Thursday, May 28, 2009
REFORMS, CORE TO TOP BUDGET
REFORMS, CORE TO TOP BUDGET
The Economic Times, May 28, 2009, Page 1
Armed with a decisive mandate, Team Manmohan is eager to rev up the economy. So even as the FM vowed to push for cheaper funds & higher infrastructure spending, Sebi said it was looking to ease fund-raising norms for core companies. It was enough to charge up the bulls on Dalal Street...
Our Bureau NEW DELHI
THE full Budget for 2009-10 to be presented in the first week of July would have welfare measures for the poor, concrete reform moves, higher infrastructure spending and steps to boost the economy, said finance minister Pranab Mukherjee on Wednesday. The Budget would also kickstart fiscal consolidation to be achieved over a three-year period.
Mr Mukherjee, in his first press conference after assuming office, said the government would present its vision and approach for the next five years in the Budget. Separately, the government will get commitments from banks to lower the cost of funds.
“Broadly, the election results have vin
dicated the strategy of inclusive growth. I have no hesitation in saying that along with reviving the momentum of growth and employment generation, our government will strengthen the various ‘inclusive’ elements in the coming Budget,” said Mr Mukherjee. The Congress party’s manifesto promises to expand the schemes on creating rural jobs, providing education and health insurance cover, besides legally guaranteeing food to the poor.
The minister said budget-making was underway in full swing and that it would be presented it in the first week of July.
The government has to continue with a higher spending this fiscal too in order to restore the higher economic growth rate in the past, the 73-year-old political veteran said.
“Let me say unambiguously that we are committed to restoring growth and employment and that would not have been possible without increased spending funded by incremental borrowing. This would need to be further continued in 2009-10, the current year,” Mr Mukherjee said.
The government, which earlier announced three economic stimuli, will provide sustained push to growth through the next round of economic reforms.
FM to push banks to make funds cheaper
“WE have a broad plan of action in mind. I will get additional inputs when I have my pre-Budget consultations with stakeholders. All this will be distilled into a concrete short-term and medium-term vision and strategy for India’s economic growth,” assured Mr Mukherjee.Finance secretary Ashok Chawla, who accompanied the minister, later explained to reporters that the slowdown in growth has “bottomed out” and a recovery was imminent. Four lead economic indicators suggest the economy was set to grow faster, he said. Besides, foreign institutional investments into the country have picked up, with the total inflow in the last 45-50 days touching about $4 billion, said Mr Chawla.
Mr Mukherjee also said the government was concerned about the cost and the speed at which finance can be accessed by businesses. He said he would meet bankers and get them “committed to a more benign plan of action”. The government will also give special attention to strengthening infrastructure investments. It will re-appraise infrastructure projects in the pipeline and make them more robust. The Centre would also calibrate policies to boost infrastructure spending so that the economy returns to the high-growth trajectory.
Despite the higher spending, the government is equally committed to fiscal consolidation over a period of, say, 2-3 years, the minister added. In the interim budget presented in February, the government had estimated that fiscal deficit for 2008-09 may touch 6% of gross domestic product (GDP) and it forecast a 5.5% fiscal deficit for this year. Economists said the combined fiscal deficit of the Centre and the states may have crossed 10% of national GDP last fiscal. “Prophets of doom have been unduly focusing on increased public spending and consequent increase in the fiscal and revenue deficits in the past. We are hopeful that an early return to our recent growth performance will help us come back to our preferred path of fiscal prudence,” said the minister. The government had originally set a fiscal deficit target of 2.5% for the last fiscal. Mr Mukherjee said the government will take advantage of its political stability and push long-pending reforms. These measures would cover both financial and non-financial sectors of the economy. One of the immediate steps would be to implement the law against money laundering, he said.
The Economic Times, May 28, 2009, Page 1
Armed with a decisive mandate, Team Manmohan is eager to rev up the economy. So even as the FM vowed to push for cheaper funds & higher infrastructure spending, Sebi said it was looking to ease fund-raising norms for core companies. It was enough to charge up the bulls on Dalal Street...
Our Bureau NEW DELHI
THE full Budget for 2009-10 to be presented in the first week of July would have welfare measures for the poor, concrete reform moves, higher infrastructure spending and steps to boost the economy, said finance minister Pranab Mukherjee on Wednesday. The Budget would also kickstart fiscal consolidation to be achieved over a three-year period.
Mr Mukherjee, in his first press conference after assuming office, said the government would present its vision and approach for the next five years in the Budget. Separately, the government will get commitments from banks to lower the cost of funds.
“Broadly, the election results have vin
dicated the strategy of inclusive growth. I have no hesitation in saying that along with reviving the momentum of growth and employment generation, our government will strengthen the various ‘inclusive’ elements in the coming Budget,” said Mr Mukherjee. The Congress party’s manifesto promises to expand the schemes on creating rural jobs, providing education and health insurance cover, besides legally guaranteeing food to the poor.The minister said budget-making was underway in full swing and that it would be presented it in the first week of July.
The government has to continue with a higher spending this fiscal too in order to restore the higher economic growth rate in the past, the 73-year-old political veteran said.
“Let me say unambiguously that we are committed to restoring growth and employment and that would not have been possible without increased spending funded by incremental borrowing. This would need to be further continued in 2009-10, the current year,” Mr Mukherjee said.
The government, which earlier announced three economic stimuli, will provide sustained push to growth through the next round of economic reforms.
FM to push banks to make funds cheaper
“WE have a broad plan of action in mind. I will get additional inputs when I have my pre-Budget consultations with stakeholders. All this will be distilled into a concrete short-term and medium-term vision and strategy for India’s economic growth,” assured Mr Mukherjee.Finance secretary Ashok Chawla, who accompanied the minister, later explained to reporters that the slowdown in growth has “bottomed out” and a recovery was imminent. Four lead economic indicators suggest the economy was set to grow faster, he said. Besides, foreign institutional investments into the country have picked up, with the total inflow in the last 45-50 days touching about $4 billion, said Mr Chawla.
Mr Mukherjee also said the government was concerned about the cost and the speed at which finance can be accessed by businesses. He said he would meet bankers and get them “committed to a more benign plan of action”. The government will also give special attention to strengthening infrastructure investments. It will re-appraise infrastructure projects in the pipeline and make them more robust. The Centre would also calibrate policies to boost infrastructure spending so that the economy returns to the high-growth trajectory.
