Real Estate Newsletter DECEMBER 2010

Contents

Industry News ..................................................... 2

Private Equity News ........................................... 7

Regulatory Buzz ................................................. 9

Public Markets .................................................. 10

Land Deals ......................................................... 9

Technology Parks/SEZs ................................... 13

Hospitality ......................................................... 14

Commercial Properties ..................................... 16

Residential........................................................ 18

About Avendus Capital ..................................... 24

Contact Details ................................................. 24

Disclaimer: The news contained herein has been taken from published sources as indicated under each item. Avendus will not be held liable for any erroneous data as published in the source indicated. Avendus also does not take any responsibility for any errors or omissions or results of any actions based upon this information.

Editorial Dear Reader,

Inflation is surging. In India, RBI is expected to raise key

rates, its sixth such move in the past ten months, in an

attempt to tame inflationary pressures, sending markets in a

tizzy. As developed economies continue their near-zero-

interest rate regimes, inflation and asset bubbles remain the

two key risks that emerging economies face in 2011.

In the Indian Real Estate Sector, the demand for residential

properties, a major revenue source for most realty

companies and what was seen as the harbinger for good

times ahead, is receding. An expected increase in

borrowing rates and the near-peak realty prices will hamper

demand further.

As the industry gropes with falling sales, rising interest

costs and lack of capital, Indian players will have to revisit

their game plan and realize that sustainability in the new

decade will require a renewed focus on the fundamentals

and economics that drive markets.

We wish all our readers a happy and prosperous 2011!

Happy Reading!

Avendus Real Estate Team

2

Industry News

INDUSTRY HAILS GDP DATA, CAUTIONS ON RBI RATE HIKE The Financial Express

While welcoming the strong second quarter

GDP growth rate of 8.9 percent, industry players

cautioned RBI to maintain the current interest

rate regime and not to hike rates further.

Bharti Airtel CMD Sunil Bharti Mittal said, the

government needs to think afresh to push the

growth further. The government should allow

more foreign direct investment (FDI) in the retail

sector and the free up its massive land bank, as

it would aid economic expansion, Mittal said.

“The government needs to be bold in some

areas, especially in the area of land,” he said,

adding land owned by public sector enterprises

and defense land can be more productively

utilized in the economy. “The government should

think through these large locked assets and

unlock value,” Mittal said.

MUMBAI OFFICE VACANCIES TO GO UP The Financial Express

Commercial property space in central Mumbai is

set to see a surge of about 22-25 percent in

vacancy by the end of calendar year 2011, as

nearly an additional four million square feet (sq

ft) of commercial space is expected to come up

by then. This would make the central area

amongst the largest commercial spaces area

with a total of about 9-9.5 million sq feet as

compared to South Mumbai (Nariman Point and

Fort) that would have in total about 5 - 6 million

sq feet and Bandra Kurla Complex (BKC) about

7- 7.5 million sq feet. Demand for commercial

property in central and south Mumbai has not

picked up even when rentals in these areas

have been stagnant since last year, say

research analysts in the industry. Low demand

and high supply in the region is expected to

keep the rentals under pressure, they added.

The central area, that includes Worli, Lower

Parel, Parel, and nearby locations are

witnessing a vacancy of as high as 15-17

percent, with an available commercial space of

about 5-6 million sq feet at the moment. Rentals

in the central area are now as low as Rs 150-

170 per sq feet from Rs 290-320 per sq feet in

2008, when demand was at its peak.

“Considering there is a huge supply in the

central part, we feel pricing will remain stagnant

for some time now and probably a correction will

take place next year,” Abhishek Kiran Gupta,

head of research and REIS, Jones Lang LaSalle

India said.

BETTER HOUSING DEMAND DRAWS REALTORS TO TIER-II & TIER-III CITIES The Financial Express

With housing demand from tier-II and tier-III

cities picking up, the real estate developers are

gradually shifting focus to the smaller cities in

North. As per market experts, the growth story of

the smaller cities is likely to continue in the

coming year as well. While the realtors give

credit to the upward economic swing and

stability in the market for better demand in 2010,

they project the sales to be better in 2011.

Ravi Saund, head business development, CHD

Developers, said the improvement in real estate

in tier-II cities was mainly due to increase in

demand for organized realty and availability of

land at affordable prices. “The resurgence in the

sector can be attributed chiefly to infrastructure,

which in turn, accelerated activities in residential

space,” he said.

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REITS HELP TO DIVERSIFY REAL ESTATE INVESTMENTS The Economic Times

Indian investors are now looking beyond the

traditional asset classes like bank deposits,

equities, mutual funds and physical real estate

as investment avenues. They have started

exploring alternative asset classes as a way of

trying to increase their returns and/or diversify

risks. One such asset class that is gaining

popularity is real estate investment trust (REIT),

which is like an investment or a fund. These are

in the form of pooled funds of investors that offer

an opportunity to diversify investments across

various real estate segments with a smaller

capital base (unlike the case of fully owning a

commercial real estate, which requires a large

capital base) and ensure high dividend yields.

NEED FOR SPEED! The Times of India (Mumbai edition)

In economics, to attain an ideal or desirable

level, equilibrium between demand and supply is

essential. This theory, however, fails miserably

in the realty sector where the demand for

housing units far outstrips the supply, which in

turn has a negative impact in the form of rise in

property prices. According to the recent Royal

Institution of Chartered Surveyors (RICS)

research report, nearly 28 percent of India’s

population lives in cities and urban areas - a

figure that is expected to rise to 40 percent by

2020.

While cities such as Bengaluru, Gurgaon and

Hyderabad are setting an example by effectively

introducing single-window system for building

permit applications, in Mumbai a developer has

to acquire almost 52 approvals for a single

project, which results in unwarranted delay and

escalation of price. In 10 of the 17 cities, the

application forms are now available online -

saving developers at least one trip to the

municipality.

REALTY FIRMS TURN TO PE INVESTORS, NBFCS AS BANKS TIGHTEN FUNDING Mint

Realtors are turning to private equity (PE)

investors and non-banking financial companies

(NBFCs) for money as banks tighten funding for

real estate firms in the wake of the recent

bribes-for-loans scam.

At least three real estate companies are

currently engaged in talks with PE investors to

support their ongoing projects as banks turned

risk-averse after transactions with realtors came

under the scanner of regulators and

investigating agencies, according to investment

bankers. Typically, PE funds invest $50-150

million (Rs 225-675 crore) in realty firms for

three-five years and make returns of around 25-

30 percent on exit.

“It (the scarcity of loans) has just started. The

real shortage will be felt in the next 30-45 days.

Given that banks are now hesitant to give new

loans, the issue is likely to persist at least in the

next two quarters. Real estate companies are

now looking at private equity and non-banking

firms for funds,” said Arun Kedia, director of

marketing at Mumbai-based Garnet

Construction Ltd.

“Definitely there is going to be much more

appetite for PEs to look at more projects (in the

real estate sector). From our perspective, I think

that the pace and quantum of funding (by PEs)

will take a leap now (given the shortage of bank

funds),” Ashish Joshi, managing partner (real

estate) at Milestone Capital Advisors Ltd, said.

4

REAL ESTATE SECTOR TO SEE MOST PE EXITS NEXT YEAR The Hindu Business Line

Bad news keeps mounting for the real estate

sector as analysts feel the sector will witness the

maximum number of private equity (PE) exits in

the next twelve months. According to a Grant

Thornton survey carried out amongst executives

from 100 corporate houses, 16 percent of the

respondents feel the real estate sector will see

most exits from PE funds, followed by the IT and

manufacturing sectors.

The survey also mentions that PE exits have

increased because of the revival of the primary

market. But despite the revival, only 38 percent

feel PE exits would yield better returns while 47

percent do not expect better returns.

