Monday, May 25, 2009
Govt. to insulate economy from global crisis, says Pranab
Govt. to insulate economy from global crisis, says Pranab
The Financial Express, May 23, 2009, Page 2
Press Trust of India
The priority before the new government would be bringing the economy back on rail while insulating it from the impact of the global financial crisis, senior most Cabinet minister Pranab Mukherjee said on Friday. “Of course, we shall have to prioritise. The economy has to be brought back on rail...(we have) to insulate (the economy) from adverse effect of financial crisis,” he told reporters at his residence after the swearing-in ceremony.
Mukherjee is tipped to get the much sought after finance portfolio.
All the economic matters will receive due attention of the government, Mukherjee said, adding that the new government will present the Budget for 2009-10 in due course.
The Congress manifesto has promised to present the Budget within 45 days of government formation. The interim budget passed earlier enabled the government to run its expenditure till July 31 only. On pending financial sector reforms like pension, banking and insurance reforms, the minister said, “I am not going to make any comment on any policy statement... Let the portfolios be announced formally. After that I will have a full-fledged observation of various aspects.”
100-day timeline to infuse momentum: Kamal Nath
100-day timeline to infuse momentum: Kamal Nath
The Financial Express, May 23, 2009, Page 2
Press Trust of India, New Delhi
Prime Minister Manmohan Singh has set a 100-day time limit for infusing “new momentum” into the administration with a focus on bringing “revolution” in the agriculture sector, senior Cabinet minister Kamal Nath said on Friday.
“The young generation will get opportunities for employment and a new momentum will be infused in the administration... because the Prime Minister has set a 100-day time limit,” Nath told reporters after he was sworn in as a Cabinet minister for the second consecutive term.
The Prime Minister has declared a 100-day programme for taking concrete steps and agriculture deserves to be given the utmost priority.
“Such steps will be taken in agriculture so as to bring a revolution in the sector,” he said.
Nath, who held the commerce and industry portfolio in his earlier stint, said the government would come out with a concrete policy to tackle the impact of global slowdown on
Indian economy which should grow by at least 8 %.
He said it was essential that the government took steps for revival of domestic demand and investment because India could not remain unaffected by the global recession.
The Financial Express, May 23, 2009, Page 2
Press Trust of India, New Delhi
Prime Minister Manmohan Singh has set a 100-day time limit for infusing “new momentum” into the administration with a focus on bringing “revolution” in the agriculture sector, senior Cabinet minister Kamal Nath said on Friday.
“The young generation will get opportunities for employment and a new momentum will be infused in the administration... because the Prime Minister has set a 100-day time limit,” Nath told reporters after he was sworn in as a Cabinet minister for the second consecutive term.
The Prime Minister has declared a 100-day programme for taking concrete steps and agriculture deserves to be given the utmost priority.
“Such steps will be taken in agriculture so as to bring a revolution in the sector,” he said.
Nath, who held the commerce and industry portfolio in his earlier stint, said the government would come out with a concrete policy to tackle the impact of global slowdown on
Indian economy which should grow by at least 8 %.
He said it was essential that the government took steps for revival of domestic demand and investment because India could not remain unaffected by the global recession.
Lull over, realty ready to roar again
Lull over, realty ready to roar again
Business Standard, May 25, 2009, Page 3
Raghavendra Kamath & Gautam Chakravorthy / Mumbai
As developers cut debt, offload assets and push sales, investors start trickling back
Investors and analysts have begun re-rating the realty sector on optimism that the worst may be over, as the efforts of recent months and a stable global environment will help developers attract funds and boost earnings.
Developers in the past year have restructured debt, sold non-core assets and tweaked product mix, helping to push up sales. This has encouraged investors to buy stocks of real estate companies and motivate analysts to revise price targets and upgrade the outlook on the sector.
“The stabilisation in the international market improved financials arising out of restructuring of loans and enhanced liquidity from banks have resulted in revision in the outlook for the sector,” said Dipesh Sohani, an analyst with MF Global, an equity brokerage. “The real estate players are better placed now than what they were two-three quarters before.”
Reflecting the positive sentiment, the Bombay Stock Exchange Realty Index rose 58 per cent in the past month, outpacing the benchmark Sensitive index’s gain of 27 per cent. Stocks of Unitech, DLF, Indiabulls Real Estate and HDIL have jumped 65 per cent, 41 per cent , 54 per cent and 146 per cent, respectively.
The turning point seems to have been the successful qualified institutional placement (QIP) of Unitech on April 16, at a time when very few companies dared to enter the market. The country’s second-biggest developer raised Rs 1,625 crore from the sale at Rs 38.50 apiece. The stock is now trading at Rs 71.25 on the Bombay Stock Exchange.
The renewed faith of overseas investors stems from the series of steps taken by developers to improve their financial position. Unitech has cut debt by Rs 2,000 crore while DLF, the country’s biggest developer, has repaid Rs 1,700 crore of loans in the past year. The two companies together have also restructured as much as Rs 4,100 crore worth of loans with commercial banks and mutual funds, avoiding short-term payment pressures.
Even commercial banks, which were hesitant to lend to developers, appear to be loosening a bit. According to Reserve Bank of India data, loans to real estate companies grew 61.4 per cent for the 11-month period ending February 2009, as compared to 26.7 per cent growth in the corresponding period last fiscal.
Home loan disbursements by the country’s top lenders, which signal the actual demand for homes, is also improving. HDFC, the country’s largest home loan lender, saw its disbursals going up by 17.5 per cent in the fourth quarter of FY09, at Rs 12,400 crore. While LIC Housing saw an increase of 42 per cent and 22 per cent in March and Q4 numbers, respectively.
“Liquidity has improved and their balance sheets are looking much better now,’’ said Shailesh Kanani, an analyst with stock brokerage, Angel Broking. “They were able to raise money during the current market conditions at lower valuations, which they were unwilling to do earlier.’’
A general softening of interest rates has also helped developers to cut their borrowing costs by as much as 300 basis points. Some of the developers’ average borrowing cost had risen to an astronomical 17 per cent.
“Significant loan restructuring and softening of interest rates have strengthened the balance sheet of real estate companies,’’ said S Subramanian, head of Investment Banking at Enam Securities.
Developers have also tweaked their product mix to improve cash flows. A global economic slowdown had halted sale of homes, offices and shops in the past year, creating a severe liquidity crunch for developers, who had relied on excessive debt to expand operations.
“Real estate is nothing else but managing cash flows,’’ explains Sohani. The exuberant demand for real estate in the bull-run had swayed developers into offering expensive products, for which there was no demand as the economy contracted.
To rectify the situation, developers have cut prices by as much as 40 per cent in key markets and also launched a series of residential projects, which were in the so-called affordable category. The change in strategy had a suitable impact.