Despite the higher spending, the government is equally committed to fiscal consolidation over a period of, say, 2-3 years, the minister added. In the interim budget presented in February, the government had estimated that fiscal deficit for 2008-09 may touch 6% of gross domestic product (GDP) and it forecast a 5.5% fiscal deficit for this year. Economists said the combined fiscal deficit of the Centre and the states may have crossed 10% of national GDP last fiscal. “Prophets of doom have been unduly focusing on increased public spending and consequent increase in the fiscal and revenue deficits in the past. We are hopeful that an early return to our recent growth performance will help us come back to our preferred path of fiscal prudence,” said the minister. The government had originally set a fiscal deficit target of 2.5% for the last fiscal. Mr Mukherjee said the government will take advantage of its political stability and push long-pending reforms. These measures would cover both financial and non-financial sectors of the economy. One of the immediate steps would be to implement the law against money laundering, he said.
Govt to push ahead with long-pending reforms
Govt to push ahead with long-pending reforms
The Hindu Business Line, May 28, 2009, page 1
Priority for lowering bank lending rates further.
Our Bureau, New Delhi
The Finance Minister, Mr Pranab Mukherjee, said on Wednesday that the next round of economic reforms will provide the next stimulus to economic growth. The stock markets seemed pleased by the announcement. The benchmark Sensex responded by ending the day with a gain of about 520 points.
In his first press conference after taking charge as the Union Finance Minister, Mr Mukherjee hinted that the Congress-led Government would now push long-pending reforms in the financial as well as real sectors of the economy.
Meeting with bankers
“Sustained stimulus to growth can be harnessed by the next round of economic reforms. We have a broad plan of action in mind. We need to seize the opportunity presented by the current circumstances for pushing long-pending reform measures in financial and real sectors..”, he said.
This was even as the Government was assessing the impact of three doses of economic stimulus announced in December 2008, January 2009 and in the interim Budget (February 2009).
The first step the Finance Minister proposes to take is to meet bankers and nudge them to further lower their lending rates, as signalled by the Reserve Bank of India through its monetary policy. “I want to get them (bankers) committed to a more benign plan of action,” he said.
He highlighted that industry and business have been hurt by the cost of finance and its availability. “While much has been done in the last eight months and international capital flows have resumed, the cost and the speed with which finance can be accessed remains a matter of concern”.
Mr Mukherjee said that he would try to complete the entire exercise of the passage of the Budget for 2009-10 by July 31. “For this, I need the cooperation of other political parties represented in the floor of both the Houses. As soon as the Parliament session starts, I will discuss with the leaders of political parties. If they agree to dispense with scrutiny by standing committees, then that would facilitate me to complete the exercise by July 31,” he said.
The Finance Minister also said that the Government proposes to bring into force the Prevention of Money Laundering Act Amendment passed by Parliament recently. This would make India’s anti-money laundering regime stronger, he noted.
Restoring growth
Mr Mukherjee said the Government was committed to restoring growth and employment. He noted that this would not have been possible without increased spending funded by incremental borrowing.
“This would need to be further continued in 2009-10. However, we are equally committed to the process of fiscal consolidation over a period of, say, two to three years,” he said.
He also maintained that the fiscal deficit projected for 2009-10 would not be breached. “I hope to stick to it (fiscal deficit of 5.5 per cent of GDP for 2009-10),” the Finance Minister said.
He expressed the hope that an early return to recent growth performance would help the country get back to its preferred path of fiscal prudence.
On infrastructure, Mr Mukherjee said the Government would have to focus on implementing and strengthening infrastructure investments.
“These concerns will be addressed with a view to impart further momentum for an early return to the high growth path of recent years. The pipeline of infrastructure projects will be re-appraised and made more robust. Where necessary, policy and procedures will be calibrated to give a boost to infrastructure spending,” he said.
The Hindu Business Line, May 28, 2009, page 1
Priority for lowering bank lending rates further.
Our Bureau, New Delhi
The Finance Minister, Mr Pranab Mukherjee, said on Wednesday that the next round of economic reforms will provide the next stimulus to economic growth. The stock markets seemed pleased by the announcement. The benchmark Sensex responded by ending the day with a gain of about 520 points.
In his first press conference after taking charge as the Union Finance Minister, Mr Mukherjee hinted that the Congress-led Government would now push long-pending reforms in the financial as well as real sectors of the economy.
Meeting with bankers
“Sustained stimulus to growth can be harnessed by the next round of economic reforms. We have a broad plan of action in mind. We need to seize the opportunity presented by the current circumstances for pushing long-pending reform measures in financial and real sectors..”, he said.
This was even as the Government was assessing the impact of three doses of economic stimulus announced in December 2008, January 2009 and in the interim Budget (February 2009).
The first step the Finance Minister proposes to take is to meet bankers and nudge them to further lower their lending rates, as signalled by the Reserve Bank of India through its monetary policy. “I want to get them (bankers) committed to a more benign plan of action,” he said.
He highlighted that industry and business have been hurt by the cost of finance and its availability. “While much has been done in the last eight months and international capital flows have resumed, the cost and the speed with which finance can be accessed remains a matter of concern”.
Mr Mukherjee said that he would try to complete the entire exercise of the passage of the Budget for 2009-10 by July 31. “For this, I need the cooperation of other political parties represented in the floor of both the Houses. As soon as the Parliament session starts, I will discuss with the leaders of political parties. If they agree to dispense with scrutiny by standing committees, then that would facilitate me to complete the exercise by July 31,” he said.
The Finance Minister also said that the Government proposes to bring into force the Prevention of Money Laundering Act Amendment passed by Parliament recently. This would make India’s anti-money laundering regime stronger, he noted.
Restoring growth
Mr Mukherjee said the Government was committed to restoring growth and employment. He noted that this would not have been possible without increased spending funded by incremental borrowing.
“This would need to be further continued in 2009-10. However, we are equally committed to the process of fiscal consolidation over a period of, say, two to three years,” he said.
He also maintained that the fiscal deficit projected for 2009-10 would not be breached. “I hope to stick to it (fiscal deficit of 5.5 per cent of GDP for 2009-10),” the Finance Minister said.
He expressed the hope that an early return to recent growth performance would help the country get back to its preferred path of fiscal prudence.
On infrastructure, Mr Mukherjee said the Government would have to focus on implementing and strengthening infrastructure investments.
“These concerns will be addressed with a view to impart further momentum for an early return to the high growth path of recent years. The pipeline of infrastructure projects will be re-appraised and made more robust. Where necessary, policy and procedures will be calibrated to give a boost to infrastructure spending,” he said.