More than 90 percent of the Grant Thornton

survey respondents said the climate in India for

PE investments had improved. Siddhartha

Nigam, M&A Partner, Grant Thornton India,

said, “Capital is no longer a constraint for growth

and Indian entrepreneurs are realizing the

benefits of accessing risk capital from external

investors. Additionally, PE is emerging as a

logical step before accessing capital markets,

not only to invest for scale but also to get the

‘house in order', making listing a lot easier.”

UP PLANS MEGAPOLIS ALONG YAMUNA EXPRESSWAY The Financial Express

In an out of-the-box way of policy-making which

creates an urban zone 10 times the size of

Noida, the Uttar Pradesh government has

decided to convert the entire rural belt along the

Greater Noida-Agra expressway into an urban

zone, making it the biggest such plan attempted

in India. The Mayawati government issued a

notification bringing 1,187 villages spanning six

districts along the Yamuna Expressway under

the Yamuna Expressway Industrial Development

Authority, cutting short a process that would

otherwise have taken years.

In terms of size, this will be bigger than Greater

Noida or Delhi, its nearest competitors. The

decision is expected to prevent the haphazard

growth of urban sprawls on the flanks of new

highways. The state government has decided to

notify an area of 10-15 km on the left of the

almost-finished Yamuna Expressway and up to

the river Yamuna on the right side, for

“organized and well planned development”.

FUTURE GROUP UNIT TO FURNISH NEW HOMES Mint

After building a retail empire with revenues of

around Rs.10,000 crore, Kishore Biyani is

eyeing a piece of India’s booming real estate

sector—putting finishing touches to new homes.

The Future Group has tied up with developers in

various cities including Lavasa Township near

Pune, Nirmal Lifestyle Ltd in Mumbai, Aparna

Constructions and Estates Pvt. Ltd in Hyderabad

and Omaxe Ltd in Delhi to undertake projects

such as furnishing apartments to providing fitted

kitchens.

DISHMAN TO DIVERSIFY INTO REALTY, HOSPITALITY The Times of India (Ahmedabad edition)

Pharma player Dishman group is diversifying

into real estate and hospitality businesses. The

Rs 1,000-crore group has chalked out plans to

invest Rs 300 crore for developing 100 hectares

of land along Mandvi beach in Kutch. Promoters

of Dishman Pharmaceuticals and Chemicals Ltd

(DPCL) through their closely held company,

5

Dishman Infrastructure Ltd (DIL) are in talks with

Tourism Corporation of Gujarat Ltd (TCGL) to

get land near Mandvi on lease for the project.

DIL is already in the process of developing two

SEZs on 200 hectares of land.

HOME SALES TO DIP IN’ 11 Mail Today

Even as the transactions in the overall real

estate sector will continue its upward trend in

2011, home sales will slow down during the year

due to a steep price rise, said a latest report by

CB Richard Ellis, a global real estate brokerage

firm.

“In 2010, speculative investments and developer

expectations have increased, thereby pushing

prices upwards by approximately 30- 40 percent.

Many developers have again shifted focus on

the luxury segment in 2010, though it offers only

limited demand,” the report said.

OVER-LEVERAGED DEVELOPERS MAY BE HIT BY TIGHTENING OF LENDING NORMS The Indian Express

As managing director of the Hiranandani Group

of Companies, Niranjan Hiranandani has

overseen the company’s rise to become a leader

in housing and commercial properties in the

country. He was also instrumental in the group’s

diversification to other sectors like education,

entertainment and hospitality. Hiranandani also

helped draft the State Policy for Slum

Rehabilitation in Mumbai, served on the HUDCO

boar and is acting adviser to the Centre on

housing and habitat policy. In an interview,

Hiranandani talks about the company’s plans for

the future, rehabilitation and the recent bribes-

for-loans scam.

LOW INCOME HOUSING- NOT A DREAM BUT A 'REALITY' The Economic Times (Delhi edition)

Between 2000 and 2007 urban India witnessed

a vibrant housing construction market and

housing finance was growing at over 30 percent

year-on-year. However, the market was largely

focusing on the organized high and upper

middle-income segments. This was the top 15

percent of the urban population where housing

was available at Rs 15 lakh and above. There is

however a huge market need and opportunity in

providing housing to the next 40 percent of the

population, which segment is ever growing.

These are households earning between Rs

8,000 and 20,000 and looking to buy housing

priced between Rs 4-10 lakh. Over two thirds of

this income group live in rented accommodation

and are aspiring to own their houses. In fact, in

metro cities, such as Delhi and Mumbai, given

the housing shortage, many of them actually live

in low-income communities or even slums.

In a recent development, through a study carried

out by the NHB, we have seen that there are at

least 25 housing projects across seven cities in

the Rs 4-10 lakh category. These projects are

expected to provide anywhere between 40,000

to 50,000 houses in the next 6-12 months. In

addition there are at least half a dozen new

housing finance institutions that are looking to

address this market segment and a few more

looking to enter this business. There is definitely

some momentum in this market segment but to

realistically address the need of 20 million urban

households the government will need to play a

key role in providing the enabling and supportive

regulatory framework for the market to work

efficiently.

6

NBFCs MOVE INTO HOME LOAN MARKET Mint

Non-banking financial companies (NBFCs) that

have thus far largely restricted their operations

to broking, advisory and wealth management

are now expanding their focus to the retail

housing finance business, a sector dominated

by commercial banks. Three NBFCs—Edelweiss

Capital Ltd, Muthoot Fincorp Ltd and Dewan

Housing Finance Ltd (DHFL)—are either setting

up subsidiaries or acquiring business from

banks to tap India’s fast growing mortgages

market.

The move by NBFCs assumes significance

because the Reserve Bank of India is currently

drafting norms on new banking licenses and

many NBFCs are willing to convert themselves

into banks—should they get the go-ahead.

India’s home loan market is estimated to be

around Rs 5 trillion, 60 percent of which is

controlled by banks and the rest by housing

finance companies, according to Crisil. Housing

Finance Development Corp. Ltd (HDFC) is the

largest company in the space with Rs.1.06

trillion assets in September.

NO RESPITE IN SIGHT FOR REALTY PLAYERS Financial Chronicle

In 2010, realty prices recovered substantially

and they are back at their peak levels or even

higher in cities such as Delhi and Mumbai. The

trend is also apparent in all other major cities.

The sector will continue to face headwinds in

2011 as well. We are seeing one of the worst

liquidity deficits in the financial system in many

years (since the blip in 2008, after the Lehman

Brothers collapse). Interest rates are rising and

banks have turned cautious about lending to real

estate developers following the recent bribe-for-

loan scandal. Other alternative funding sources

of capital (for example private equity) are either

not adequate or are getting saturated fast.

Above all, the Reserve Bank of India recently

mandated banks to give home loans only up to

80 percent of transaction value, in case of home

loans of more than Rs 20 lakh, and also

increased the risk weight on home loans of more

than Rs 75 lakh to 125 percent. Provisioning

requirement for teaser home loans has been

hiked from 0.4 percent to 2 percent.

REALTY A WORRY, NBFCs NEED MORE REGULATION The Times of India

The Indian financial system is stress-free but

there are some soft spots in the economy, which

are the cause for concern. And external factors

like growth inequalities in an increasingly

correlated financial world could also be a point

of bother for the Indian economy, the second

financial stability report by the Reserve Bank of

India (RBI) pointed out.

On the domestic front, the report pointed out that

the real estate sector and the rising

delinquencies in the home loan sector could be

cause for concern, and the central bank has

already taken some steps that could mitigate the

rising risks. “The developments in the housing

sector are emerging as a concern due to sharp

rise in prices in some centres and in some

segments of the housing sector,” the report

noted. “There was significant increase in the

delinquencies in housing loans though gross

NPA ratio remained moderate at around 2.5

percent. This was largely a result of adverse

credit selection during the periods of aggressive

lending prior to the crisis,” it added.

