 11.63 lakh equity shares representing 1.03% stake in Ansal Properties through secondary market purchase route. Prior to this transaction the foreign fund house had 4.94% stake, which got increased to 5.96% after the acquisition of the 1.03% stake in the company.

Calculated on the basis on the closing share price of Ansal Properties, the deal value amounts to about twelve crore rupees. The company had said that it would invest thirty-six hundred crore rupees for developing two hundred seventy acres IT SEZ and parks in the country. The proposed SEZ would consist of an IT zone, commercial zone, residential zone and a recreational area. Shares of the company closed at Rs 101.60, down 4.38% on the BSE.

By Rajani | Posted in Real Estate News | Tagged , , , , , , , , , , , , , , | Comments (0)

Terrorism’s Impact On Real Estate

August 22, 2008 – 6:17 am

Human life is unquestionably any terrorist attack’s most tragic casualty. However, the economic impact and impact on real estate is unavoidably in the minds of many in the industry.

After the bomb blasts on July 25 and 26th in Bangalore and Ahmedabad, a number of questions have been raised on how terrorist attacks could have an impact on the real estate markets in India. With worries looming large over similar attacks in other cities, it is time to reflect on some of the short-term global real estate trends which were seen after 9/11 terrorist attacks on the World Trade Centre.

There are two mediums through which terrorism impacts economies. Firstly, terrorist attacks have a direct impact on our economy because they destroy productive physical and human capital. Secondly, terrorism increases the level of fear and uncertainty which could have a larger impact on the overall economy.

After 9/11, office properties in landmark buildings in the proximity had experienced increases in vacancy rates than office properties not located in the nearby areas. The attacks have also drastically increased the perceived risk of large-scale terrorist attacks in Central Business Districts (CBD) and in turn, placed particularly large pressures on major financial centers world over.

In the post 9/11 era, vacancy rates had increased more for buildings with a high perceived vulnerability to large scale terrorist attacks than for buildings that are not perceived as preferred targets. After the WTC attacks, it was anticipated that there would be a flight of occupiers and capital from the CBD areas. Even though this did not happen, new demand was stronger in suburban markets than in CBDs in many cities around the world.
From a short-term perspective, in the face of uncertainty, corporations have delayed their realty decisions. Many companies have only renewed their leases than move to new business premises. Global corporate real estate expansion was slow during the gulf war. Premiums paid for prestigious buildings and the highest floors have also marginally declined.
Many major firms adopted a multi-premises strategy facilitated by technology and favored decentralization. Global firms even considered a greater regional and international dispersal of headquarters activities to avoid business damage. Demand has accelerated for teleconferencing facilities and broadband connections as a substitute for frequent business travel.
Building management costs also increased due to enhanced security measures and higher insurance premiums. Many new projects at that time which were under development were reviewed in terms of building specification and configuration.
The security aspect has also become a differentiating factor for Grade A versus Grade B space. Buildings across the world started following the extensive security practices which were in place only in a few developed countries.

By Rajani | Posted in Real Estate News | Tagged , , , , , , , , , , , , , , , , , , | Comments (1)