FM-speak, US data lift Sensex 520 pts
FM-speak, US data lift Sensex 520 pts
Business Standard, May 28, 2009, Page 1
BS Reporter / Mumbai
Realty, banking stocks lead the rally
Finance Minister Pranab Mukherjee’s statement that he would get bankers committed to a "more benign plan of action", and improving consumer confidence in the US lifted market sentiments today.
The Bombay Stock Exchange (BSE) Sensitive Index, or Sensex, rose sharply, led by realty and banking stocks.
The markets opened in the green in the morning session on the back of the optimistic consumer confidence data from the US. On Tuesday, the Dow Jones Industrial Average and the S&P had closed higher by 2.4 per cent and 2.6 per cent, respectively. The Nasdaq soared 3.4 per cent.
Hang Seng was the top gainer in Asia, rising 5.26 per cent because of a stimulus package of $2.2 billion announced by the government. The other major indices were up between 1.37 and 3.10 per cent.
The Sensex rose
520.41, or 3.8 per cent, to 14,109.64, the biggest gain since May 18. The S&P CNX Nifty added 3.9 per cent to 4,276.05.
Sanjay Sinha, chief executive officer at DBS Chola Mutual Fund, said the markets were looking forward to the Budget and the first 100-day plan of action. If the policy moves lived up to the expectations, there would be huge inflow of money from foreign as well as domestic mutual funds, he said.
According to provisional data from the BSE, domestic institutional investors were net buyers of Rs 685.64 crore. Foreign institutional investors were net buyers of Rs 369.80 crore.
Market breadth indicated a strong trend as 82.58 per cent, or 2,346 stocks, advanced against declines of 16.16 per cent, or 459 stocks on BSE.
All the sectoral indices were up.
Price (Rs) % Chg*
TOP GAINERS
Reliance Infra 1288.2 14.72
Sterlite Ind 591.15 9.49
ONGC 1107.85 9.42
DLF 365.5 8.49
Grasim Ind 2247.3 7.27
Ranbaxy Labs 261.85 7.14
ICICI Bank 710.55 6.59
Jaiprakash Asso 190.3 6.58
SBI 1790.55 6.08
Tata Motors 343.55 5.55
TOP LOSERES
Bharti Airtel 768.9 -0.19
ITC 183.85 -0.19
ACC 709.05 -0.16
% Chg*
OTHER MARKETS
ASIA
Hang Seng 5.26
Nikkei 225 1.37
Straits Times 3.01
AMERICA
Nasdaq -0.60
Dow Jones -1.41
EUROPE
FTSE 100 0.10
# till 1200 hrs (IST)
“Another major reason for today's rally was also the short-covering that took place ahead of the May expiry,” said Alex Mathew, research head at Geojit BNP Paribas Securities.
Mathews said that there was a strong support for the Nifty 4,251 and 4,207 points while there was resistance at 4,319 and 4,362 levels.
Business Standard, May 28, 2009, Page 1
BS Reporter / Mumbai
Realty, banking stocks lead the rally
Finance Minister Pranab Mukherjee’s statement that he would get bankers committed to a "more benign plan of action", and improving consumer confidence in the US lifted market sentiments today.
The Bombay Stock Exchange (BSE) Sensitive Index, or Sensex, rose sharply, led by realty and banking stocks.
The markets opened in the green in the morning session on the back of the optimistic consumer confidence data from the US. On Tuesday, the Dow Jones Industrial Average and the S&P had closed higher by 2.4 per cent and 2.6 per cent, respectively. The Nasdaq soared 3.4 per cent.
Hang Seng was the top gainer in Asia, rising 5.26 per cent because of a stimulus package of $2.2 billion announced by the government. The other major indices were up between 1.37 and 3.10 per cent.
The Sensex rose
520.41, or 3.8 per cent, to 14,109.64, the biggest gain since May 18. The S&P CNX Nifty added 3.9 per cent to 4,276.05.Sanjay Sinha, chief executive officer at DBS Chola Mutual Fund, said the markets were looking forward to the Budget and the first 100-day plan of action. If the policy moves lived up to the expectations, there would be huge inflow of money from foreign as well as domestic mutual funds, he said.
According to provisional data from the BSE, domestic institutional investors were net buyers of Rs 685.64 crore. Foreign institutional investors were net buyers of Rs 369.80 crore.
Market breadth indicated a strong trend as 82.58 per cent, or 2,346 stocks, advanced against declines of 16.16 per cent, or 459 stocks on BSE.
All the sectoral indices were up.
Price (Rs) % Chg*
TOP GAINERS
Reliance Infra 1288.2 14.72
Sterlite Ind 591.15 9.49
ONGC 1107.85 9.42
DLF 365.5 8.49
Grasim Ind 2247.3 7.27
Ranbaxy Labs 261.85 7.14
ICICI Bank 710.55 6.59
Jaiprakash Asso 190.3 6.58
SBI 1790.55 6.08
Tata Motors 343.55 5.55
TOP LOSERES
Bharti Airtel 768.9 -0.19
ITC 183.85 -0.19
ACC 709.05 -0.16
% Chg*
OTHER MARKETS
ASIA
Hang Seng 5.26
Nikkei 225 1.37
Straits Times 3.01
AMERICA
Nasdaq -0.60
Dow Jones -1.41
EUROPE
FTSE 100 0.10
# till 1200 hrs (IST)
“Another major reason for today's rally was also the short-covering that took place ahead of the May expiry,” said Alex Mathew, research head at Geojit BNP Paribas Securities.
Mathews said that there was a strong support for the Nifty 4,251 and 4,207 points while there was resistance at 4,319 and 4,362 levels.
NBCC set to trigger price war
NBCC set to trigger price war
The Economic Times, May 28, 2009, Page 7
GOVT-OWNED DEVELOPER TO OFFER 30-50% CHEAPER FLATS
Anto Antony NEW DELHI
IN A move that could trigger deep cuts in housing prices across the metros, government-owned construction firm National Building Construction Corporation (NBCC) has decided to offer flats at prices much below the current market prices offered by private developers. The prices are expected to be 30-50% lower than the prevailing prices offered by commercial developers.
More than 40,000 flats will be constructed by NBCC in the national capital region in the next three years. While 50% of the flats will be reserved for government employees, the other half will be available for the general public.
”We will be building 40,000 flats over the next three years in the NCR itself. Due to the phenomenal response attracted by our pilot project in Gurgaon, we have decided to scale up our operations in the metros. We had only 800 flats for sale and received more than 20, 000 applications,” said NBCC CMD Arup Roy Chowdhury.