7

Private Equity News

RAVI HANSOTY TO RAISE $350M FOR INDIA REALTY FUND Financial Chronicle

Ravi Hansoty, the former head of the Asia-

Pacific region at Citi Property Investors, plans to

raise as much as $350 million by the end of next

year for an India property fund. The fund aims to

buy land to build apartments and hotels in India

as early as June, said Hansoty, who left

Citigroup's real estate asset management unit in

November.

Hansoty said he will set up his company in

Mumbai and may relocate from Hong Kong after

he stops accepting new money from investors.

BARING TO ENTER INDIAN REALTY IN 6 MONTHS Business Standard

Baring Private Equity Partners (BPEP), the

global PE major, will begin investing in Indian

real estate in the next six months, according to a

top executive of the fund.

RELIGARE CLOSE TO BUYING 85 PERCENT IN INDIAREIT FUND The Economic Times

Religare Enterprises is close to buying 85

percent of the Ajay Piramal Group promoted real

estate fund Indiareit Fund Advisors, valuing the

entire fund at around Rs 250 crore, two persons

directly involved in the transaction said.

The deal is expected to be announced by the

end of December, they said. Indiareit managing

director and chief executive officer Ramesh

Jogani and his team of 20 employees will hold

the rest. The Ajay Piramal Group is exiting from

the fund because of a likely conflict of interest as

the group is now focused more on land

acquisition and development. “There is an

inherent conflict in fund management and the

real estate business. The realty fund is a small

business (compared to realty) for Piramals and

there is no reason for exiting this business other

than focus on the land acquisition business,”

said a real estate industry official. Realty

consultancy firm DTZ is acting as the advisor for

the transaction.

PRAGNYA FUND TIES UP WITH VGN DEVELOPERS FOR REAL ESTATE PROJECT IN CHENNAI Press Release

Pragnya Fund has formed a joint venture with

VGN Developers Ltd for developing a 6-lakh

square feet residential development with all

modern amenities at Paruthipattu on the

Poonamalli Avadi High Road (State Highway

55), Chennai. The project will have apartments

that will cater to the growing segment of

affordable housing. As this site is close to the

Industrial Estate at Avadi, this project is also

conveniently located for the employees working

in the industrial estate. The approvals for the

project are in progress and the launch is

scheduled for mid-2011.

US-BASED PE FUND MAY INVEST 400 CRORE IN MANTRI DEVELOPERS The Times of India

Morgan Stanley-backed Mantri Developers Pvt

Ltd is set to raise between Rs 350-400 crore

from Xander Group Plc, a private equity fund

headquartered in the US, for two large mixed-

use developments in Chennai and Bangalore,

said a source directly involved with the

development. The transaction will be executed

through two separate special purpose vehicles,

8

in which Xander will hold 49 percent stake each,

added this source who did not wish to be named

as talks were private. Bangalore-headquartered

Mantri Developers was one of the first real

estate developers to attract foreign direct

investment in the sector when it raised $68

million from Morgan Stanley at the entity in

2006. When contacted, Mantri Developers

Managing Director Sushil Mantri said, the deal

making was in advanced stages but not done

yet. He declined to comment further.

INDIAREIT TO RAISE $622M FOR PROPERTY FUNDS Financial Chronicle

Indiareit Fund Advisors, a real estate venture

capital fund backed by 3i Group, plans to raise

about $622 million in three new funds that will

invest in Indian property across the nation’s

major cities.

Indiareit plans to raise $400 million for an

offshore fund, as well as a Rs 6 billion rental

yield fund and a Rs 4 billion domestic debt fund

in the year starting April 1, chief executive officer

Ramesh Jogani said.

SAFFRON TO LAUNCH REALTY FUND, EXIT SOME INVESTMENTS WITHIN 2 YEARS Mint

After becoming a part of India’s largest private

equity fund by assets under management IL&FS

Investment Managers Ltd (IIML), Saffron Asset

Advisors Pvt. Ltd plans to launch a real estate

fund and start exiting some of its investments in

the next 15-24 months.

“We might look at doing products apart from

rental yield and may do it in the next six-eight

months, though nothing has been fixed yet,” said

Ajoy Veer Kapoor, founder and managing

director, Saffron, now a subsidiary of IIML.

Rental yield funds typically invest in properties

that have been rented out, based on the premise

that such properties have lower risk compared

with properties still being developed. Also,

rented properties provide a regular income.

Saffron had two funds under management—

Yatra Capital, a €220 million (Rs 1,311 crore)

fund listed on the Euronext Stock Exchange,

and Saffron India Real Estate Fund (Siref) 1, a

$110 million (Rs.497.2 crore) unlisted fund.

About 75 percent of Yatra and about 24 percent

of Siref has been deployed.

PRIVATE EQUITY PLAYERS GET CAUTIOUS WITH REALTY FIRMS Hindustan Times

As scams and controversies loom over the real

estate sector, private equity (PE) investors are

consolidating investments and opting for

tranche-based investments. While most of the

equity level deals have been put in the deep

freezer, deals at project levels through creating

special purpose vehicle (SPV), are being

evaluated. In most of the cases, the PE players

are dishing out new checks and balances to

secure them against any risks, say industry

trackers.

ANAND RATHI-KNIGHT FRANK INDIA FUND RAISES RS 220 CRORE Business Standard

Anand Rathi Financial Services has completed

the first round of fund-raising for the realty fund it

has set up with Knight Frank India Pvt Ltd,

collecting about Rs 220 crore.

9

IDFC PUTS RS 150 CR IN TRIL INFOPARK Business Standard

Infrastructure Development Finance Company

Limited (IDFC) has invested Rs 150 crore in

TRIL Infopark, a company floated by Tata Realty

and Infrastructure Limited along with other

partners, to develop Ramanujan IT City at

Chennai.

PE COMPANIES TAKE THE REINS, TURN REAL ESTATE DEVELOPERS Mint

More real estate private equity (PE) investors

are turning developers, investing money from

their funds into their own projects to shield

themselves from the vagaries of the sector. A

lack of transparency, the murky nature of land

transactions in India and project delays that are

holding up their exits are forcing PE investors to

take the reins into their own hands.

Gurgaon-based IREO Management Pvt. Ltd is

leading the pack, having tweaked its business

model four-five years earlier to become an

integrated real estate firm acting both as the

financier and developer of its projects. At least

four other PE firms have adopted the model in

recent months.

Regulatory Buzz

GUJARAT HAS NEW LAND ACQUISITION POLICY Mint

Gujarat announced a new land acquisition

policy, a month ahead of a biennial event to

attract industrial investment to the state.

The new policy, which comes into effect

immediately, offers a series of incentives,

including purchases at market price, to farmers

willing to sell land to the government. The policy

also addresses the issue of post-sale sources of

income for farmers who sell their entire land

holding.

“With a lot of industrial development taking

place in the state, GIDC (Gujarat Industrial

Development Corporation) needs to acquire

huge land that includes land from farmers also,”

said Saurabh Patel, the state’s industries

minister. “However, we don’t want to buy the

land without consent of the farmers, so we have

come out with the new policy.”

The Vibrant Gujarat Global Investors’ Summit

2011 is scheduled to take place 12-13 January.

Under the new land policy, GIDC will not acquire

any agricultural land without the consent of

farmers. The government will purchase the land

at market price.

NO QIP FOR COS WITH SUB-25% FLOAT The Economic Times

The market regulator has mandated that

companies with less than 25% public float will

have to raise funds through a public share sale

and not through private placement to institutions,

a move aimed at widening retail holding and

limiting stock price manipulation. The recent

circular from the Securities Exchange Board of

India (Sebi) could dampen share prices of

companies such as real estate developer DLF

and Wipro that have to comply with the 25%

public float rule by June 2013. A public share

sale takes months to complete, leaving scope

for wild price fluctuations, unlike institutional

sales that happen in two weeks.