DLF, which launched its new housing project in Gurgaon/Noida, sold out almost 85 per cent of its residential units on offer in the first two days of sale. Unitech has sold out almost 2,100 homes in the past two months.
Overseas investors watched these developments with keen interest and lapped up stocks of realtors when they entered the market to raise funds. After the success of Unitech’s QIP issue, which was subscribed more than two times, DLF increased shares it had put up for sale by 68 per cent after it got a strong response from institutional investors. Similarly, Indiabulls Real Estate’s $553 million QIP issues was subscribed by only three overseas funds, including HSBC, Texas Pacific Group and Fidelity.
Analysts are now becoming more bullish. Many of them have begun re-rating the stocks of real estate companies which have cut debt and infused liquidity in the company either through asset sales or share sales to investors.
International brokerage Credit Suisse has changed its rating on Unitech to ‘outperform’ from ‘underperform’, with a revised price target of Rs 80, compared to Rs 26 earlier. Another brokerage, Alchemy, has also revised th price target of Unitech to Rs 80 from Rs 25 it set in December last year.
“Stocks were beaten down sharply due to negative sentiments in the market due to fall in realty prices and volumes. Now when momentum is up, I am not surprised if the stocks were revalued by two and two-and-half times,’’ said Ramashraya Yadav, head of strategy at Mumbai-based Orbit Corporation.
Analysts are now watching the new year with optimism. “Unlike in the past year, survival of developers is no longer an issue in the immediate future. The focus has now shifted to earnings growth,’’ Sohani said.
Adding to the positive sentiment was the return of the Congress-led United Progressive Alliance to power, which meant greater stability at the Centre and positive long-term policy measures.
“A stable government at the centre with a decisive mandate would encourage more FDI/FII/ domestic investments in real estate. Continuation of policy measures should also lead to increased buyer confidence triggering a recovery in demand in the second half of FY10,’’ international brokerage Credit Suisse said in a recent report.
The stability factor had a partial rub-off on the Indiabulls Real Estate QIP issue. The sale concluded in a day and some existing investors such as Fidelity and HSBC increased their stake in the company.
Taking advantage of the upsurge in the market, some investors such as Fidelity and JP Morgan, who had bought into the sector at higher levels, began partially liquidating their holdings. The FII sold Rs125 crore worth of shares in Indiabulls Real Estate.
But a section of FIIs, who are bullish on the India, warn against the move. “The temptation of investors to sell shares in the rally is a mistake. The dramatic re-rating of the Indian market is set to continue,” BNP strategists led by Singapore-based Clive McDonnell wrote in a report.
Realty needs to link policy, research and practice for an integrated approach to sustainable development
Realty needs to link policy, research and practice for an integrated approach to sustainable development
The Financial Express, May 25, 2009, Page 5
sachin sandhir
Floods, droughts, climate change and global warming are disturbing facts in today’s world. The causes? Rapidly increasing urbanisation, carbon emissions and other greenhouse gases. Let's face the reality. The earth’s capacity to sustain its human population and current lifestyle is finite. Climate change is a reality and the property sector needs to prepare for the changes it will bring. And the only way forward is to pursue sustainable development. Most aptly defined by Brundlandt Report in 1987, sustainable Development is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.
Real estate development uses about 40% of the energy and is probably the largest contributor to global pollution emissions and global warming, bringing the sector in the forefront of the shift towards sustainability. The magnitude is big. It’s estimated that 76% of the electricity generated by all power plants is consumed by buildings. Nearly 35% of the energy consumed in a building is because of the use of light in the day time.
Certainly this is something we can change if we think collectively about the big picture. The result? It will result in approximately 30-40% of potential savings in the energy consumed. According to Teri, the projected annual increase in energy demand, with no improvements in energy-efficiency, would be 5.4 billion kWh. The application of energy-efficient building design concepts, techniques and technologies in new construction can save about 2 billion kWh annually, representing an annual saving of Rs 30 billion at current prices.
There is a sense in which all new buildings may be expected to address sustainability, although there may be little accord on what constitutes a sustainable building and how it is to be measured. Quantifying this phenomenon popularly known as the green building is relatively new to India. And that is where standard measurement tools such as LEED and GRIHA prove valuable and serve as a starting point.
CII along with IGBC (Indian Green Buildings Council) pioneered the sustainability movement in 2001 and they have successfully customised and established LEED energy rating standards for construction projects. Last year, they expanded this initiative by launching the rating system for green homes. A home grown rating system known as Green Rating for Integrated Habitat Assessment (GRIHA) by Teri is also gaining popularity after being endorsed by the Ministry of New and Renewable Energy in late 2007.
While there are a handful of certified green buildings in India, each one is proof of the benefits it brings. Take, for example, the new IT Park by Tata Housing (certified as LEED Gold) that boasts of 26.6% savings on air-conditioning power and cooling costs and 34.1% saving on water supply.
So, why are so few sustainable buildings being designed, built or retrofitted? Why is sustainable property investment and management not getting mainstreamed? What are the drivers of this process and what are the barriers? Does sustainable property investment really pay off or are property investors simply doing it to show their green credentials? Are consumers sufficiently informed about the respective merits of the options open to them, and do they actually value sustainability as an attribute when making property related decisions? These are the questions we should be asking ourselves.
The knowledge and the technologies needed to produce sustainable buildings are available. The economic benefits of sustainable design and construction are now somewhat documented. However, what is standing in the way is the misalignment of incentives between the providers of buildings and those who are going to invest in or occupy buildings. This has become a vicious circle of blame.
It is a circle where investors claim they would fund more sustainable development if the market asked for them; end users would like sustainable buildings but few are available; designers would build in a sustainable way but developers don’t ask for it and developers in turn complete the cycle by claiming they would provide such buildings only if investors were willing to pay for them.
It’s time to investigate why everyone involved -- investors, developers, constructors, tenants -- pass the responsibility onto someone else. As we are yet to have extensive research available for the Indian market, the findings of a survey conducted by RICS in 2007 (based on nearly 50,000 RICS members across the US, Europe and rest of the world) has some insights to offer. Nearly 70% of respondents consider ‘lack of knowledge of available tools and techniques’ and ‘lack of expertise’ as the two most important barriers to uptake of sustainability measurement tools. Other important barriers cited by respondents include cost (50%), lack of time (45%), difficult to access (45%) and no client demand (44%).
To break this circle of blame, what the real estate sector requires is an integrated approach to sustainable development linking policy, research and practice. Increasing awareness among users registering for green building certification, industry stakeholders and government initiatives point in the right direction. What would probably facilitate the sustainability movement is some substantial evidence between property value and sustainability in terms of higher rents, attracting tenants and reducing costs.
Incidentally, a cost-benefit analysis of US Green Office Buildings, undertaken by RICS, looked at the impact on the selling prices of green buildings and concluded a premium in the order of 16%, implying that upgrading the average non-green building to a green one would increase its capital value by that much.