These 800 flats, priced at Rs 1,978 per sq ft in Gurgaon, cost around Rs 30 lakh each. With these flats hitting the markets, prices in the real estate sector are expected to fall further.
NBCC is also trying to bring clarity into the way in which super built-up area is calculated. “There is a lot of ambiguity regarding the way in which different developers calculate the super built-up area. This creates difficulties for home buyers. We will set a precedent here and will bring in transparency,” said Mr Roy.
Super built-up area refers to the entire carpet area along with the thickness of the external walls of the apartment or a commercial unit along with the balconies and other common areas like corridors, staircase, lift room, motor room, security room, meeting hall, gymnasium and an area reserved for indoor games.
“There is still room for correction in real estate prices and even after selling the flats at a discount to the prevailing market prices, we will be posting healthy profits. Our flats will offer all the amenities that the commercial developers are offering at the discounted price,” said Mr Roy.
The Economic Times, May 28, 2009, Page 7
GOVT-OWNED DEVELOPER TO OFFER 30-50% CHEAPER FLATS
Anto Antony NEW DELHI
IN A move that could trigger deep cuts in housing prices across the metros, government-owned construction firm National Building Construction Corporation (NBCC) has decided to offer flats at prices much below the current market prices offered by private developers. The prices are expected to be 30-50% lower than the prevailing prices offered by commercial developers.
More than 40,000 flats will be constructed by NBCC in the national capital region in the next three years. While 50% of the flats will be reserved for government employees, the other half will be available for the general public.
”We will be building 40,000 flats over the next three years in the NCR itself. Due to the phenomenal response attracted by our pilot project in Gurgaon, we have decided to scale up our operations in the metros. We had only 800 flats for sale and received more than 20, 000 applications,” said NBCC CMD Arup Roy Chowdhury.
These 800 flats, priced at Rs 1,978 per sq ft in Gurgaon, cost around Rs 30 lakh each. With these flats hitting the markets, prices in the real estate sector are expected to fall further.
NBCC is also trying to bring clarity into the way in which super built-up area is calculated. “There is a lot of ambiguity regarding the way in which different developers calculate the super built-up area. This creates difficulties for home buyers. We will set a precedent here and will bring in transparency,” said Mr Roy.
Super built-up area refers to the entire carpet area along with the thickness of the external walls of the apartment or a commercial unit along with the balconies and other common areas like corridors, staircase, lift room, motor room, security room, meeting hall, gymnasium and an area reserved for indoor games.
“There is still room for correction in real estate prices and even after selling the flats at a discount to the prevailing market prices, we will be posting healthy profits. Our flats will offer all the amenities that the commercial developers are offering at the discounted price,” said Mr Roy.
Tata Realty eyes Rs 10k-cr revenue
Tata Realty eyes Rs 10k-cr revenue
Business Standard, May 28, 2009, Page 3
Raghavendra Kamath / Mumbai
Tata Realty and Infrastructure (TRIL), a unit of Tata Sons, expects to earn Rs 10,000 crore in revenues from its housing and commercial projects in the next four years, a top company official said.
The company will have 60-70 per cent of its portfolio from the residential segment, with the rest coming from office and retail properties by 2013.
The company is planning to foray into the residential space this year with its projects in Mumbai and Gurgaon and plans to build a slew of housing projects in cities such as Bangalore, Kochi, Nagpur, Chennai and Gurgaon in the next couple of years, the official said.
TRIL has plans to develop 6-7 million square feet of new residential projects in 3-4 years, with 2 million square feet being planned in Mumbai, which will have three-four projects, while Bangalore will have two projects, he said.
At the same time, Tata Housing (THDC), the Tata Sons unit which recently announced its low-cost housing project ‘Shubh Griha’ in Mumbai, is planning to build around 4,000 homes across other cities in the next four years, targeting industrial workers and other low-wage earners.
But the TRIL official said there would not be any conflict of interest between TRIL and THDC.
“There will be no conflict. We will avoid the places where they (THDC) are launching projects,” said Suraj Kulkarni, head of business development, TRIL.
“We would come up in the affordable housing segment, which will be competitively priced,” he added. Unlike THDC, TRIL’s housing projects will be FDI-compliant and will be in the region of 0.5 million square feet and above, he said.
The real estate and infrastructure businesses of TRIL may be carved into separate entities in the future as investors might like to see two separate companies after the company raises a $1-billion infra fund, said another company official.
TRIL’s plans come at a time when top real estate developers — such as DLF, Unitech, HDIL and others — have lined up a slew of mid-income housing projects, which are over 60 million square feet in all, in the current financial year.
Business Standard, May 28, 2009, Page 3
Raghavendra Kamath / Mumbai
Tata Realty and Infrastructure (TRIL), a unit of Tata Sons, expects to earn Rs 10,000 crore in revenues from its housing and commercial projects in the next four years, a top company official said.
The company will have 60-70 per cent of its portfolio from the residential segment, with the rest coming from office and retail properties by 2013.
The company is planning to foray into the residential space this year with its projects in Mumbai and Gurgaon and plans to build a slew of housing projects in cities such as Bangalore, Kochi, Nagpur, Chennai and Gurgaon in the next couple of years, the official said.
TRIL has plans to develop 6-7 million square feet of new residential projects in 3-4 years, with 2 million square feet being planned in Mumbai, which will have three-four projects, while Bangalore will have two projects, he said.
At the same time, Tata Housing (THDC), the Tata Sons unit which recently announced its low-cost housing project ‘Shubh Griha’ in Mumbai, is planning to build around 4,000 homes across other cities in the next four years, targeting industrial workers and other low-wage earners.
But the TRIL official said there would not be any conflict of interest between TRIL and THDC.
“There will be no conflict. We will avoid the places where they (THDC) are launching projects,” said Suraj Kulkarni, head of business development, TRIL.
“We would come up in the affordable housing segment, which will be competitively priced,” he added. Unlike THDC, TRIL’s housing projects will be FDI-compliant and will be in the region of 0.5 million square feet and above, he said.
The real estate and infrastructure businesses of TRIL may be carved into separate entities in the future as investors might like to see two separate companies after the company raises a $1-billion infra fund, said another company official.
TRIL’s plans come at a time when top real estate developers — such as DLF, Unitech, HDIL and others — have lined up a slew of mid-income housing projects, which are over 60 million square feet in all, in the current financial year.