10

Firms that may face this hurdle include Jet

Airways, Oracle Financial, and Gillette, in which

promoters hold more than 75%. In the last two

years, 108 companies raised Rs 60,970 crore

through private placements, including Rs 28,339

crore in 2010 alone. Many companies such as

Unitech benefitted from the placements.

Public Markets

LAVASA’S $436-M IPO TO BE DEFERRED BY SIX MONTHS The Financial Express The Asian Age

A $436-million IPO by Hindustan Construction

Co’s Lavasa unit is likely to be deferred by up to

six months, said three sources, after the

environment ministry demanded reasons not to

close its town building project. “If this issue

continues, we can not go ahead with the IPO,”

Praveen Sood, chief financial officer, Hindustan

Construction, said.

SCAM FALLOUT: DEVELOPERS POSTPONE RS 13,000-CRORE IPOs TILL NEXT YEAR Hindustan Times

Six real estate companies, all set to raise over

$2.9 billion or Rs 13,000 crore through the

capital market, have postponed their plans till

the middle of next year. Industry experts have

blamed the LIC scam for bringing down the

interests of foreign and domestic institutional

investors in public offers. For some, the

government and market regulator the Securities

and Exchange Board of India (SEBI) played

spoilsport.

Developers such as Embassy Group, Lodha

Developers, Emaar MGF and Raheja are not

risking their initial public offerings (IPOs) and

would be hitting the market only mid next year,

sources say. While controversies do not seem to

be ending for Sahara Prime and Lavasa whose

IPOs, if they see the day of light, will only be

able to raise liquidity through the primary market

by next year middle. The total amount to be

raised by these developers amounts to Rs

13,000 crore. No developer, however,

acknowledged that the delay was due to

controversies surrounding the sector.

“The market condition was volatile and we have

decided to wait till the situation stabilizes.

Although we have never announced when we

will hit the capital market, so there is no question

of postponing the IPO,” said Abhisheck Lodha,

managing director, Lodha Group. Lodha

Developers is looking to raise Rs 2,800 crore.

CAN EMAAR PULL IT OFF, FINALLY? Business Standard

Realty companies have lined up $2 billion worth

of IPOs and are waiting for an opportune time to

enter the market. Among them is Emaar MGF

Land, a joint venture between Emaar Properties

PJSC of Dubai and MGF Development. The

company in its previous three attempts had

plans to raise between Rs 3,000 and Rs 7,000

crore but decided not to go ahead due to weak

investor sentiment.

BPTP'S PUBLIC OFFER HANGS IN UNCERTAINTY Mint

Realty firm BPTP Ltd said there is no immediate

plan to launch its Rs 1,500 crore initial public

offering (IPO) due to volatility in the stock

market. The company had earlier this year

received market regulator Securities and

Exchange Board of India's (Sebi) approval for an

IPO to fund its existing and future projects, and

retire debt. “Market is volatile... We don't have

11

any immediate plan to hit the market,“ BPTP

managing director Kabul Chawla said.

NITESH TO RAISE RS 250 CRORE DEBT Financial Chronicle

Nitesh Estates plans to raise Rs 250 crore in

debt next year, citing chief operating officer

Ashwini Kumar. The developer has debt worth

Rs 10 crore, which it plans to retire in the next

few days.

Land Deals

PUDA TO AUCTION 3.7-ACRE MULTIPLEX SITE IN AMRITSAR The Indian Express

Punjab Urban Planning and Development

Authority (PUDA) announced it would auction a

commercial site measuring 18,053.2 square

yards (more than 3.73 acres) in the posh Ranjit

Avenue on Ajnala Road in Amritsar. The site

would be sold for construction of a multiplex with

a hotel on one side and a shopping plaza on the

other, a PUDA spokesperson said.

DLF SELLS 150 PLOTS IN GURGAON FOR MORE THAN RS 500 CRORE Mint

Country’s largest realty firm DLF has sold 150

plots, garnering more than Rs 500 crore, in a

township project at Gurgaon, sources said. DLF

launched a 100-acre township ‘Alameda’ in

Gurgaon.

In the first phase, it released 150 plots at Rs

60,000 a sq yard with inaugural discount of 10

percent and they were sold within a few hours of

the launch, sources said. The plots are available

in two sizes -- 540 and 700 sq yards.

RS 1.85 CRORE FOR A 250 SQ M PLOT! The Tribune

The sale of a 250 sq m plot in New Shimla for a

whopping Rs 1.85 crore could become a cause

for heavily enhanced property tax for the

residents of the newly merged area into the

municipal corporation. The area could now be

treated on a par with the posh Mall area.

As the issue of fixing property tax in the town on

the basis of zones created as per commercial

viability of the area is being deliberated upon,

New Shimla could be rated as a highly

commercial area. The issue came up for

discussion during the MC house meeting where

it was pointed out that property tax in New

Shimla must be at par with the Mall Road as a

250 sq m plot during auction by the Himachal

Urban Development Authority fetched Rs 1.85

crore.

RMZ CORP BUYS 25 ACRES FROM ADARSH Business Standard

Bangalore-based real estate developer RMZ

Corp has bought around 25 acres of land in the

outer ring road area of the city from another city-

based developer, Adarsh Developers, in a bid to

increase its footprint in the city.

VENTURE FUND TO EXIT GLAXO’S WORLI PLOT The Times of India (Mumbai edition)

It was touted as the most expensive and

exclusive residential block in South Mumbai’s

Worli area. Dogged by regulatory and legal

issues from the start, Oberoi Skyz, the twin 65-

storey super luxury apartment building planned

jointly by ICICI Ventures and Oberoi

Constructions, is now caught in a fresh twist.

12

ICICI Venture Funds Management Company

Ltd, the private equity (PE) subsidiary of India’s

largest private sector lender, is in the process of

divesting its 50 percent stake in the prestigious

project. While the primary reason (for divesting

stake) is said to be closure of the fund’s tenure

in January 2011 extended earlier from October

2009, realty sources say the fund believes it is

better to exit as it would be some time before the

regulatory hitches are sorted out for construction

to begin.

1.57 ACRES UNDER HAMMER FOR RS 60 CRORE IN MOHALI The Indian Express

If it is any indication of the decline in real estate

prices in Mohali, a 1.57-acre freehold site in

Sector 67 here has been put under the hammer

for a much lesser price than that at which a

much bigger site for a similar use was sold in

Mohali almost three years ago. Punjab

Information and Communication Technology

Corporation Limited (Infotech) has fixed Rs 60

crore as reserve price for its commercial site,

which could be used for setting up of a

commercial complex, including shopping mall,

retail complex, multiplex, hotel or any other

allied facility.

INDIA’S REALTY SECTOR NEEDS TITLE INSURANCE Financial Chronicle

Concept of title insurance in India has been on

sidelines for long. In an interview, Sameer

Dhanrajani, country head of Fidelity National

Financial India, says once the insurance bill is

passed, the firm would be keen on setting up

shop in India and that title insurance would

change the landscape of realty industry.

Title insurance is one of the key areas to be

looked at when buying into the Indian real estate

market. Data from property bought over the last

100 years show a lot of challenges in terms of

title and bad loans. Our knowledge shows that

there is a definite need for title insurance in India

to safeguard the interest of the consumer.

BMC CANCELS LEASE OF WORLI PLOT The Times of India (Mumbai edition)

The twin-tower, 65-storey ultra luxury residential

project planned at Worli is unlikely to take off

soon. The BMC has cancelled the lease of the

4-acre plot to GlaxoSmithKline (GSK), the

pharmaceutical major. The land belongs to the

BMC but was given on a long lease to GSK in

1938. In 2004, the company sold (assigned) it to

I-Ven Realty Pvt Ltd, a joint-venture firm set up

by Oberoi Constructions and ICICI Venture

Funds Management Company Ltd, for Rs 107

crore.