Sustainable development needs a clear vision for credible sustainable future and to improve the quality of life for all involved. A building as a power station producing its own energy is the future that visionaries of the west have predicted.
—The writer is managing director & country head of RICS India, a membership organisation for land property and construction professionals
The Financial Express, May 25, 2009, Page 5
sachin sandhir
Floods, droughts, climate change and global warming are disturbing facts in today’s world. The causes? Rapidly increasing urbanisation, carbon emissions and other greenhouse gases. Let's face the reality. The earth’s capacity to sustain its human population and current lifestyle is finite. Climate change is a reality and the property sector needs to prepare for the changes it will bring. And the only way forward is to pursue sustainable development. Most aptly defined by Brundlandt Report in 1987, sustainable Development is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.
Real estate development uses about 40% of the energy and is probably the largest contributor to global pollution emissions and global warming, bringing the sector in the forefront of the shift towards sustainability. The magnitude is big. It’s estimated that 76% of the electricity generated by all power plants is consumed by buildings. Nearly 35% of the energy consumed in a building is because of the use of light in the day time.
Certainly this is something we can change if we think collectively about the big picture. The result? It will result in approximately 30-40% of potential savings in the energy consumed. According to Teri, the projected annual increase in energy demand, with no improvements in energy-efficiency, would be 5.4 billion kWh. The application of energy-efficient building design concepts, techniques and technologies in new construction can save about 2 billion kWh annually, representing an annual saving of Rs 30 billion at current prices.
There is a sense in which all new buildings may be expected to address sustainability, although there may be little accord on what constitutes a sustainable building and how it is to be measured. Quantifying this phenomenon popularly known as the green building is relatively new to India. And that is where standard measurement tools such as LEED and GRIHA prove valuable and serve as a starting point.
CII along with IGBC (Indian Green Buildings Council) pioneered the sustainability movement in 2001 and they have successfully customised and established LEED energy rating standards for construction projects. Last year, they expanded this initiative by launching the rating system for green homes. A home grown rating system known as Green Rating for Integrated Habitat Assessment (GRIHA) by Teri is also gaining popularity after being endorsed by the Ministry of New and Renewable Energy in late 2007.
While there are a handful of certified green buildings in India, each one is proof of the benefits it brings. Take, for example, the new IT Park by Tata Housing (certified as LEED Gold) that boasts of 26.6% savings on air-conditioning power and cooling costs and 34.1% saving on water supply.
So, why are so few sustainable buildings being designed, built or retrofitted? Why is sustainable property investment and management not getting mainstreamed? What are the drivers of this process and what are the barriers? Does sustainable property investment really pay off or are property investors simply doing it to show their green credentials? Are consumers sufficiently informed about the respective merits of the options open to them, and do they actually value sustainability as an attribute when making property related decisions? These are the questions we should be asking ourselves.
The knowledge and the technologies needed to produce sustainable buildings are available. The economic benefits of sustainable design and construction are now somewhat documented. However, what is standing in the way is the misalignment of incentives between the providers of buildings and those who are going to invest in or occupy buildings. This has become a vicious circle of blame.
It is a circle where investors claim they would fund more sustainable development if the market asked for them; end users would like sustainable buildings but few are available; designers would build in a sustainable way but developers don’t ask for it and developers in turn complete the cycle by claiming they would provide such buildings only if investors were willing to pay for them.
It’s time to investigate why everyone involved -- investors, developers, constructors, tenants -- pass the responsibility onto someone else. As we are yet to have extensive research available for the Indian market, the findings of a survey conducted by RICS in 2007 (based on nearly 50,000 RICS members across the US, Europe and rest of the world) has some insights to offer. Nearly 70% of respondents consider ‘lack of knowledge of available tools and techniques’ and ‘lack of expertise’ as the two most important barriers to uptake of sustainability measurement tools. Other important barriers cited by respondents include cost (50%), lack of time (45%), difficult to access (45%) and no client demand (44%).
To break this circle of blame, what the real estate sector requires is an integrated approach to sustainable development linking policy, research and practice. Increasing awareness among users registering for green building certification, industry stakeholders and government initiatives point in the right direction. What would probably facilitate the sustainability movement is some substantial evidence between property value and sustainability in terms of higher rents, attracting tenants and reducing costs.
Incidentally, a cost-benefit analysis of US Green Office Buildings, undertaken by RICS, looked at the impact on the selling prices of green buildings and concluded a premium in the order of 16%, implying that upgrading the average non-green building to a green one would increase its capital value by that much.
Sustainable development needs a clear vision for credible sustainable future and to improve the quality of life for all involved. A building as a power station producing its own energy is the future that visionaries of the west have predicted.
—The writer is managing director & country head of RICS India, a membership organisation for land property and construction professionals
PEs come back to realty sector
PEs come back to realty sector
The Economic Times, May 24, 2009, Page 6
Anand Rawani & Raja Awasthi NEW DELHI
WITH the stockmarkets set on the path to recovery and top realty companies such as DLF and Unitech managing to raise funds to bridge their debts, money has started trickling into the Indian realty sector that had tanked in September 2008 after years of a joy ride.
Private equity players, who had virtually vanished from the realty frame, are now returning with domestic funds taking the lead, say a clutch of real estate lenders and funds that SundayET spoke to. According to some of the most optimistic projections, the Indian realty market will attract Rs 10,000 crore to Rs 12,000 crore in the next 12 to 18 months.
“We have already entered into two deals and expect to close them within the next couple of months,” says.
Subhash Bedi, MD of Red Fort Capital, a real estate private equity. Mr Bedi says that most of the international funds dedicated to the sector have packed up, but local firms sitting on cash piles have started to take a relook at the sector.
Says Kaustuv Roy, ED of Cushman & Wakefield, a realty consultancy: “There has been a movement as far as funds to the realty companies are concerned. While nothing much was happening between July and December 2008, in the last couple of months, almost every real estate fund has become active and is aggressively looking at good projects for investing.”
This new interest, however, comes with riders. Funding is mostly on a project-to-project basis, and most of the investments are through special purpose vehicles. “The market is improving and there has been a pick up in sales over the last three months, many institutional financiers and PEs are showing interest but they are keen on working on a project-to-project basis,” agrees Rohtas Goel, CMD, Omaxe Group.
Kotak Realty Fund, a prominent player in the sector is looking to deploy around Rs 3,000 crore in the next two years in the Indian realty sector. “We are looking at a couple of transactions in this quarter and are more interested in the residential space,” says CEO S Sriniwasan.
These institutional investors are now mainly looking at the residential space. In fact, both the deals, where Red Fort Capital made investment, are in the residential segment. Ritesh Vohra, director at Saffron Asset Advisors, a private equity fund operating in the real estate sector, adds that they are in search of good projects for investment during this quarter.
