Monday, June 29, 2009
Sensex surges 419 pts on positive cues
Sensex surges 419 pts on positive cues
The Financial Express, June 27, 2009, Page 1
Reuters, Mumbai
The Bombay Stock Exchange benchmark Sensex surged over 419 points on Friday on frantic buying as investors took cues from higher Asian and European peers and built positions after the market had fallen 7.2 per cent over the past two weeks.
The Sensex, which commenced the day higher, spurted by 419.02 or 2.92 per cent to settle at 14,764.64, after touching a high of 14,781.94 point.
The broad-based 50-share National Stock Exchange index Nifty spurted by 133.65 points to 4,375.50, after reaching the day's high of 4,383.75 points.
The rally was backed by heavyweight stocks of Reliance Industries, Reliance Comm, Reliance Infra, Infosys Technologies, DLF Ltd, Larsen and Toubro, BHEL, State Bank of India and ICICI Bank.
Marketmen said buying activity picked up at the fag-end after an international rating agency said the Indian stocks are fairly valued.
The Tokyo-based Nomura Holding said the Indian stocks are "fairly valued" after a 49 per cent advance this year and further gains depend on government policies to boost economic growth and pare a budget deficit.
"There is more brisk buying by funds to create fresh positions at the beginning of the July-month contract in the derivatives segment today," said NSE broker Rajiv Malik.
US dollar ends sharply cheaper against Rupee
The U.S. Dollar ended sharply cheaper against the Rupee at Rs.48.10/11 per dollar but the Pound Sterling turned higher at Rs.79.24/26 per pound at the close of the Interbank Foreign Exchange (Forex) market in Mumbai on Friday.
The Financial Express, June 27, 2009, Page 1
Reuters, Mumbai
The Bombay Stock Exchange benchmark Sensex surged over 419 points on Friday on frantic buying as investors took cues from higher Asian and European peers and built positions after the market had fallen 7.2 per cent over the past two weeks.
The Sensex, which commenced the day higher, spurted by 419.02 or 2.92 per cent to settle at 14,764.64, after touching a high of 14,781.94 point.
The broad-based 50-share National Stock Exchange index Nifty spurted by 133.65 points to 4,375.50, after reaching the day's high of 4,383.75 points.
The rally was backed by heavyweight stocks of Reliance Industries, Reliance Comm, Reliance Infra, Infosys Technologies, DLF Ltd, Larsen and Toubro, BHEL, State Bank of India and ICICI Bank.
Marketmen said buying activity picked up at the fag-end after an international rating agency said the Indian stocks are fairly valued.
The Tokyo-based Nomura Holding said the Indian stocks are "fairly valued" after a 49 per cent advance this year and further gains depend on government policies to boost economic growth and pare a budget deficit.
"There is more brisk buying by funds to create fresh positions at the beginning of the July-month contract in the derivatives segment today," said NSE broker Rajiv Malik.
US dollar ends sharply cheaper against Rupee
The U.S. Dollar ended sharply cheaper against the Rupee at Rs.48.10/11 per dollar but the Pound Sterling turned higher at Rs.79.24/26 per pound at the close of the Interbank Foreign Exchange (Forex) market in Mumbai on Friday.
Housing sector sees a silver lining, sales up 25%
Housing sector sees a silver lining, sales up 25%
The Economic Times, June 28, 2009, Page 1
Neha Dewan & Anand Rawani NEW DELHI
ACTIVITY levels are gaining traction in the near moribund housing market as a flurry of interest rate cuts, price drops and the building industry’s focus on affordable housing start to lure buyers back into the market.
A cross section of banks, property developers and real estate consultancies that SundayET spoke to confirmed that the rise in activity levels since the start of the year had picked up momentum in the last three months, with some in the sector saying that sales were up by as much as 25-30% since April, after witnessing a growth of 10-15% during the first quarter of 2009.
India’s property market started showing signs of serious trouble nearly a year ago with first the American sub-prime crisis and later the Lehman bankruptcy playing havoc. The overpriced projects by builders found few takers which was worsened with the IT industry facing a major setback. Builders were stuck with high-end apartments which had no takers. There was a severe drop in sales with people wanting to conserve resources. As a result, property prices too fell 30-45% since peak of 2007, according to industry estimates.