NOW, NTC TO E-AUCTION MILL LAND IN GUJARAT The Hindu Business Line

The National Textile Corporation (NTC) has

shifted base to Gujarat to resume e-auction of

mill lands. The three-day e-auction to sell off

plots in its two-closed mill sites got off to a brisk

start, sources in NTC said. The online auction

for the 33,222-sq.m plot of the New Manek

Chowk Textile Mills in Ahmedabad began at 10

a.m. with a reserve price of Rs 41.27 crore.

Twenty-one bidders were in the fray who, after

hours of spirited bidding, ratcheted up the price

to Rs 90.31 crore at 5.30 p.m. The site also

accommodates a bungalow with 400 sq.m of

built-up area

13

Technology Parks/SEZs

HUDA TO DEVELOP PINJORE-KALKA URBAN COMPLEX The Indian Express

Haryana Urban Development Authority has

ambitious plans for the development of the

Pinjore-Kalka Urban Complex.

The project, which is spread over 12,000 acres

approximately, includes residential, commercial

and industrial areas. Of this, about 34 percent of

the total area is dedicated to residential sectors,

from Sectors 1 to 31, an additional Sector 31-A,

and Sector 32. These sectors have been

proposed in the area lying on both sides of

National Highway (NH)-22 between Pinjore and

Kalka.

DLF TAKES CYBER CITY CASE TO SC The Financial Express

Real estate major DLF has moved the Supreme

Court seeking stay on the Punjab and Haryana

High Court that directed it to demolish structures

at its upcoming Cyber City project in Gurgaon

and return around 20 acre of prime estate to

villagers.

DLF, which purchased 19.5 acre from the

Haryana government in 2006 to develop its Rs

7,500 crore ambitious project, was asked by the

high court in October this year to demolish

structures on the land and return the same to

the villagers of Nathupur in Gurgaon. The 19.5-

acre patch is crucial to the grand Cyber City

coming up over a sprawling 100-acre land.

Cyber City, which houses 42 top multinational

companies and spreads over 100 acre, will be

one of India’s largest integrated technology

parks.

INTEGRATED TOWNSHIPS AND APPRECIATION The Times of India (Bangalore edition)

There are a few developers who attempt to put

together these infrastructural marvels in and

around Bangalore, one company that seems to

have taken an early lead in this sector and who

has actually put up the infrastructure in place is -

Patel Realty India Limited (PRIL).

A fully-owned subsidiary of Patel Engineering,

an infrastructure and engineering major, PRIL is

building not one but three Neotowns, the

flagship brand of the company which signifies

their integrated townships. Speaking on their

plans, Pravin Malkani, President of Patel Re a l t

y s ay s, "Neotown is our brand of integrated

townships, and these are coming up in Noida

and Port Louis, Mauritius, apart from Bangalore.

We have put in a lot of thought and expertise

from international architects (AFW, Singapore)

in developing the urban master plan of

Neotowns."

IDFC PUTS RS 150 CR IN TRIL INFOPARK Business Standard

Infrastructure Development Finance Company

Limited (IDFC) has invested Rs 150 crore in

TRIL Infopark, a company floated by Tata Realty

and Infrastructure Limited along with other

partners, to develop Ramanujan IT City at

Chennai.

14

Hospitality

SWISSOTEL GURGAON TO OPEN IN 2013 Mail Today

After launching itself in India with a hotel in

Kolkata, the Zurich- based Swissotel Hotels and

Resorts, which operates in the upper end of the

hospitality market, is all set to roll out two more

deluxe hotels in Gurgaon and Bengaluru. The

240- room Swissotel Gurgaon, which will be up

and running by 2013, will showcase traditional

Swiss architecture.

AIRTRAVEL ENTERPRISES SETS UP HOSPITALITY ARM The Hindu Business Line

The Airtravel Enterprises (ATE) Group, a leading

travel and tour company based here, has

ventured into the hospitality division by setting

up mid-segment and upper mid-segment hotels

in different locations in Kerala. The hospitality

division has been branded “The Capital,” an

official spokesperson for the group said.

HYATT, KAMAT TO ENTER HOSPITALITY BUSINESS IN GUJARAT Mint

With tourist inflow rising in Gujarat, hospitality

sector players have started showing their

interest in setting up new hotels and restaurant.

Juniper Hotels Pvt. Ltd (JHPL), which has a tie

up with Chicago-based Hyatt Hotels Corp., is

setting up a five star hotel in Ahmedabad under

the brand name Hyatt Regency at an investment

of Rs 400 crore, while Kamat Hotels (India) Ltd

is planning to set up two three star hotels

Gujarat with an approximate investment of over

Rs 50 crore, officials of the firms said.

“We are setting up a 300 room, five star hotel in

Ahmedabad on Ashram Road. We have already

acquired two acres of land for this project, which

will be completed by 2013.

HOLIDAY INN EXPRESS ARRIVES IN MAHARASHTRA Financial Chronicle

West Pioneer Properties, London’s Alternative

Investment Market (AIM) listed property

developer, is considering introducing the Holiday

Inn Express branded hotels in Maharashtra.

“We’re planning to open a Holiday Inn Express

hotel at our Aurangabad and Nashik properties

as these markets would be ideal for this kind of

a mid-market brand. We are currently evaluating

whether these should be 100 room or 200 room

hotels,” said Ajay Gupta, CEO at West Pioneer

Properties (India).

KEYS HOTELS TO INVEST RS 550 CRORE TO OPEN 15 PROPERTIES Business Standard

Keys Hotels, the mid-market brand of New York

based Berggruen Hotels plans to develop 15

hotels across India in the next three years with

the total investment of Rs 550 crore.

MARG TIES UP WITH SHANGRI—LA TO OPERATE TRADER’S HOTEL The Hindu Business Line

Diversified business conglomerate MARG Ltd

has tied up with Hong Kong based luxury hotel

group Shangri—La Hotels and Resorts for

operating the Trader’s Hotel located in the

famous IT Corridor. MARG Ltd through its

subsidiary Riverside Infrastructure India has

signed a management contract with Shangri—

La Hotels to operate Trader’s Hotel, Chennai,

15

scheduled to open in early 2012. The

development would include a mall, office block

and the 246—key hotel along with 52 service

apartments, it said

INDIAN HOTEL ROOMS MARKET TO TOUCH RS 119 BN BY 2013 Deccan Herald

The hotel room market of 10 major cities is likely

to grow by 17 percent to touch Rs 119 billion in

next three years due to strong GDP and growing

IT and finance sectors, according to a recent

study. Presently, the market in these cities stood

at Rs 74 billion, according to a study released on

the country's Hotel Market by Knight Frank India.

INDIAN HOTEL ROOMS MARKET TO TOUCH RS 119 BN BY 2013 Deccan Herald

The hotel room market of 10 major cities is likely

to grow by 17 percent to touch Rs 119 billion in

next three years due to strong GDP and growing

IT and finance sectors, according to a recent

study. Presently, the market in these cities stood

at Rs 74 billion, according to a study released on

the country's Hotel Market by Knight Frank India.

SWEDISH HOTEL CHAIN SVENSKA OFFERS FIVE-STAR LUXURY IN SMALL TOWNS The Hindu Business Line

Swedish boutique hotels chain Svenska Hotels

looks to bring in new dimension to the five star

hospitality concept in India. Being a chain with

small-format hotels with under 100 rooms, the

company can set up properties in shopping

malls, commercial complexes, IT parks, special

economic zones and locations with a space

constraint.

Starting off from Mumbai (30-room property) and

Bangalore (56-room property) at an investment

of Rs 36 crore and Rs 50 crore, respectively,

Svenska plans to tap Tier-II and Tier-III Indian

cities where a large format luxury hotel may not

be viable.

TAJ MULLS NEW BRAND BETWEEN GINGER, GATEWAY Financial Chronicle

Hospitality group Taj Hotels, Resorts and

Palaces said it will aggressively expand in the

budget hotels segment, while it mulls bringing in

a new brand to plug the gap between economy

and mid-segment.