In addition to PEs, other financial institutions have also begun to spot opportunities to deploy funds. Indiabulls Financial Services is also said to be evaluating several projects for investment. On a sober note, Anshuman Magazine, CMD of CB Richard Ellis (South Asia) feels that despite the improvement in sentiments, it may take some time for actual deployment of the money.
The Economic Times, May 24, 2009, Page 6
Anand Rawani & Raja Awasthi NEW DELHI
WITH the stockmarkets set on the path to recovery and top realty companies such as DLF and Unitech managing to raise funds to bridge their debts, money has started trickling into the Indian realty sector that had tanked in September 2008 after years of a joy ride.
Private equity players, who had virtually vanished from the realty frame, are now returning with domestic funds taking the lead, say a clutch of real estate lenders and funds that SundayET spoke to. According to some of the most optimistic projections, the Indian realty market will attract Rs 10,000 crore to Rs 12,000 crore in the next 12 to 18 months.
“We have already entered into two deals and expect to close them within the next couple of months,” says.
Subhash Bedi, MD of Red Fort Capital, a real estate private equity. Mr Bedi says that most of the international funds dedicated to the sector have packed up, but local firms sitting on cash piles have started to take a relook at the sector.
Says Kaustuv Roy, ED of Cushman & Wakefield, a realty consultancy: “There has been a movement as far as funds to the realty companies are concerned. While nothing much was happening between July and December 2008, in the last couple of months, almost every real estate fund has become active and is aggressively looking at good projects for investing.”
This new interest, however, comes with riders. Funding is mostly on a project-to-project basis, and most of the investments are through special purpose vehicles. “The market is improving and there has been a pick up in sales over the last three months, many institutional financiers and PEs are showing interest but they are keen on working on a project-to-project basis,” agrees Rohtas Goel, CMD, Omaxe Group.
Kotak Realty Fund, a prominent player in the sector is looking to deploy around Rs 3,000 crore in the next two years in the Indian realty sector. “We are looking at a couple of transactions in this quarter and are more interested in the residential space,” says CEO S Sriniwasan.
These institutional investors are now mainly looking at the residential space. In fact, both the deals, where Red Fort Capital made investment, are in the residential segment. Ritesh Vohra, director at Saffron Asset Advisors, a private equity fund operating in the real estate sector, adds that they are in search of good projects for investment during this quarter.
In addition to PEs, other financial institutions have also begun to spot opportunities to deploy funds. Indiabulls Financial Services is also said to be evaluating several projects for investment. On a sober note, Anshuman Magazine, CMD of CB Richard Ellis (South Asia) feels that despite the improvement in sentiments, it may take some time for actual deployment of the money.
Realty builds on stability theme
Realty builds on stability theme
The Economic Times, May 24, 2009
Neha Dewan, ET Bureau
A stable government indicates a glimmer of hope for the real estate sector, feel a number of realty developers and consultants. Affordable housing will get an impetus and sentiments are bound to improve, according to them.
Navin M Raheja, MD, Raheja Developers says that the coming of a stable government means that the real estate sector is poised for a bounce back and revival. "Formation of a stable government will certainly bring back the lost confidence among investors and end-users. Affordable housing will get all ears and accomplishment. There should be good news very soon that housing will be available for all the segments of society."
Like Mr Raheja, others too are of the view that affordability will gain prominence in the new government. "We expect that government will promote affordable housing in a more aggressive manner. We also hope that the government will announce special funds for building affordable corridors for needy sections of the society and give easy clearance for these projects," says Rohtas Goel, CMD, Omaxe.
Besides affordability, some feel that there is a clarion call for key issues to be addressed. Since the real estate sector has not fared well over the past year, they feel that a lot more proactiveness will be required to make it recover.
"The new regime will need to address the serious infrastructural deficit in our metros, as well as that in many short-changed Tier II/III cities. We are hoping for measures to make construction of mid-to-low income housing attractive to developers, an easement in procedures for the clearance of new projects and the clarification of the SEZ/STPI issue. Coupled with generalized efforts to boost the GDP, these measures will give the Indian real estate sector a badly-needed shot in the arm," feels Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj (JLLM).
Agrees Anshuman Magazine, chairman and MD, CB Richard Ellis, South Asia, who says that the outcome of the elections means continuity and more aggressive decisions to stimulate the economy. This, according to him, will have a direct impact on the real estate sector.
"We have already seen some movement in the market since last month and with these results, the sentiment will improve significantly. However the real estate industry is expected to remain slow this year and will continue to face challenges. A gradual movement towards improvement is however expected to begin soon enough," he says.
The Economic Times, May 24, 2009
Neha Dewan, ET Bureau
A stable government indicates a glimmer of hope for the real estate sector, feel a number of realty developers and consultants. Affordable housing will get an impetus and sentiments are bound to improve, according to them.
Navin M Raheja, MD, Raheja Developers says that the coming of a stable government means that the real estate sector is poised for a bounce back and revival. "Formation of a stable government will certainly bring back the lost confidence among investors and end-users. Affordable housing will get all ears and accomplishment. There should be good news very soon that housing will be available for all the segments of society."
Like Mr Raheja, others too are of the view that affordability will gain prominence in the new government. "We expect that government will promote affordable housing in a more aggressive manner. We also hope that the government will announce special funds for building affordable corridors for needy sections of the society and give easy clearance for these projects," says Rohtas Goel, CMD, Omaxe.
Besides affordability, some feel that there is a clarion call for key issues to be addressed. Since the real estate sector has not fared well over the past year, they feel that a lot more proactiveness will be required to make it recover.
"The new regime will need to address the serious infrastructural deficit in our metros, as well as that in many short-changed Tier II/III cities. We are hoping for measures to make construction of mid-to-low income housing attractive to developers, an easement in procedures for the clearance of new projects and the clarification of the SEZ/STPI issue. Coupled with generalized efforts to boost the GDP, these measures will give the Indian real estate sector a badly-needed shot in the arm," feels Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj (JLLM).
Agrees Anshuman Magazine, chairman and MD, CB Richard Ellis, South Asia, who says that the outcome of the elections means continuity and more aggressive decisions to stimulate the economy. This, according to him, will have a direct impact on the real estate sector.
"We have already seen some movement in the market since last month and with these results, the sentiment will improve significantly. However the real estate industry is expected to remain slow this year and will continue to face challenges. A gradual movement towards improvement is however expected to begin soon enough," he says.
Tata Housing building on the strength of low-cost homes
Tata Housing building on the strength of low-cost homes
The Hindu Business Line, May 25, 2009, Page 2
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The low-cost housing sector should be de-linked from real estate and be accorded infrastructure status. — Mr Brotin Banerjee, MD and CEO, Tata Housing
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S. Shanker , Mumbai
Tata Housing Development Company created waves recently when it announced its intention to build nearly 1,000 homes priced in the range of Rs 3.9-6.7 lakh.