But today the scenario is different, with builders getting a mix of mid end and affordable housing into their portfolio. Raminder Grover, CEO – Homebay Residential, Jones Lang LaSalle Meghraj, says the revival in sales has been, conservatively speaking, to the tune of around 25% across the mid-to-high income segments, according to his company’s sales records.
Rohtas Goel, CMD of Delhi-based Omaxe too says there has been a 30% increase in sales thanks to factors such as a reversal in general economic sentiment after the elections and more options available in affordable housing.
Statistics too would appear to bear this out. India’s largest real estate developer DLF says it has sold almost 1,500 flats in various cities since April, notably some 400 flats in its mainstay market Gurgaon, 700 in Bangalore, 100 plots in Indore, 200 flats in Hyderabad and 50 in Cochin.
Rival Unitech has managed to sell more than 4,000 units in the last two and a half months in the National Capital Region, Chennai and Mumbai. Omaxe has also sold almost 500 apartments in its Omaxe Eternity project in Vrindavan.
Niranjan Hiranandani, MD of Hiranandani Developers says there had been a sale of 7,000 apartments across the industry, mainly in Mumbai suburbs, over the last 60 days.
Despite indications of improving demand, builders don’t seem to be in a hurry to raise prices. They are conscious that demand was up due to price cuts and the affordable housing strategy.
The Economic Times, June 28, 2009, Page 1
Neha Dewan & Anand Rawani NEW DELHI
ACTIVITY levels are gaining traction in the near moribund housing market as a flurry of interest rate cuts, price drops and the building industry’s focus on affordable housing start to lure buyers back into the market.
A cross section of banks, property developers and real estate consultancies that SundayET spoke to confirmed that the rise in activity levels since the start of the year had picked up momentum in the last three months, with some in the sector saying that sales were up by as much as 25-30% since April, after witnessing a growth of 10-15% during the first quarter of 2009.
India’s property market started showing signs of serious trouble nearly a year ago with first the American sub-prime crisis and later the Lehman bankruptcy playing havoc. The overpriced projects by builders found few takers which was worsened with the IT industry facing a major setback. Builders were stuck with high-end apartments which had no takers. There was a severe drop in sales with people wanting to conserve resources. As a result, property prices too fell 30-45% since peak of 2007, according to industry estimates.
But today the scenario is different, with builders getting a mix of mid end and affordable housing into their portfolio. Raminder Grover, CEO – Homebay Residential, Jones Lang LaSalle Meghraj, says the revival in sales has been, conservatively speaking, to the tune of around 25% across the mid-to-high income segments, according to his company’s sales records.
Rohtas Goel, CMD of Delhi-based Omaxe too says there has been a 30% increase in sales thanks to factors such as a reversal in general economic sentiment after the elections and more options available in affordable housing.
Statistics too would appear to bear this out. India’s largest real estate developer DLF says it has sold almost 1,500 flats in various cities since April, notably some 400 flats in its mainstay market Gurgaon, 700 in Bangalore, 100 plots in Indore, 200 flats in Hyderabad and 50 in Cochin.
Rival Unitech has managed to sell more than 4,000 units in the last two and a half months in the National Capital Region, Chennai and Mumbai. Omaxe has also sold almost 500 apartments in its Omaxe Eternity project in Vrindavan.
Niranjan Hiranandani, MD of Hiranandani Developers says there had been a sale of 7,000 apartments across the industry, mainly in Mumbai suburbs, over the last 60 days.
Despite indications of improving demand, builders don’t seem to be in a hurry to raise prices. They are conscious that demand was up due to price cuts and the affordable housing strategy.
Low-cost housing’s slow rise
Low-cost housing’s slow rise
The Hindu Business Line, June 28, 2009, Page 15
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A high-volume, low-profit proposition, and with land still costly, housing for the weaker sections is not making much headway.
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— N. Balaji
At the beginning of the Eleventh Plan, the Government estimated a shortage of about 25 million houses in urban area.