"We want to go very aggressive in the economy

segment with our Ginger brand by increasing

presence in the segment with at least 150-200

hotels soon," said Raymond Bickson, managing

director and CEO, Taj Hotels Resorts and

Palaces.

SVENSKA PLANS TO HAVE 6 HOTELS BY NEXT YEAR The Financial Express

Sweden-based small boutique format five-star

hotel chain, Svenska Hotels, plans to have 25

hotels in India by 2020 with a total room

inventory of 1,200. The company is looking at a

mix of owned and managed properties in the

country. It has set aside an investment of Rs

1,000 crore over the next 10 years to go into

land acquisition and setting up of properties. The

money is a mix of debt and equity. Moreover,

the company expects a private equity

investment of around $50 million (around Rs 225

crore), part of the overall investment planned by

the company, by the end of 2011.

16

PRINCE FOUNDATIONS BUYS DASAPRAKASH PROPERTY The Hindu Business Line

The Chennai-based Prince Foundations has

acquired the two-acre Hotel Dasaprakash

property in the heart of the city for Rs 165 crore.

The Chairman and Managing Director of Prince

Foundations, Ashwin Kumar Kamdar, said that

the company has acquired the landmark

property on the Poonamallee High Road at

Egmore following an order by the Madras High

Court. The order passed on December 14

directed the property can be sold to Prince

Foundations, which will make an initial payment

of Rs 20 crore before December 20.

Prince Foundations had made the payment on

time, and filed an affidavit and had committed to

make the balance payment. Kamdar said the

company is planning a luxury residential project

at the location. Over 150 apartments will come

up on two towers of about 17 floors each. The

total built-up area would be about 3 lakh square

feet with apartments of three- and four-bedroom

apartments of 1,950 to 2,500 sq.ft.

GLOBAL HOTEL CHAINS CHANGE INDIA STRATEGY The Economic Times

International hotel chains are changing business

model in India. They are going beyond lending

brands and managing hotels owned by local

partners to invest directly in ventures that

develop hotels to scale up operations in the

world’s second fastest growing major economy.

Manav Thadani, managing director of hospitality

consultancy firm HVS India, said globally most

international hotel chains operate through

management contracts and have an asset-light

strategy. “But they are bullish on the Indian hotel

industry and are willing to hold equity, especially

for expansion in mid-scale and budget hotel

space.”

He said holding equity ensures that the global

firm gets better control of business, which

results in better standards. Hilton had started the

trend after it formed a joint venture with real

estate company DLF six years ago, but many

others are now striking similar deals.

Commercial Properties

MINI-MANHATTAN' MEETS ECO HURDLE Hindustan Times

It is a decision that could jeopardize the Mumbai

Metropolitan Region Development Authority's

(MMRDA) plans to create a mini-Manhattan in

the Bandra-Kurla Complex (BKC). The

environment department has refused approval to

The Capital, a 19-storey commercial tower by

Raghuleela Leasing and Real Estates (promoted

by the Wadhwa Group) at BKC saying the Floor

Space Index (FSI) granted to it is very high.

The project was being developed under the

MMRDA's global FSI concept. The panel has

questioned this concept and asked the state "to

discontinue it or put a 'reasonable' cap on FSI

granted".

TDI LAUNCHES COMMERCIAL COMPLEX Hindustan Times (Delhi edition)

TDI group launched Emperor Square, a built up

SCO complex in TDI City, Kundli, just 2.5 km

from the Delhi border. This state-of-the-art

commercial structure has been conceptualized

as an up market commercial destination located

amidst serene landscapes with exclusive

recreation zones. It will have built-up office-cum-

17

retail units in sizes of 204 and 300 sq yd with

round-the-clock security, vitrified tiles flooring,

ample parking space and will house major retail

brands across all categories and offices of

leading business houses.

Speaking on the occasion, Sonia Kathuria, AVP

marketing, TDI Infrastructure Ltd, said, “We

have announced Emperor Square, a unique

SCO complex that will reinterpret the traditional

market places in India while giving high street

shopping pleasure to its customers. Located on

the main NH-1, it will serve the future business

needs of inhabitants of TDI city, Kundli as well

as neighboring areas.“

DLF’S MALL PROJECT HITS FRESH HURDLE IN CHENNAI Financial Chronicle

DLF has hit a roadblock yet again in its plans to

develop a mall-cum-multiplex in Chennai. The

company had entered into an agreement with

Madras Race Club (MRC) on December 20,

2006 to take over 5.56 acre on a 66-year lease

to promote a mall-cum-multiplex in Velachery,

south of Chennai.

NEXT YEAR, MUMBAI WILL SUPPLY A FOURTH OF INDIA’S OFFICE SPACE The Indian Express

Mumbai, the world’s fourth most expensive

office market, is expected to account for 25

percent of the fresh office realty supply in the

country in 2011-12. A significant 17-18 million sq

ft of supply will be added to the Mumbai office

space market despite high vacancy rates in the

existing stock of 47 million sq ft, says a report by

commercial real estate services firm CB Richard

Ellis.

CITYMAX OPENS FUN PARK The Hindu Business Line

Citymax, the hospitality and entertainment arm

of the Dubai-based retailer Landmark,

announced the opening of its 13th Funcity in the

IT hub of Hyderabad at Inorbit mall, and outlined

plans to significantly expand its presence in the

country. Located in a 25,000-sq.ft facility in the

mall, the amusement centre offers six lane

bowling, 80 games, family rides, modular play

and fun for kids. The company, which has

invested about Rs 10 crore in the facility here, is

planning to expand this by offering games for

those in the age group of 13 to 18 years later.

The President of Citymax of Landmark Group,

Manish Tandon, said that the chain plans to add

three more centers by March 2011 and double

this by 2012.

NOIDA TO GET DELHI 1 Financial Chronicle

Real estate firm The 3C Company has

announced a mixed-use project christened

‘Delhi One’ at Sector-16B, Noida. This project

incorporating residential, commercial, retail and

hospitality zones will be spread across 5 acre.

The company along with private equity firm Red

Fort Capital will develop this project, which has

an estimated sales value of Rs 5,000 crore.

Apart from announcing Delhi One, the company

also launched a residential project ‘Lotus 300’,

which be situated at Sector 107, Noida. With

boundaries sprawling over 10 acre, Lotus 300

will offer only 300 condominiums.

While the company said price for the Lotus 300

condos ranges between Rs 1.82 crore and 2.6

crore, they said the pricing of Delhi One has not

been finalized as yet.

18

RENTING, BUYING OPPORTUNITY IN OFFICE SPACE; PRICES LIKELY TO RISE Mint

The current market scenario seems just right for

those looking for office space for their

businesses. In fact, they should hurry if the

reports by property consultants DTZ

International Property Advisors and BNP

Paribas Real Estate and Infrastructure Advisory

Services Pvt. Ltd are anything to go by. Both the

reports predict an increase in prices of office

space over the next one year.

According to the DTZ report, titled Indian Office

Occupiers Survey-December 2010, office

market rental rates will increase by 10-15

percent across prime markets of National

Capital Region (NCR), Bangalore and Mumbai

over the next one year. “The signs of rental

strengthening are now more visible and rents

across the three cities are expected to grow

from this point,” says Agarwal. The time is ripe

even for those who want to invest in office

space. There is good appreciation potential for

those who can invest at the current price levels.

In NCR, there is an estimated demand of 4

million sq. ft and it is likely to be met in the next

six to nine months, according to BNP Paribas

Real Estate City Report.

LACK OF INTEREST IN COMMERCIAL SPACE DESPITE HUGE INVESTMENTS Mint

Despite huge investments by builders in

residential projects across India, many areas in

major cities are lying vacant due to lack of

interest in the commercial front space, according

to industry body Construction Real Estate

Developers of India (CREDAI).