The Nano homes, as they are popularly termed, got a flood of over 6,000 applications within a week of the announcement. The project will be commissioned in Boisar, 100 km from Mumbai, and planned as an integrated township.
In an interview to Business Line, Mr Brotin Banerjee, Managing Director and CEO, Tata Housing, talks about this plan in greater detail.
What was the starting point for this project?
Our initiative was not meant for making profits but work as a business model. There is a shortage of 24 million dwelling units in the country and I don’t think it is possible for the Centre and State governments to invest that kind of money for this purpose. It is only the private sector or a private-public participation that will work.
This game will be high in volume and comparatively lower in margin than the high-end formats.
If it is done in places where we have offices such as Delhi, Bangalore and Mumbai, the incremental cost as far as overheads is concerned will not be high.
Did market conditions prompt you to get into low-cost housing?
This company started in 1984 but, in many ways, was revived only in late 2005-2006 when an entire new management came onboard. It was not that market conditions forced us to go in for low-cost housing but it was what we would have done anyway.
You have allocated eight of the 63 acres for this initiative at Boisar. Will the balance area see high-end products?
We are not looking at high-end apartments but relatively higher compared to the low cost — a different product mix. We will have higher margins there but then these will not sell in two weeks.
How long will the entire project take given that landowners are partners?
We have a joint development arrangement with the landowners at Boisar.
In general, we do a mix of joint development, outright and joint venture. This project will take four years though the low-cost housing will be done in two.
Are you looking for land or would you prefer joint ventures as a business model?
We have about 100 offers from landowners from different cities but then all may not materialise as they would have to come to terms that margins will be lower in low-cost housing.
Would you be more inclined towards industrial hubs in Bangalore and Gurgaon for your next phase of low-cost projects?
These may come up in the other side of Bangalore, near Peenya. We try to look in between cities and industrial centres to provide relatively low-cost, and yet good quality living standards for people in industrial areas while attracting those living in crowded cities.
What must be done to give low-cost housing a boost?
I seriously believe that the low-cost housing sector should be de-linked from real estate and be accorded infrastructure status. Loans for such projects should be made available at lower rates and also qualify for stamp duty and registration fee waiver. Development and approval charges should similarly be done away with or at least subsidised. Some initiatives need to be taken for promoting reputed corporates to enter this area.
How much of your portfolio will comprise low-cost housing?
Today, it is only one among eight or nine projects. Going forward, I see it at 20-25 per cent, while another 25-30 per cent would be affordable homes with high-end products taking up the balance.
Do you see early signs of a revival in the realty sector?
Yes, and we are getting early signs even in the premium end. But, then, these are very tentative signs. One can be sure and more confident once the new government is in place. It will start to some extent in October-November. But then, if this does not happen then we are in for trouble.
Do you see a further price correction in the days to come?
No, I believe most developers have realised that they need to bring prices down for the middle class. If they only have to chase high-end clients, who already have two or three homes, how many more will they buy? It only leads to speculation. Home loan interest rates too, have to come down further.
Do you suggest that people buy now?
Yes, a buyer today is getting something that was at a higher price earlier. Second, whatever be the stated price, it is up for negotiation. Even if it is 20 per cent less than the quoted price, there is room to wriggle out another 15 per cent. Many developers who bought land in the suburbs where prices are lower have reduced their expectations and are offering projects at lower prices.
Finally, what do buyers look for, be it low-cost or high end?
Irrespective of his income profile, buyers look at the reputation of the builder. However big a developer is, project timelines must be met and pricing has to be transparent.
The Hindu Business Line, May 25, 2009, Page 2
--------------------------------------------------------------------------------
The low-cost housing sector should be de-linked from real estate and be accorded infrastructure status. — Mr Brotin Banerjee, MD and CEO, Tata Housing
--------------------------------------------------------------------------------
S. Shanker , Mumbai
Tata Housing Development Company created waves recently when it announced its intention to build nearly 1,000 homes priced in the range of Rs 3.9-6.7 lakh.
The Nano homes, as they are popularly termed, got a flood of over 6,000 applications within a week of the announcement. The project will be commissioned in Boisar, 100 km from Mumbai, and planned as an integrated township.
In an interview to Business Line, Mr Brotin Banerjee, Managing Director and CEO, Tata Housing, talks about this plan in greater detail.
What was the starting point for this project?
Our initiative was not meant for making profits but work as a business model. There is a shortage of 24 million dwelling units in the country and I don’t think it is possible for the Centre and State governments to invest that kind of money for this purpose. It is only the private sector or a private-public participation that will work.
This game will be high in volume and comparatively lower in margin than the high-end formats.
If it is done in places where we have offices such as Delhi, Bangalore and Mumbai, the incremental cost as far as overheads is concerned will not be high.
Did market conditions prompt you to get into low-cost housing?
This company started in 1984 but, in many ways, was revived only in late 2005-2006 when an entire new management came onboard. It was not that market conditions forced us to go in for low-cost housing but it was what we would have done anyway.
You have allocated eight of the 63 acres for this initiative at Boisar. Will the balance area see high-end products?
We are not looking at high-end apartments but relatively higher compared to the low cost — a different product mix. We will have higher margins there but then these will not sell in two weeks.
How long will the entire project take given that landowners are partners?
We have a joint development arrangement with the landowners at Boisar.
In general, we do a mix of joint development, outright and joint venture. This project will take four years though the low-cost housing will be done in two.
Are you looking for land or would you prefer joint ventures as a business model?
We have about 100 offers from landowners from different cities but then all may not materialise as they would have to come to terms that margins will be lower in low-cost housing.
Would you be more inclined towards industrial hubs in Bangalore and Gurgaon for your next phase of low-cost projects?
These may come up in the other side of Bangalore, near Peenya. We try to look in between cities and industrial centres to provide relatively low-cost, and yet good quality living standards for people in industrial areas while attracting those living in crowded cities.
What must be done to give low-cost housing a boost?
I seriously believe that the low-cost housing sector should be de-linked from real estate and be accorded infrastructure status. Loans for such projects should be made available at lower rates and also qualify for stamp duty and registration fee waiver. Development and approval charges should similarly be done away with or at least subsidised. Some initiatives need to be taken for promoting reputed corporates to enter this area.
How much of your portfolio will comprise low-cost housing?
Today, it is only one among eight or nine projects. Going forward, I see it at 20-25 per cent, while another 25-30 per cent would be affordable homes with high-end products taking up the balance.
Do you see early signs of a revival in the realty sector?
Yes, and we are getting early signs even in the premium end. But, then, these are very tentative signs. One can be sure and more confident once the new government is in place. It will start to some extent in October-November. But then, if this does not happen then we are in for trouble.
Do you see a further price correction in the days to come?