Realty back in vogue for PE funds
Realty back in vogue for PE funds
Business Standard, May 28, 2009, Section II, Page 13
2008 saw deals worth $8.4 billion in the real estate sector. This year, the number is comparatively lower, as the deals have just started to pick up. Only three deals worth $80 million have been closed so far
VANDANA, Mumbai
After being at the receiving end of investors' wrath, the real estate sector is back on the radar of private equity (PE) investors. Real estate consultants say PE funds are now finding good investment opportunities in the sector.
The high level of interest is quite clear in the recent wave of qualified institutional placements from real estate companies.
According to Grant Thornton's deal tracker, Orient Global. Sandstone Capital, HSBC and Och-Ziff Capital recently invested $325 million in Unitech. Standard Chartered Private Equity has pumped in an undisclosed sum in Man Infraconstruction. And TPG Capital and Fidelity have invested in the qualified institutional placement by Indiabulls.
While most action has been in listed companies, project level investments, too, are picking up. "Private equity funding in real estate has certainly revived. The difference being that funds are now looking at smaller projects that can ensure cash flows, rather than big projects. The deal size has also become smaller and is in the range of $20-50 million," said Amit Goenka, national director (capital transactions), Knight Frank.
Experts say valuations have become more reasonable in the sector, post the downturn. A part of the revival is driven by easing liquidity in the system and new sales.
"There's a lot of action in the Mumbai real estate market. Price discovery has happened and volumes seem to be coming back. There is an expectation that not much downside is left now. From investors' point of view, there is ample liquidity. Election results have given another hope to the sector. We are looking at several projects," said Shahzaad Dalal, VC & MD at IL&FS Investment managers.
Jai Mavani, executive di¬ector, KPMG, said, "The wait and-watch period is certainly 'over. PEs have become more :cautious and are not looking at risky projects. They are looking at structured equity deals, rather than plain vanilla structures."
According to Venture Intelligence, 2008 saw deals worth $8.4 billion in the sector. This year, the number is comparatively lower, as the deals have just started to pick up. Only three deals worth $80 million have been closed so far. In one of the largest deals so far this year, Sun Apollo Ventures acquired 15 per cent in Keystone Realtors for Rs 200 crore. IL&FS Realty Fund has picked up 15 per cent stake in Infrastructure Ventures India, a special purpose vehicle floated by Mumbai-based Akruti City, for Rs 200 crore.
Business Standard, May 28, 2009, Section II, Page 13
2008 saw deals worth $8.4 billion in the real estate sector. This year, the number is comparatively lower, as the deals have just started to pick up. Only three deals worth $80 million have been closed so far
VANDANA, Mumbai
After being at the receiving end of investors' wrath, the real estate sector is back on the radar of private equity (PE) investors. Real estate consultants say PE funds are now finding good investment opportunities in the sector.
The high level of interest is quite clear in the recent wave of qualified institutional placements from real estate companies.
According to Grant Thornton's deal tracker, Orient Global. Sandstone Capital, HSBC and Och-Ziff Capital recently invested $325 million in Unitech. Standard Chartered Private Equity has pumped in an undisclosed sum in Man Infraconstruction. And TPG Capital and Fidelity have invested in the qualified institutional placement by Indiabulls.
While most action has been in listed companies, project level investments, too, are picking up. "Private equity funding in real estate has certainly revived. The difference being that funds are now looking at smaller projects that can ensure cash flows, rather than big projects. The deal size has also become smaller and is in the range of $20-50 million," said Amit Goenka, national director (capital transactions), Knight Frank.
Experts say valuations have become more reasonable in the sector, post the downturn. A part of the revival is driven by easing liquidity in the system and new sales.
"There's a lot of action in the Mumbai real estate market. Price discovery has happened and volumes seem to be coming back. There is an expectation that not much downside is left now. From investors' point of view, there is ample liquidity. Election results have given another hope to the sector. We are looking at several projects," said Shahzaad Dalal, VC & MD at IL&FS Investment managers.
Jai Mavani, executive di¬ector, KPMG, said, "The wait and-watch period is certainly 'over. PEs have become more :cautious and are not looking at risky projects. They are looking at structured equity deals, rather than plain vanilla structures."
According to Venture Intelligence, 2008 saw deals worth $8.4 billion in the sector. This year, the number is comparatively lower, as the deals have just started to pick up. Only three deals worth $80 million have been closed so far. In one of the largest deals so far this year, Sun Apollo Ventures acquired 15 per cent in Keystone Realtors for Rs 200 crore. IL&FS Realty Fund has picked up 15 per cent stake in Infrastructure Ventures India, a special purpose vehicle floated by Mumbai-based Akruti City, for Rs 200 crore.
Tata Realty to raise $1 b
Tata Realty to raise $1 b
The Hindu Business Line, May 28, 2009, Page 2
Mr Sanjay Ubale , Our Bureau, Mumbai
Tata Realty and Infrastructure said it plans to raise a $1 billion (Rs 4,700 crore) infrastructure fund to support projects worth Rs 20,000 crore that will be executed over the next three years.
The company will invest Rs 11,000 crore in real estate, Rs 5,000 crore on road projects and Rs 4,000 crore on other infrastructure projects, said Mr Sanjay Ubale, Managing Director & CEO, at a news conference here on Wednesday.
Around 20 per cent of the company’s earlier offshore fund of $700 million has been deployed, he said.
TRIL is a wholly-owned subsidiary of Tata Sons.
Separately, the company will raise Rs 1,400 crore in debt, said company officials.
Some of the larger projects won by TRIL include three SEZs – one a 25-acre SEZ at Chennai for Rs 3,800 crore, the other two being IT SEZs in Ahmedabad and in Pune. A 7-lakh sq ft residential complex in Amritsar is under development, and a 35-acre residential and mixed-use project is being evaluated at Gurgaon.
Although the real estate market is still sluggish, this is not an inappropriate time for developing SEZ projects or malls, said Mr Ubale: “Real estate is cyclical and our projects will probably be ready as the markets pick up. In addition we do stand to benefit from lower commodity prices.”
Roads, metro and mono-rail and airport projects are also under consideration: TRIL has tie-ups with Mitsubishi for bidding for metro projects; with Grandi Stazioni of Italy for redevelopment of New Delhi Railway station; with Changi Airports for Amritsar and Udaipur airports; and with Atlantia spA of Italy for roads and highways.
A recent win has been the four-laning National Highway Authority project of a 110-km Pune-Solapur stretch at Rs 1,400 crore, in tie-up with the Italian company. The SPV, which will undertake the project, will be a 50:50 joint venture between TRIL and Atlantia, each putting in Rs 280 crore, with debt requirement for the project at Rs 970 crore.