“While 12 million square feet is lying idle in

Chennai, it will be more across the country.

Many areas in Hyderabad, Bangalore and

Gurgaon are lying vacant in commercial

spaces,” CREDAI national vice-president

Prakash Challa told the news agency.

UP CABINET GIVES NOD FOR MORE MULTIPLEXES The Times of India

Giving fresh entertainment avenues in the state

a shot in the arm, the Uttar Pradesh cabinet

approved a proposal to set up more multiplexes

in the state. According to estimates, the decision

in this regard is likely to generate additional

revenue in the range of Rs 10 to Rs 20 crore per

annum for the state exchequer.

Under the scheme, multiplexes that are built in

Noida and Greater Noida will get 100 percent

entertainment tax waiver in the first year, 75

percent in second and third years and 50

percent in 4th and 5th years of their

establishment. From the sixth year, multiplexes

will be required to pay 100 percent

entertainment tax to the government.

Residential

VGN LAUNCHES RESIDENTIAL PROJECT The Hindu

VGN Developers, a leading real estate

developer based in Chennai announced the

launch of ‘Brixton”, a contemporarily designed

residential project. The project, coming up at

Irungattukottai on the outskirts of Chennai, will

have 1,872 housing units. The cost of the project

is estimated at Rs. 400 crore.

19

SOBHA IVORY IN KONDHWA Financial Chronicle

Sobha Developers has launched its new luxury

apartment project, Sobha Ivory at Kondhwa,

Pune. Spread over 3.8 acres, the 3BHK

apartment housing project would comprise of a

total of 140 units with basement, ground floor,

and covered car parking plus 11 floors with RCC

framed structure with concrete block masonry

walls. This project is expected to be completed

by the second quarter of 2013.

MARG LAUNCHES SMART AFFORDABLE HOMES The Hindu

MARG Properties, the real estate arm of MARG,

has come up with a smart, affordable homes

project, ‘Brindavan', located on the industrial belt

between Sriperumbudur and Oragadam.

Addressing presspersons here, Oscar

Braganza, executive director, (Real Estate &

SEZ) MARG group, said the project would

feature 14 blocks with 14 levels of 12 apartment

units in each floor, making a total of 2,184 units

at an introductory price of Rs. 1999 per sq. ft.

GODREJ PROPERTIES TO DEVELOP RS 450-CRORE PROJECT AT MOHALI The Hindu Business Line

Godrej Properties Ltd (GPL), the real estate arm

of Godrej Group, has said that it would develop

a residential housing project at Mohali in Punjab,

which could involve a capital outlay of Rs 450

crore. Besides, the company would also focus

on several cities, including NCR, Mumbai,

Bangalore, Pune, Chennai and Chandigarh for

developing a slew of residential projects in line

with its plans to cash in on the growing demand

for housing from the urban sector.

EMAAR MGF PLANS 200 LUXURY VILLAS IN GURGAON The Indian Express

Realty major Emaar MGF has said it would

develop 200 luxury villas in Gurgaon, which

would generate a revenue of at least Rs 900

crore to the company. The company would sell

these villas in the price range of Rs 4.5 crore to

Rs 8.5 crore, Emaar MGF said in a statement.

The project ‘Marbella’ will be spread over 110

acre. Emaar MGF, which plans to raise Rs 1,600

crore through initial public offer (IPO), is

presently developing 33 housing projects across

the country.

SIKKA GROUP LAUNCHES NEW PROJECT The Indian Express

After its residential project Sikka Karmic Greens,

Sikka Group has now launched its new

residential venture, Sikka Karnam Greens. The

project is planned for Noida Sector 143-B, close

to the FNG and the Noida Expressway, as well

as the proposed Metro Line. The residential

project is to have 2, 3 and 4 bedroom flats

besides studio apartments. The apartments

have a built-up area ranging from 590 sq ft to

1920 sq ft, at prices starting from Rs. 15.99 lakh.

PIYUSH GROUP PLANS PROJECT IN DHARUHERA The Indian Express

The Piyush Group has announced the launch of

its new project, Piyush Horizon in the business

and manufacturing hub of Dharuhera in NCR.

The housing project is spread over 7.75 acres,

and has 2 BHK (1,150 sq ft) and 3 BHK (1,500

sq ft) residential apartments. Prices for these

apartments have been announced as Rs 1,750

per sq ft.

20

AFFORDABLE HOMES The Times of India (Chennai edition)

Marg ProperTies has launched Brindavan -

about 2,184 smart affordable homes near

Sriperumbudur and Oragadam at an introductory

price of Rs1,999 per sq ft for 2-bedroom flats

spread across 611 sq ft. All the units in this

project will be 100 percent Vaastucompliant.

CHINTELS INDIA TO INVEST RS 310 CRORE ON GROUP HOUSING PROJECT The Hindu Business Line

Realty firm Chintels India said it would invest

about Rs 310 crore over the next three years to

develop a residential project that will have over

550 apartments in the National Capital Region.

“This project will be developed in a location next

to our ongoing township with Sobha Developers

at Gurgaon. We will invest about Rs 205 crore in

construction work of this group housing project,”

Chintels India Joint Managing Director Prashant

Solomon said. The company has already

acquired 12.3 acres of land for Rs 103 crore, he

added.

KALINA LUXURY HOUSING COMPLEX IN TROUBLE Hindustan Times (Mumbai edition)

A posh under-construction housing complex,

RNA Address, a premium residential complex in

Kalina, is caught in a controversy because it has

allegedly violated development control rules.

The Maharashtra Housing and Area

Development Authority (Mhada), the owner of

the11,444 square-metre plot on which the

complex is being constructed, has asked the

BMC to stop illegal construction on the plot.

Mhada has written to the BMC objecting to the

developer’s act of digging are creation ground

without permission.

TATA HOUSING'S SUBSIDIARY ANNOUNCES NEW PROJECT AT VASIND Business Standard

Smart Value Homes, a 100 percent subsidiary of

Tata Housing Development Company,

announced the launch of New Haven -- a hill

township at Vasind in Thane district.

PHOENIX HODU PLANS RS 450-CRORE TOWNSHIP Business Standard

Hyderabad-based Indo-Isreal joint venture

company Phoenix Hodu Developers Pvt Ltd is

planning to commence real estate development

projects in Chennai.

MANTRI SET TO ALTER BANGALORE SKYLINE Financial Chronicle

Bangalore-based Mantri Developers has

launched a luxury project, which the company

claims will be the tallest residential tower in

south India and is set to change the skyline of

Bangalore. Mantri Pinnacle, which is located at

Bannerghatta Road, is a 46- storyed tower with

133 residences. The project will comprise 3, 4, 5

BHK apartments and penthouses.

NITESH ESTATES LAUNCHES RS 300 CRORE PROJECT IN GOA The Hindu Business Line

In a bid to grab a substantial share of the

growing luxury real-estate market, leading

developer Nitesh Estates has launched a Rs

300 crore high-end villa project in Goa.

21

International architects CPG and interior design

firm Warner Wong have designed the project,

Nitesh Fisher Island, targeted at premium-end

customers.

To be developed across 9.3 acres in the

picturesque landscape of Goa, the project would

have 36 luxury villas and will be completed in

two to three years, the company said.

MANGALORE TO GET 35-FLOOR LUXURY RESIDENTIAL PROJECT The Hindu Business Line

Mangalore is all set to receive one of the tallest

residential projects in Karnataka with the

Mumbai-based SKS Netgate Pvt Ltd launching

its 35-floor project ‘Planet SKS'. Shashi Kiran

Shetty, chairman and managing director of SKS

Netgate Pvt Ltd, said that the Rs 150-crore

mega housing project would be launched on

4.25 acres of land near Kadri Park in Mangalore.

The project will be completed on schedule within

48 months, he said.