No, I believe most developers have realised that they need to bring prices down for the middle class. If they only have to chase high-end clients, who already have two or three homes, how many more will they buy? It only leads to speculation. Home loan interest rates too, have to come down further.
Do you suggest that people buy now?
Yes, a buyer today is getting something that was at a higher price earlier. Second, whatever be the stated price, it is up for negotiation. Even if it is 20 per cent less than the quoted price, there is room to wriggle out another 15 per cent. Many developers who bought land in the suburbs where prices are lower have reduced their expectations and are offering projects at lower prices.
Finally, what do buyers look for, be it low-cost or high end?
Irrespective of his income profile, buyers look at the reputation of the builder. However big a developer is, project timelines must be met and pricing has to be transparent.
Tata Housing building on the strength of low-cost homes
Tata Housing building on the strength of low-cost homes
The Hindu Business Line, May 25, 2009, Page 2
--------------------------------------------------------------------------------
The low-cost housing sector should be de-linked from real estate and be accorded infrastructure status. — Mr Brotin Banerjee, MD and CEO, Tata Housing
--------------------------------------------------------------------------------
S. Shanker , Mumbai
Tata Housing Development Company created waves recently when it announced its intention to build nearly 1,000 homes priced in the range of Rs 3.9-6.7 lakh.
The Nano homes, as they are popularly termed, got a flood of over 6,000 applications within a week of the announcement. The project will be commissioned in Boisar, 100 km from Mumbai, and planned as an integrated township.
In an interview to Business Line, Mr Brotin Banerjee, Managing Director and CEO, Tata Housing, talks about this plan in greater detail.
What was the starting point for this project?
Our initiative was not meant for making profits but work as a business model. There is a shortage of 24 million dwelling units in the country and I don’t think it is possible for the Centre and State governments to invest that kind of money for this purpose. It is only the private sector or a private-public participation that will work.
This game will be high in volume and comparatively lower in margin than the high-end formats.
If it is done in places where we have offices such as Delhi, Bangalore and Mumbai, the incremental cost as far as overheads is concerned will not be high.
Did market conditions prompt you to get into low-cost housing?
This company started in 1984 but, in many ways, was revived only in late 2005-2006 when an entire new management came onboard. It was not that market conditions forced us to go in for low-cost housing but it was what we would have done anyway.
You have allocated eight of the 63 acres for this initiative at Boisar. Will the balance area see high-end products?
We are not looking at high-end apartments but relatively higher compared to the low cost — a different product mix. We will have higher margins there but then these will not sell in two weeks.
How long will the entire project take given that landowners are partners?
We have a joint development arrangement with the landowners at Boisar.
In general, we do a mix of joint development, outright and joint venture. This project will take four years though the low-cost housing will be done in two.
Are you looking for land or would you prefer joint ventures as a business model?
We have about 100 offers from landowners from different cities but then all may not materialise as they would have to come to terms that margins will be lower in low-cost housing.
Would you be more inclined towards industrial hubs in Bangalore and Gurgaon for your next phase of low-cost projects?
These may come up in the other side of Bangalore, near Peenya. We try to look in between cities and industrial centres to provide relatively low-cost, and yet good quality living standards for people in industrial areas while attracting those living in crowded cities.
What must be done to give low-cost housing a boost?
I seriously believe that the low-cost housing sector should be de-linked from real estate and be accorded infrastructure status. Loans for such projects should be made available at lower rates and also qualify for stamp duty and registration fee waiver. Development and approval charges should similarly be done away with or at least subsidised. Some initiatives need to be taken for promoting reputed corporates to enter this area.
How much of your portfolio will comprise low-cost housing?
Today, it is only one among eight or nine projects. Going forward, I see it at 20-25 per cent, while another 25-30 per cent would be affordable homes with high-end products taking up the balance.
Do you see early signs of a revival in the realty sector?
Yes, and we are getting early signs even in the premium end. But, then, these are very tentative signs. One can be sure and more confident once the new government is in place. It will start to some extent in October-November. But then, if this does not happen then we are in for trouble.
Do you see a further price correction in the days to come?
No, I believe most developers have realised that they need to bring prices down for the middle class. If they only have to chase high-end clients, who already have two or three homes, how many more will they buy? It only leads to speculation. Home loan interest rates too, have to come down further.
Do you suggest that people buy now?
Yes, a buyer today is getting something that was at a higher price earlier. Second, whatever be the stated price, it is up for negotiation. Even if it is 20 per cent less than the quoted price, there is room to wriggle out another 15 per cent. Many developers who bought land in the suburbs where prices are lower have reduced their expectations and are offering projects at lower prices.
Finally, what do buyers look for, be it low-cost or high end?
Irrespective of his income profile, buyers look at the reputation of the builder. However big a developer is, project timelines must be met and pricing has to be transparent.
The Hindu Business Line, May 25, 2009, Page 2
--------------------------------------------------------------------------------
The low-cost housing sector should be de-linked from real estate and be accorded infrastructure status. — Mr Brotin Banerjee, MD and CEO, Tata Housing
--------------------------------------------------------------------------------
S. Shanker , Mumbai
Tata Housing Development Company created waves recently when it announced its intention to build nearly 1,000 homes priced in the range of Rs 3.9-6.7 lakh.
The Nano homes, as they are popularly termed, got a flood of over 6,000 applications within a week of the announcement. The project will be commissioned in Boisar, 100 km from Mumbai, and planned as an integrated township.
In an interview to Business Line, Mr Brotin Banerjee, Managing Director and CEO, Tata Housing, talks about this plan in greater detail.
What was the starting point for this project?
Our initiative was not meant for making profits but work as a business model. There is a shortage of 24 million dwelling units in the country and I don’t think it is possible for the Centre and State governments to invest that kind of money for this purpose. It is only the private sector or a private-public participation that will work.
This game will be high in volume and comparatively lower in margin than the high-end formats.
If it is done in places where we have offices such as Delhi, Bangalore and Mumbai, the incremental cost as far as overheads is concerned will not be high.
Did market conditions prompt you to get into low-cost housing?
This company started in 1984 but, in many ways, was revived only in late 2005-2006 when an entire new management came onboard. It was not that market conditions forced us to go in for low-cost housing but it was what we would have done anyway.
You have allocated eight of the 63 acres for this initiative at Boisar. Will the balance area see high-end products?
We are not looking at high-end apartments but relatively higher compared to the low cost — a different product mix. We will have higher margins there but then these will not sell in two weeks.
How long will the entire project take given that landowners are partners?
We have a joint development arrangement with the landowners at Boisar.
In general, we do a mix of joint development, outright and joint venture. This project will take four years though the low-cost housing will be done in two.
Are you looking for land or would you prefer joint ventures as a business model?
We have about 100 offers from landowners from different cities but then all may not materialise as they would have to come to terms that margins will be lower in low-cost housing.