The Hindu Business Line, May 28, 2009, Page 2
Mr Sanjay Ubale , Our Bureau, Mumbai
Tata Realty and Infrastructure said it plans to raise a $1 billion (Rs 4,700 crore) infrastructure fund to support projects worth Rs 20,000 crore that will be executed over the next three years.
The company will invest Rs 11,000 crore in real estate, Rs 5,000 crore on road projects and Rs 4,000 crore on other infrastructure projects, said Mr Sanjay Ubale, Managing Director & CEO, at a news conference here on Wednesday.
Around 20 per cent of the company’s earlier offshore fund of $700 million has been deployed, he said.
TRIL is a wholly-owned subsidiary of Tata Sons.
Separately, the company will raise Rs 1,400 crore in debt, said company officials.
Some of the larger projects won by TRIL include three SEZs – one a 25-acre SEZ at Chennai for Rs 3,800 crore, the other two being IT SEZs in Ahmedabad and in Pune. A 7-lakh sq ft residential complex in Amritsar is under development, and a 35-acre residential and mixed-use project is being evaluated at Gurgaon.
Although the real estate market is still sluggish, this is not an inappropriate time for developing SEZ projects or malls, said Mr Ubale: “Real estate is cyclical and our projects will probably be ready as the markets pick up. In addition we do stand to benefit from lower commodity prices.”
Roads, metro and mono-rail and airport projects are also under consideration: TRIL has tie-ups with Mitsubishi for bidding for metro projects; with Grandi Stazioni of Italy for redevelopment of New Delhi Railway station; with Changi Airports for Amritsar and Udaipur airports; and with Atlantia spA of Italy for roads and highways.
A recent win has been the four-laning National Highway Authority project of a 110-km Pune-Solapur stretch at Rs 1,400 crore, in tie-up with the Italian company. The SPV, which will undertake the project, will be a 50:50 joint venture between TRIL and Atlantia, each putting in Rs 280 crore, with debt requirement for the project at Rs 970 crore.
Time for a realty check
Time for a realty check
Business Line, Brand Line, May 28, 2009, Page 1
Hit by the slowdown, the realty sector sees some innovative thinking as marketing budgets are cut.
Anjana Chandramouly Swetha Kannan
If you thought buy-one-get-one free offers were limited to trousers, shoes and other small-ticket items, think again. You could get houses too for free, thanks to Orange Properties, which came out with a ‘buy-one-flat-get-one-free’ offer recently for its Orange Resorts in Devanahalli, in Bangalore.
Sales didn’t quite skyrocket and the advertising campaign across print and outdoor met with mixed response, but given the current market conditions perhaps that’s understandable.
With real estate being struck badly in the slowdown, real estate developers, who were once riding a high, have now tightened advertising and marketing expenses. They have also had to think out of the box even while operating on leaner budgets. They have been forced to rework their marketing strategies to woo consumers at a time when the propensity to buy is not very high. Marketing initiatives may be fewer but they are becoming more focussed, specific and project-based, using direct and candid communication. And pricing is obviously the key premise around which the initiatives revolve.
Sandeep Trivedi, National Head, Development Consulting, Cushman & Wakefield, a real estate services firm, analyses the scene. He says, “Developers have definitely reduced the cost expenditure on marketing and advertising initiatives. The conventional forms of advertising, such as hoardings, advertisements in newspaper/magazines, participation in property exhibitions and sponsoring events have come down drastically and given way to more direct marketing initiatives. These include one-to-one meetings with prospective clients, more business development and sales calls. Even in the event of print advertising, the media is focusing on the price component and are willing to provide large area units at discounted prices. Developers have also been conservative in launching new projects in the current scenario and are, instead, focusing on selling existing projects.”
Innovation is the need of the hour to capture attention. Sridhar G. Kulkarni, Head - Marketing (Karnataka and Andhra Pradesh), Shriram Properties, says its marketing efforts are focused on activities that have a direct connect and reach with potential customers. “Our response to the economic slowdown is to focus on marketing initiatives that would be productive. There have been more initiatives targeted at specific groups which are result-oriented.”
Beat the blues
The realty sector has been the worst affected due to the slowdown. And ironically it is this very theme - recession - that real estate developers hope to bank on while selling their properties. Price is the main appeal.
The ’buy one flat, get one free’ scheme for the Orange Resorts project was devised obviously to beat the recession as no one had ever thought of offering a flat free with the purchase of a flat, says Pericho Prabhu, Vice-President, Orange Properties, which has cut down ad spends by nearly 30 per cent. The rationale, he says, was “instead of giving discounts and slashing the prices like other builders, we offer a 700-sq-ft flat free on the purchase of any flat. The flats in the project start from 900 sq ft upwards and cost Rs 26 lakh and above. The booking amount was Rs 2 lakh along with a down payment of 15 per cent of the total cost of the flat. Once these were paid in total, we got into an agreement with the buyer for the 700-sq-ft free flat. But in the second flat, the customer has to bear the cost of the car park and other statutory charges such as power and water.”
Although realty is one of the worst hit sectors in the economy, recession is not all bad, says Bangalore-based property developer Value Designbuild. In fact, it thanks the ‘recession’ for softening borrowing rates and stamp duty. In its radio and print ad campaign – ‘Thank God It’s Recession!’ - to promote its residential complex in an upmarket neighbourhood, the builder urges people to hurry because “nothing lasts forever. Not even a recession.”
Says Koshy Varghese, Managing Director, Value Designbuild, “The dreaded word seems to be there every day. It seems as if recession is a ‘death sentence’ passed on our country. It is not so. We would like people to seize the moment and understand what the opportunity is. Many companies grew during recessionary periods. We hope to promote a general feeling of optimism rather than the continued negativity that prevails. We are focussing on the benefits of recession. We have had programmes on radio where we have called in for listeners’ comments on the positives they see in the recession and the best answers have got goodie bags from us.”
The campaign was also targeted at trying to get people out of a negative mindset “as we believe that every situation presents an opportunity and we just need to grab it and try and benefit from it.”
While many developers are still marketing through above-the-line initiatives, Sobha Developers has decided to look below. The company is now looking at events to promote its projects. The first such event, Sobha Home Mela, was organised in February this year in Bangalore with about 1,500 units on display across 18 projects including villas, row houses, luxury apartments, semi-luxury apartments and plots.