Once completed, the 375-feet tall three-wing

structure will comprise 184 three to four

bedroom units with 412 covered car parks for

the residents and 30 for the visitors. Each

residential unit from 26th floor will have lap pool

facility also. Planet SKS will feature a rooftop

helipad, he said.

SMALL LUXURY HOTELS SPREADS WINGS The Economic Times (Kolkata edition)

Small Luxury Hotels of the World, which

comprises over 520 hotels in more than 70

countries, including 13 properties across India,

has expanded its portfolio in the country with the

addition of Chrome Hotel, its first property in

Kolkata. Chrome Hotels is a part of the

Chocolate Group of Hotels and is steered by

CEO Deval Tibrewalla. The group is in

expansion mode, scouting for properties across

the country.

43 PERCENT RESIDENTIAL SALES IN CITY FLAGGED ARTIFICIAL: REPORT The Indian Express

In what could possibly be seen as signs of a

realty market teetering on its edge, a recent

research report shows that as much as 43

percent of the residential sales in Mumbai has

been flagged as “artificial”.

The report by the realty research agency Liases

Foras states that in July-September 2010, 43

percent of the total sales in the Mumbai

Metropolitan Region (MMR) came from projects

“having suspiciously high pre-launch sales

feared to be artificial in nature. Such stock may

have been transferred to the investors and

remains likely to resurface in the market”. Just a

year ago, such sales amounted to only 12

percent of the total, according to the report.

AFFORDABLE HOUSING NEED OF THE HOUR Mint

There has been a flurry of launches in the

premium category in recent months. However,

the pace is likely to slacken in the near future,

indicates a Mint Money-Makaan.com survey.

A joint report by property consultants Jones

Lang LaSalle (JLL) and consultancy firm KPMG

India corroborates the findings. Between July

and September, the share of launches in the

premium category went up compared with that in

the period between April and June, the JLL-

KPMG report says. “Banking on the tremendous

response over residential sales in the lower

22

capital value segment, several developers

began launching premium residential projects by

the end of 2010. This was accompanied by a

rise in property rates across cities. Due to the

impact of rising prices, absorption rates have

eventually wilted,” says the report. Mint Money

along with property portal and brokerage firm

Makaan.com conducted a nationwide survey

around eight cities (Delhi, Mumbai, Chennai,

Bangalore, Hyderabad, Pune, Ahmedabad and

Kolkata) and incorporated responses from 4,597

participants. The maximum number of

respondents is between 25 and 45 years of age;

the survey spans across the age group of 18 to

55 years and above.

Even though builders have been focusing on the

premium category, the demand is still

predominant in the affordable category,

indicates the survey. City-wise, only Mumbai has

the highest number of people who would buy

property that is priced above Rs. 1 crore. Says

Aditya Verma, chief operating officer,

Makaan.com: “It is probably because the

Mumbai market is costliest in India and

comprises genuine end-user demand.”

A look at the city-wise data shows that except in

Delhi (63 percent) and Mumbai (48 percent), a

majority of respondents in tier II metro cities

such as Bangalore (83 percent), Chennai (71

percent) and Hyderabad (79 percent) prefer to

buy apartments under Rs. 40 lakh.

PROPERTY SALES PLUMMET IN MUMBAI The Financial Express

Owing to fewer launches of projects and the

period of 'Shraadh', sales registrations of

property in Mumbai witnessed a sharp decline in

the month of November, which is the lowest

since March 2009, a survey report said.

According to the report, the decline started since

August 2010 and has been the steepest in

November.

"November 2010 has been the first month of

decline in the past 17 months, which has been

rather sharp at 19 percent," a report indicated.

According to the survey report by Prabhudas

Lilladher, Mumbai's real estate sector witnessed

a steep decline in the overall registration of

properties in November to 14,680 units.

INVESTORS SELLING FLATS AT DISCOUNTS Hindustan Times

Expecting realty rates to fall soon, individual

investors have started selling their properties at

discounted rates. Property brokers are being

flooded with calls from investors offering rebates

of 10 to 30 percent on their properties. “We have

advised our investors to exit at the earliest and

book maximum profits because prices will come

down anytime,” said Ram Prasad Padhi, chief

executive officer, mumbaiproperties.com, a

brokerage firm.

Padhi said investors have been advised to

reinvest in property after markets come down.

Investors have played a major role in the realty

market in the last three years because they have

cornered more than 50 percent of the properties

booked during the period.

MUMBAI REALTY RATES SET TO SEE SOME PRICE CORRECTION IN 2011 The Economic Times

After a year, which has seen, sustained

momentum in property prices, 2011 is likely to

be a challenging one for realty developers.

Mumbai, the country’s financial capital, is

expected to lead a fall in property prices owing

23

to buyers’ resistance to higher prices, rising

interest rates, tightening of credit to developers

and excess supply.

A fall in the number of transactions that started

in October is now likely to be now followed by a

cut of around 15 percent in Mumbai residential

prices next year. After gaining nearly 40 percent

in the last one year, realty prices in Mumbai

have already surpassed their last peak seen in

2007. But, interest rates that have started

moving higher are impacting affordability and

delaying decision making, and all of this is not

allowing demand to get converted into sales

since last two quarters.

“Last two months have seen interest in Mumbai

and Gurgaon realty markets easing sharply.

Next year one can expect 10-15 percent fall in

realty rates. Most of this correction is likely to

take place between April-September," said

Kaustuv Roy, executive director of realty

services firm Cushman & Wakefield.

“Banks are not going to be sympathetic about

loans (to developers), IPOs are not a good idea

as of now, sales are not taking place, where

does one get the required funds from?

Ultimately, developers will have to offload their

inventory at lower prices,” said Pranay Vakil,

chairman, Knight Frank India. He expects realty

prices to ease around 15 percent in next three

months. However, he refused to take a call on

likely scenario for the entire year.

NEW HOME SALES FALL 25 PERCENT: KNIGHT FRANK The Financial Express

New home sales fell as much as 25 percent

after prices reached a record earlier this year

and aren’t expected to recover in the next six

months following six interest rate increases,

Knight Frank LLP said. “The first half of next

year will be damp for home sales and prices,”

Mumbai-based Anand Narayanan, national

director of residential agency at the Indian unit of

real-estate brokerage Knight Frank, said. “We

could see a 5 percent correction in prices

through incentives given by builders to woo

customers.”

AKSHAYA HOMES LAUNCHES NEW PROJECT The Hindu

Akshaya Homes has launched a new residential

project, January, on the OMR corridor. Spread

over 5.28 acre, it will have 688 contemporarily

designed houses. In a release issued here, T.

Chitty Babu, Chairman and CEO, said the

project, with its 14-storey sky high building,

would have a futuristic clubhouse with all the

amenities. The one, two and three BHK

apartments ranging from 605 sq. ft. to 1,400 sq.

ft. would be a mix of eco-friendly and modern

elements. The unit cost starts from Rs. 19 lakh

onwards.

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About Avendus Capital

CONTACT DETAILS

Chirag Bagai | +91 22 6648 0977 | chirag.bagai@avendus.com

Seema Rao | +91 22 6648 0963 | seema.rao@avendus.com

Ajay Kumar | +91 22 6648 0964 | ajay.kumar@avendus.com

OUR OFFICES

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Avendus Capital (Avendus) is a leading financial

services firm with a strong transaction record and

established relationships with companies and

investors. Avendus has been consistently ranked

among the top-five corporate finance advisors in India.

The firm is also a leading syndicator of private equity

deals in India.

Avendus uses its unique domain and industry-

focused approach in businesses such as M&A

advisory, private placements for growing companies,

structured finance advisory, equity capital markets,

institutional equities, alternative asset management

and wealth management. Avendus has emerged as

the advisor of choice for cross-border M&A deals—23

Indo-US and Indo-Europe deals—in the past three

years. Headquartered in Mumbai, Avendus has

offices in New Delhi, Bangalore, New York and

London.