Would you be more inclined towards industrial hubs in Bangalore and Gurgaon for your next phase of low-cost projects?
These may come up in the other side of Bangalore, near Peenya. We try to look in between cities and industrial centres to provide relatively low-cost, and yet good quality living standards for people in industrial areas while attracting those living in crowded cities.
What must be done to give low-cost housing a boost?
I seriously believe that the low-cost housing sector should be de-linked from real estate and be accorded infrastructure status. Loans for such projects should be made available at lower rates and also qualify for stamp duty and registration fee waiver. Development and approval charges should similarly be done away with or at least subsidised. Some initiatives need to be taken for promoting reputed corporates to enter this area.
How much of your portfolio will comprise low-cost housing?
Today, it is only one among eight or nine projects. Going forward, I see it at 20-25 per cent, while another 25-30 per cent would be affordable homes with high-end products taking up the balance.
Do you see early signs of a revival in the realty sector?
Yes, and we are getting early signs even in the premium end. But, then, these are very tentative signs. One can be sure and more confident once the new government is in place. It will start to some extent in October-November. But then, if this does not happen then we are in for trouble.
Do you see a further price correction in the days to come?
No, I believe most developers have realised that they need to bring prices down for the middle class. If they only have to chase high-end clients, who already have two or three homes, how many more will they buy? It only leads to speculation. Home loan interest rates too, have to come down further.
Do you suggest that people buy now?
Yes, a buyer today is getting something that was at a higher price earlier. Second, whatever be the stated price, it is up for negotiation. Even if it is 20 per cent less than the quoted price, there is room to wriggle out another 15 per cent. Many developers who bought land in the suburbs where prices are lower have reduced their expectations and are offering projects at lower prices.
Finally, what do buyers look for, be it low-cost or high end?
Irrespective of his income profile, buyers look at the reputation of the builder. However big a developer is, project timelines must be met and pricing has to be transparent.
Tata Housing building on the strength of low-cost homes
Tata Housing building on the strength of low-cost homes
The Hindu Business Line, May 25, 2009, Page 2
--------------------------------------------------------------------------------
The low-cost housing sector should be de-linked from real estate and be accorded infrastructure status. — Mr Brotin Banerjee, MD and CEO, Tata Housing
--------------------------------------------------------------------------------
S. Shanker , Mumbai
Tata Housing Development Company created waves recently when it announced its intention to build nearly 1,000 homes priced in the range of Rs 3.9-6.7 lakh.
The Nano homes, as they are popularly termed, got a flood of over 6,000 applications within a week of the announcement. The project will be commissioned in Boisar, 100 km from Mumbai, and planned as an integrated township.
In an interview to Business Line, Mr Brotin Banerjee, Managing Director and CEO, Tata Housing, talks about this plan in greater detail.
What was the starting point for this project?
Our initiative was not meant for making profits but work as a business model. There is a shortage of 24 million dwelling units in the country and I don’t think it is possible for the Centre and State governments to invest that kind of money for this purpose. It is only the private sector or a private-public participation that will work.
This game will be high in volume and comparatively lower in margin than the high-end formats.
If it is done in places where we have offices such as Delhi, Bangalore and Mumbai, the incremental cost as far as overheads is concerned will not be high.
Did market conditions prompt you to get into low-cost housing?
This company started in 1984 but, in many ways, was revived only in late 2005-2006 when an entire new management came onboard. It was not that market conditions forced us to go in for low-cost housing but it was what we would have done anyway.
You have allocated eight of the 63 acres for this initiative at Boisar. Will the balance area see high-end products?
We are not looking at high-end apartments but relatively higher compared to the low cost — a different product mix. We will have higher margins there but then these will not sell in two weeks.
How long will the entire project take given that landowners are partners?
We have a joint development arrangement with the landowners at Boisar.
In general, we do a mix of joint development, outright and joint venture. This project will take four years though the low-cost housing will be done in two.
Are you looking for land or would you prefer joint ventures as a business model?
We have about 100 offers from landowners from different cities but then all may not materialise as they would have to come to terms that margins will be lower in low-cost housing.
Would you be more inclined towards industrial hubs in Bangalore and Gurgaon for your next phase of low-cost projects?
These may come up in the other side of Bangalore, near Peenya. We try to look in between cities and industrial centres to provide relatively low-cost, and yet good quality living standards for people in industrial areas while attracting those living in crowded cities.
What must be done to give low-cost housing a boost?
I seriously believe that the low-cost housing sector should be de-linked from real estate and be accorded infrastructure status. Loans for such projects should be made available at lower rates and also qualify for stamp duty and registration fee waiver. Development and approval charges should similarly be done away with or at least subsidised. Some initiatives need to be taken for promoting reputed corporates to enter this area.
How much of your portfolio will comprise low-cost housing?
Today, it is only one among eight or nine projects. Going forward, I see it at 20-25 per cent, while another 25-30 per cent would be affordable homes with high-end products taking up the balance.
Do you see early signs of a revival in the realty sector?
Yes, and we are getting early signs even in the premium end. But, then, these are very tentative signs. One can be sure and more confident once the new government is in place. It will start to some extent in October-November. But then, if this does not happen then we are in for trouble.
Do you see a further price correction in the days to come?
No, I believe most developers have realised that they need to bring prices down for the middle class. If they only have to chase high-end clients, who already have two or three homes, how many more will they buy? It only leads to speculation. Home loan interest rates too, have to come down further.
Do you suggest that people buy now?
Yes, a buyer today is getting something that was at a higher price earlier. Second, whatever be the stated price, it is up for negotiation. Even if it is 20 per cent less than the quoted price, there is room to wriggle out another 15 per cent. Many developers who bought land in the suburbs where prices are lower have reduced their expectations and are offering projects at lower prices.
Finally, what do buyers look for, be it low-cost or high end?
Irrespective of his income profile, buyers look at the reputation of the builder. However big a developer is, project timelines must be met and pricing has to be transparent.
The Hindu Business Line, May 25, 2009, Page 2
--------------------------------------------------------------------------------
The low-cost housing sector should be de-linked from real estate and be accorded infrastructure status. — Mr Brotin Banerjee, MD and CEO, Tata Housing
--------------------------------------------------------------------------------
S. Shanker , Mumbai
Tata Housing Development Company created waves recently when it announced its intention to build nearly 1,000 homes priced in the range of Rs 3.9-6.7 lakh.
The Nano homes, as they are popularly termed, got a flood of over 6,000 applications within a week of the announcement. The project will be commissioned in Boisar, 100 km from Mumbai, and planned as an integrated township.
In an interview to Business Line, Mr Brotin Banerjee, Managing Director and CEO, Tata Housing, talks about this plan in greater detail.
What was the starting point for this project?
Our initiative was not meant for making profits but work as a business model. There is a shortage of 24 million dwelling units in the country and I don’t think it is possible for the Centre and State governments to invest that kind of money for this purpose. It is only the private sector or a private-public participation that will work.