Walk-ins of about 1,800 during this mela encouraged the company to organise a three-day ‘Sobha Sunbeam Hungama’ in April to market its Sobha Sunbeam project in the Garden City, wherein the company offered a discount of about Rs 13 lakh over the February prices, and an on-the-spot booking offer of Rs 50,000. “In February, the company charged Rs 2, 970 per sq ft, which was slashed to Rs 2,254 per sq ft,” says Keshav Pandey, Executive Director - Sales, Marketing and Corporate Communications, Sobha Developers. About 78 units were on offer at the Hungama.
“More people would be willing to take up this offer as they would prefer to buy a ready-to-move-in apartment, as the project is nearing completion. Also, the apartment would be available at the ‘magic’ price of sub-Rs 50 lakh (Rs 49.77 lakh excluding registration and stamp duty charges),” Pandey said during the event.
As part of its branding exercise, Delhi-based DLF found a perfect match in the Indian Premier League. Apart from being the title sponsors of the event, the company ran ticker ads on TV during the matches. According to a DLF spokesperson, “With its tremendous visibility, DLF IPL has helped us become a household name across the world. The rationale behind the tickers was to highlight our projects in all the eight cities of India where DLF IPL was played last year.”
Newer target markets
Media and marketing activities apart, developers are now looking at newer markets to tap into, since the IT/BPO employees are not the favourites anymore. “We are targeting the middle-class community in the non-IT sphere which is actually a huge pie - PSUs, all working professionals such as bank employees, private sector employees and small and medium businessmen who have steady income to avail themselves of loans, and look at property as a long-term appreciating asset,” says Prabhu of Orange Properties.
For its Garrison property on Tumkur Road, near Bangalore, Sobha Developers has seen around 300-odd bookings from Army personnel. Targeting such a group or institution for its sales and offering exclusivity to them would bring in “concrete results”, says J.C. Sharma, Managing Director, Sobha Developers. “When the markets were booming, there were fewer enquiries, but higher sales. Now, enquiries are more, but don’t necessarily translate into sales. So we have to ensure aggressive marketing strategies to ensure conversion,” he adds.
“The current economic downturn and IT slowdown has definitely had a demand impact on the high-end residential sector. Till date developers had long ignored the middle income and lower income groups which account for the majority of the population, but fetch limited margins for developers. With the present market condition, added to dismal sectoral demand and their liquidity problems, developers have started exploring affordable housing projects,” says Trivedi of Cushman.
This is a growing trend with the launch of a few small-sized apartments (700 sq ft - 1,000 sq.ft.) from developers such as Golden Gate Properties, Shriram Properties, Puravankara and Nagarjuna Constructions. DLF too has increased focus on affordable housing to cater to mid-income segments.
Tata Housing has literally gone one step ahead to target the lower income groups with its Shubh Griha project that plans to offer “smart, value homes” to people across India. Shubh Griha will launch its property in the suburb of Boisar in Mumbai, followed by tier I and II cities across the country. The homes will be priced between Rs 3.9 lakh and Rs 6.7 lakh.
“We have a number of market activation plans. We plan to go out directly to our customers and communicate to them what we are offering and how it’s not just a price game but a lifestyle that we have to offer. We also have been advertising in publications relevant to the the low income bracket consumers to reach out to them with the right message,” says Brotin Banerjee, Managing Director and Chief Executive Officer of Tata Housing.
How successful have developers been with their recent marketing campaigns and newer target markets? Have they brought buyers back into the market? Though it cannot be denied that these initiatives have been successful in rekindling buyer interest in the real estate market, the real success of such ideas in terms of actual sales is still questionable. “The urban Indian consumer is intelligent. So while an ad can generate interest, it cannot guarantee a transaction. Customers should check the details of an offer before making an investment decision,” says Trivedi of Cushman & Wakefield.
Developers agree that the market remains challenging, but the good news is that the negativity could soon be a thing of the past. “There is no fear now that the market could collapse. The worst is over. We are now trying to tap the market,” says Sobha’s Sharma, adding that in the next two quarters things might fall back in place.
Varghese of Value Designbuild says some consumer confidence is returning to the market. “How much this has to do with pricing is debatable. However, what is encouraging is that enquiries are back in some form unlike the end of 2008 and early 2009. Frankly, there is nothing that can be done except for credit becoming easier to both the consumer and the developer. The developers must somehow be able to construct and complete the buildings. Responsible marketing coupled with some interest rate benefits and tax breaks can help revive consumer interest in housing.”
Business Line, Brand Line, May 28, 2009, Page 1
Hit by the slowdown, the realty sector sees some innovative thinking as marketing budgets are cut.
Anjana Chandramouly Swetha Kannan
If you thought buy-one-get-one free offers were limited to trousers, shoes and other small-ticket items, think again. You could get houses too for free, thanks to Orange Properties, which came out with a ‘buy-one-flat-get-one-free’ offer recently for its Orange Resorts in Devanahalli, in Bangalore.
Sales didn’t quite skyrocket and the advertising campaign across print and outdoor met with mixed response, but given the current market conditions perhaps that’s understandable.
With real estate being struck badly in the slowdown, real estate developers, who were once riding a high, have now tightened advertising and marketing expenses. They have also had to think out of the box even while operating on leaner budgets. They have been forced to rework their marketing strategies to woo consumers at a time when the propensity to buy is not very high. Marketing initiatives may be fewer but they are becoming more focussed, specific and project-based, using direct and candid communication. And pricing is obviously the key premise around which the initiatives revolve.
Sandeep Trivedi, National Head, Development Consulting, Cushman & Wakefield, a real estate services firm, analyses the scene. He says, “Developers have definitely reduced the cost expenditure on marketing and advertising initiatives. The conventional forms of advertising, such as hoardings, advertisements in newspaper/magazines, participation in property exhibitions and sponsoring events have come down drastically and given way to more direct marketing initiatives. These include one-to-one meetings with prospective clients, more business development and sales calls. Even in the event of print advertising, the media is focusing on the price component and are willing to provide large area units at discounted prices. Developers have also been conservative in launching new projects in the current scenario and are, instead, focusing on selling existing projects.”
Innovation is the need of the hour to capture attention. Sridhar G. Kulkarni, Head - Marketing (Karnataka and Andhra Pradesh), Shriram Properties, says its marketing efforts are focused on activities that have a direct connect and reach with potential customers. “Our response to the economic slowdown is to focus on marketing initiatives that would be productive. There have been more initiatives targeted at specific groups which are result-oriented.”
Beat the blues
The realty sector has been the worst affected due to the slowdown. And ironically it is this very theme - recession - that real estate developers hope to bank on while selling their properties. Price is the main appeal.