S. Shanker
While the affordable housing segment is in the limelight, generating some demand in an overall sluggish real-estate market, low-cost housing, essentially for the low-income group and economically weaker sections, appears to be making little headway.
The Government estimated a shortage of about 25 million houses in urban area at the beginning of the Eleventh Plan, of which 97 per cent is in the low-income group.
Mumbai has seen a few launches in the last two to three months, one of them being the Tata Housing project at Boisar, about 100 km from the city. The company received such a good response for its initial offer of 1,000 units that it raised the number to 1,300. The apartments, in the 283-465 sq.ft range, cost between Rs 3.9 lakh and Rs 6.7 lakh. Tata Housing has also tied up with Micro Housing Finance Corporation to provide easy finance to its customers.
LAND COST
Mr Brotin Banerjee, Managing Director and Chief Executive Officer, Tata Housing, feels land cost is a major issue and it should be understood that low-cost housing is high volume and lower profits, compared to high-end formats. When it comes to joint ventures, the philosophy of the landowner should be in harmony with that of the company, he says.
FUNDING, key ISSUE
Matheran Realty, among the first to launch low-cost homes in the price bracket of Rs 3-7 lakh in Karjat, which is also 100 km from Mumbai, says its buyers are finding it difficult to get finance. According to Mr Pravin Banavalikar, CEO, though his project has been pre-approved by 10 banks, only about 250 of over 1,800 applicants who sought loans have received sanctions. It has more to do with the eligibility criteria and loan ticket size, besides the high number of applicants, he says.
The Maharashtra Housing and Area Development Authority, which put up 3,863 flats in the affordable segment, received a tremendous response for its offering. But then, the number on sale was miniscule compared to the over four lakh applications it attracted.
Early this month, Housing Development and Infrastructure Ltd signed a joint venture agreement with the Mumbai Metropolitan Region Development Authority (MMRDA) to develop 525 acres in Virar. The company intends to build and hand over 13 million sq.ft to the MMRDA for rental housing and construct 39 million sq.ft for sale. The project would come under the affordable category and is scheduled for completion in six years.
PRO-POOR
In a recent development, DHFL Property Services Ltd, a 100 per cent subsidiary of housing finance company Dewan Housing Finance Corporation Ltd, tied up with developers to market affordable projects for low-wage earners. It will market a 2,400-unit project in Boisar. The apartments are of 380-500 sq.ft and priced at Rs 1,300 a sq.ft.
Mr B.K. Madhur, CEO, DHFL Property Services, says the company has always “focused on enabling access to home ownership for the lower and middle income groups across India through our mortgage finance company DHFL.”
The company intends to launch similar projects in other far-flung Mumbai suburbs such as Virar, Karjat and Badlapur, besides promoting such ventures in Ahmedabad, Chennai and Hyderabad in the coming months.
RISK FREE
Mr Ashutosh Limaye, Associate Director - Strategic Consulting, Jones Lang LaSalle Meghraj, says high land cost is a deterrent for developers to offer affordable homes. Otherwise, low-cost housing, especially in the metros, is virtually a risk-free proposition. Importantly, even in affordable housing, a developer would have certain minimum profit expectations and if the cost of land does not make these expectations feasible, there is no incentive for the developer to venture into the low-budget home segment.
Buyers of affordable housing can avail themselves of bank funding. But then, the affordable housing segment also brings in certain unique limitations with it.
In the case of mid-to-high-end housing, most buyers can readily produce proof of income, whereas only about 50 per cent of buyers in the affordable housing segment would be able to do so.
Nevertheless, due to the high rate of demand, this would not prevent a healthy absorption rate if such projects are launched.
The Hindu Business Line, June 28, 2009, Page 15
--------------------------------------------------------------------------------
A high-volume, low-profit proposition, and with land still costly, housing for the weaker sections is not making much headway.
--------------------------------------------------------------------------------
— N. Balaji
At the beginning of the Eleventh Plan, the Government estimated a shortage of about 25 million houses in urban area.
S. Shanker
While the affordable housing segment is in the limelight, generating some demand in an overall sluggish real-estate market, low-cost housing, essentially for the low-income group and economically weaker sections, appears to be making little headway.