This game will be high in volume and comparatively lower in margin than the high-end formats.
If it is done in places where we have offices such as Delhi, Bangalore and Mumbai, the incremental cost as far as overheads is concerned will not be high.
Did market conditions prompt you to get into low-cost housing?
This company started in 1984 but, in many ways, was revived only in late 2005-2006 when an entire new management came onboard. It was not that market conditions forced us to go in for low-cost housing but it was what we would have done anyway.
You have allocated eight of the 63 acres for this initiative at Boisar. Will the balance area see high-end products?
We are not looking at high-end apartments but relatively higher compared to the low cost — a different product mix. We will have higher margins there but then these will not sell in two weeks.
How long will the entire project take given that landowners are partners?
We have a joint development arrangement with the landowners at Boisar.
In general, we do a mix of joint development, outright and joint venture. This project will take four years though the low-cost housing will be done in two.
Are you looking for land or would you prefer joint ventures as a business model?
We have about 100 offers from landowners from different cities but then all may not materialise as they would have to come to terms that margins will be lower in low-cost housing.
Would you be more inclined towards industrial hubs in Bangalore and Gurgaon for your next phase of low-cost projects?
These may come up in the other side of Bangalore, near Peenya. We try to look in between cities and industrial centres to provide relatively low-cost, and yet good quality living standards for people in industrial areas while attracting those living in crowded cities.
What must be done to give low-cost housing a boost?
I seriously believe that the low-cost housing sector should be de-linked from real estate and be accorded infrastructure status. Loans for such projects should be made available at lower rates and also qualify for stamp duty and registration fee waiver. Development and approval charges should similarly be done away with or at least subsidised. Some initiatives need to be taken for promoting reputed corporates to enter this area.
How much of your portfolio will comprise low-cost housing?
Today, it is only one among eight or nine projects. Going forward, I see it at 20-25 per cent, while another 25-30 per cent would be affordable homes with high-end products taking up the balance.
Do you see early signs of a revival in the realty sector?
Yes, and we are getting early signs even in the premium end. But, then, these are very tentative signs. One can be sure and more confident once the new government is in place. It will start to some extent in October-November. But then, if this does not happen then we are in for trouble.
Do you see a further price correction in the days to come?
No, I believe most developers have realised that they need to bring prices down for the middle class. If they only have to chase high-end clients, who already have two or three homes, how many more will they buy? It only leads to speculation. Home loan interest rates too, have to come down further.
Do you suggest that people buy now?
Yes, a buyer today is getting something that was at a higher price earlier. Second, whatever be the stated price, it is up for negotiation. Even if it is 20 per cent less than the quoted price, there is room to wriggle out another 15 per cent. Many developers who bought land in the suburbs where prices are lower have reduced their expectations and are offering projects at lower prices.
Finally, what do buyers look for, be it low-cost or high end?
Irrespective of his income profile, buyers look at the reputation of the builder. However big a developer is, project timelines must be met and pricing has to be transparent.
Unitech sells over a third of its projects
Unitech sells over a third of its projects
Business Standard, May 23, 2009, Page 5
Unitech Ltd, the country’s second-biggest real estate developer, has sold more than aquarter of its launched projects in the first two months of the financial year as it tweaked its product mix and lowered prices.
The New Delhi-based company, which had launched 9 million square feet of residential space, has sold 2.5 million square feet (over 2,000 units). The developer has been able to garner as much as Rs 850 crore from the sale, according to a presentation the developer made to its investors earlier this month.
“We have received an overwhelming response to our residential projects. The strategy of launching the projects at an average Rs 3,000 per sq ft is paying off,” said a company official.
Unitech has launched two residential projects in Gurgaon, three in Kolkata and two in Chennai. The company is also offering residential plots at its Noida and Kolkata projects.
In Gurgaon, the cost of a Unitech apartment is Rs 26-28 lakh, while in Kolkata the price of an apartment starts from Rs 15 lakh. The apartments are between 800 sq ft and 1,500 sq ft in size.
“The company has over Rs 2,000 crore of debt obligations for the current financial year and it is marketing its projects aggressively to raise money from its residential projects to be able to clear its debt,” the official said.
At these prices, the company should not find it difficult to sell its projects, said a Mumbai-based equity analyst.
The company plans to launch 30 million square feet of space across 40 projects in the current financial year. The proposed projects will span 15 cities and seven metros, accounting for nearly 7 per cent of the company’s land bank which is estimated at 11,000 acres, the presentation showed.
Unitech had raised Rs 231 crore from the sale of its Marriott Courtyard hotel in Gurgaon, while it raised another Rs 500 crore from sale of its proposed corporate office in Saket. The company has a target of reducing its debt by Rs 1,000 crore by endJune.
Last month, Unitech raised $325 million (Rs 1,625 crore) from selling additional shares to overseas investors to repay apart of its debt, which is currently estimated at Rs 7,800 crore, according to the company presentation.
Business Standard, May 23, 2009, Page 5
Unitech Ltd, the country’s second-biggest real estate developer, has sold more than aquarter of its launched projects in the first two months of the financial year as it tweaked its product mix and lowered prices.
The New Delhi-based company, which had launched 9 million square feet of residential space, has sold 2.5 million square feet (over 2,000 units). The developer has been able to garner as much as Rs 850 crore from the sale, according to a presentation the developer made to its investors earlier this month.
“We have received an overwhelming response to our residential projects. The strategy of launching the projects at an average Rs 3,000 per sq ft is paying off,” said a company official.
Unitech has launched two residential projects in Gurgaon, three in Kolkata and two in Chennai. The company is also offering residential plots at its Noida and Kolkata projects.
In Gurgaon, the cost of a Unitech apartment is Rs 26-28 lakh, while in Kolkata the price of an apartment starts from Rs 15 lakh. The apartments are between 800 sq ft and 1,500 sq ft in size.
“The company has over Rs 2,000 crore of debt obligations for the current financial year and it is marketing its projects aggressively to raise money from its residential projects to be able to clear its debt,” the official said.
At these prices, the company should not find it difficult to sell its projects, said a Mumbai-based equity analyst.
The company plans to launch 30 million square feet of space across 40 projects in the current financial year. The proposed projects will span 15 cities and seven metros, accounting for nearly 7 per cent of the company’s land bank which is estimated at 11,000 acres, the presentation showed.
Unitech had raised Rs 231 crore from the sale of its Marriott Courtyard hotel in Gurgaon, while it raised another Rs 500 crore from sale of its proposed corporate office in Saket. The company has a target of reducing its debt by Rs 1,000 crore by endJune.
Last month, Unitech raised $325 million (Rs 1,625 crore) from selling additional shares to overseas investors to repay apart of its debt, which is currently estimated at Rs 7,800 crore, according to the company presentation.
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