The ’buy one flat, get one free’ scheme for the Orange Resorts project was devised obviously to beat the recession as no one had ever thought of offering a flat free with the purchase of a flat, says Pericho Prabhu, Vice-President, Orange Properties, which has cut down ad spends by nearly 30 per cent. The rationale, he says, was “instead of giving discounts and slashing the prices like other builders, we offer a 700-sq-ft flat free on the purchase of any flat. The flats in the project start from 900 sq ft upwards and cost Rs 26 lakh and above. The booking amount was Rs 2 lakh along with a down payment of 15 per cent of the total cost of the flat. Once these were paid in total, we got into an agreement with the buyer for the 700-sq-ft free flat. But in the second flat, the customer has to bear the cost of the car park and other statutory charges such as power and water.”
Although realty is one of the worst hit sectors in the economy, recession is not all bad, says Bangalore-based property developer Value Designbuild. In fact, it thanks the ‘recession’ for softening borrowing rates and stamp duty. In its radio and print ad campaign – ‘Thank God It’s Recession!’ - to promote its residential complex in an upmarket neighbourhood, the builder urges people to hurry because “nothing lasts forever. Not even a recession.”
Says Koshy Varghese, Managing Director, Value Designbuild, “The dreaded word seems to be there every day. It seems as if recession is a ‘death sentence’ passed on our country. It is not so. We would like people to seize the moment and understand what the opportunity is. Many companies grew during recessionary periods. We hope to promote a general feeling of optimism rather than the continued negativity that prevails. We are focussing on the benefits of recession. We have had programmes on radio where we have called in for listeners’ comments on the positives they see in the recession and the best answers have got goodie bags from us.”
The campaign was also targeted at trying to get people out of a negative mindset “as we believe that every situation presents an opportunity and we just need to grab it and try and benefit from it.”
While many developers are still marketing through above-the-line initiatives, Sobha Developers has decided to look below. The company is now looking at events to promote its projects. The first such event, Sobha Home Mela, was organised in February this year in Bangalore with about 1,500 units on display across 18 projects including villas, row houses, luxury apartments, semi-luxury apartments and plots.
Walk-ins of about 1,800 during this mela encouraged the company to organise a three-day ‘Sobha Sunbeam Hungama’ in April to market its Sobha Sunbeam project in the Garden City, wherein the company offered a discount of about Rs 13 lakh over the February prices, and an on-the-spot booking offer of Rs 50,000. “In February, the company charged Rs 2, 970 per sq ft, which was slashed to Rs 2,254 per sq ft,” says Keshav Pandey, Executive Director - Sales, Marketing and Corporate Communications, Sobha Developers. About 78 units were on offer at the Hungama.
“More people would be willing to take up this offer as they would prefer to buy a ready-to-move-in apartment, as the project is nearing completion. Also, the apartment would be available at the ‘magic’ price of sub-Rs 50 lakh (Rs 49.77 lakh excluding registration and stamp duty charges),” Pandey said during the event.
As part of its branding exercise, Delhi-based DLF found a perfect match in the Indian Premier League. Apart from being the title sponsors of the event, the company ran ticker ads on TV during the matches. According to a DLF spokesperson, “With its tremendous visibility, DLF IPL has helped us become a household name across the world. The rationale behind the tickers was to highlight our projects in all the eight cities of India where DLF IPL was played last year.”
Newer target markets
Media and marketing activities apart, developers are now looking at newer markets to tap into, since the IT/BPO employees are not the favourites anymore. “We are targeting the middle-class community in the non-IT sphere which is actually a huge pie - PSUs, all working professionals such as bank employees, private sector employees and small and medium businessmen who have steady income to avail themselves of loans, and look at property as a long-term appreciating asset,” says Prabhu of Orange Properties.
For its Garrison property on Tumkur Road, near Bangalore, Sobha Developers has seen around 300-odd bookings from Army personnel. Targeting such a group or institution for its sales and offering exclusivity to them would bring in “concrete results”, says J.C. Sharma, Managing Director, Sobha Developers. “When the markets were booming, there were fewer enquiries, but higher sales. Now, enquiries are more, but don’t necessarily translate into sales. So we have to ensure aggressive marketing strategies to ensure conversion,” he adds.
“The current economic downturn and IT slowdown has definitely had a demand impact on the high-end residential sector. Till date developers had long ignored the middle income and lower income groups which account for the majority of the population, but fetch limited margins for developers. With the present market condition, added to dismal sectoral demand and their liquidity problems, developers have started exploring affordable housing projects,” says Trivedi of Cushman.
This is a growing trend with the launch of a few small-sized apartments (700 sq ft - 1,000 sq.ft.) from developers such as Golden Gate Properties, Shriram Properties, Puravankara and Nagarjuna Constructions. DLF too has increased focus on affordable housing to cater to mid-income segments.
Tata Housing has literally gone one step ahead to target the lower income groups with its Shubh Griha project that plans to offer “smart, value homes” to people across India. Shubh Griha will launch its property in the suburb of Boisar in Mumbai, followed by tier I and II cities across the country. The homes will be priced between Rs 3.9 lakh and Rs 6.7 lakh.
“We have a number of market activation plans. We plan to go out directly to our customers and communicate to them what we are offering and how it’s not just a price game but a lifestyle that we have to offer. We also have been advertising in publications relevant to the the low income bracket consumers to reach out to them with the right message,” says Brotin Banerjee, Managing Director and Chief Executive Officer of Tata Housing.
How successful have developers been with their recent marketing campaigns and newer target markets? Have they brought buyers back into the market? Though it cannot be denied that these initiatives have been successful in rekindling buyer interest in the real estate market, the real success of such ideas in terms of actual sales is still questionable. “The urban Indian consumer is intelligent. So while an ad can generate interest, it cannot guarantee a transaction. Customers should check the details of an offer before making an investment decision,” says Trivedi of Cushman & Wakefield.
Developers agree that the market remains challenging, but the good news is that the negativity could soon be a thing of the past. “There is no fear now that the market could collapse. The worst is over. We are now trying to tap the market,” says Sobha’s Sharma, adding that in the next two quarters things might fall back in place.
Varghese of Value Designbuild says some consumer confidence is returning to the market. “How much this has to do with pricing is debatable. However, what is encouraging is that enquiries are back in some form unlike the end of 2008 and early 2009. Frankly, there is nothing that can be done except for credit becoming easier to both the consumer and the developer. The developers must somehow be able to construct and complete the buildings. Responsible marketing coupled with some interest rate benefits and tax breaks can help revive consumer interest in housing.”
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