The Government estimated a shortage of about 25 million houses in urban area at the beginning of the Eleventh Plan, of which 97 per cent is in the low-income group.
Mumbai has seen a few launches in the last two to three months, one of them being the Tata Housing project at Boisar, about 100 km from the city. The company received such a good response for its initial offer of 1,000 units that it raised the number to 1,300. The apartments, in the 283-465 sq.ft range, cost between Rs 3.9 lakh and Rs 6.7 lakh. Tata Housing has also tied up with Micro Housing Finance Corporation to provide easy finance to its customers.
LAND COST
Mr Brotin Banerjee, Managing Director and Chief Executive Officer, Tata Housing, feels land cost is a major issue and it should be understood that low-cost housing is high volume and lower profits, compared to high-end formats. When it comes to joint ventures, the philosophy of the landowner should be in harmony with that of the company, he says.
FUNDING, key ISSUE
Matheran Realty, among the first to launch low-cost homes in the price bracket of Rs 3-7 lakh in Karjat, which is also 100 km from Mumbai, says its buyers are finding it difficult to get finance. According to Mr Pravin Banavalikar, CEO, though his project has been pre-approved by 10 banks, only about 250 of over 1,800 applicants who sought loans have received sanctions. It has more to do with the eligibility criteria and loan ticket size, besides the high number of applicants, he says.
The Maharashtra Housing and Area Development Authority, which put up 3,863 flats in the affordable segment, received a tremendous response for its offering. But then, the number on sale was miniscule compared to the over four lakh applications it attracted.
Early this month, Housing Development and Infrastructure Ltd signed a joint venture agreement with the Mumbai Metropolitan Region Development Authority (MMRDA) to develop 525 acres in Virar. The company intends to build and hand over 13 million sq.ft to the MMRDA for rental housing and construct 39 million sq.ft for sale. The project would come under the affordable category and is scheduled for completion in six years.
PRO-POOR
In a recent development, DHFL Property Services Ltd, a 100 per cent subsidiary of housing finance company Dewan Housing Finance Corporation Ltd, tied up with developers to market affordable projects for low-wage earners. It will market a 2,400-unit project in Boisar. The apartments are of 380-500 sq.ft and priced at Rs 1,300 a sq.ft.
Mr B.K. Madhur, CEO, DHFL Property Services, says the company has always “focused on enabling access to home ownership for the lower and middle income groups across India through our mortgage finance company DHFL.”
The company intends to launch similar projects in other far-flung Mumbai suburbs such as Virar, Karjat and Badlapur, besides promoting such ventures in Ahmedabad, Chennai and Hyderabad in the coming months.
RISK FREE
Mr Ashutosh Limaye, Associate Director - Strategic Consulting, Jones Lang LaSalle Meghraj, says high land cost is a deterrent for developers to offer affordable homes. Otherwise, low-cost housing, especially in the metros, is virtually a risk-free proposition. Importantly, even in affordable housing, a developer would have certain minimum profit expectations and if the cost of land does not make these expectations feasible, there is no incentive for the developer to venture into the low-budget home segment.
Buyers of affordable housing can avail themselves of bank funding. But then, the affordable housing segment also brings in certain unique limitations with it.
In the case of mid-to-high-end housing, most buyers can readily produce proof of income, whereas only about 50 per cent of buyers in the affordable housing segment would be able to do so.
Nevertheless, due to the high rate of demand, this would not prevent a healthy absorption rate if such projects are launched.
Going green makes economic sense too
Going green makes economic sense too
The Hindu Business Line, June 28, 2009, Page 15
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The cost of constructing a green building is around 8 per cent higher than that of a non-green one, but the breakeven period is as low as 2-3 years through savings on energy costs.
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Divya Trivedi
Betting big on the profitability of ‘green buildings’, the promoter of Kensville Golf Club, Savvy Infrastructure Ltd, is investing around Rs 400 crore in developing both commercial and residential projects over the next two years.
“As a philosophy, we have been using green materials for our buildings but now we have committed ourselves to going green in all our constructions. Currently, we are working on a commercial project worth Rs 300 crore — Shapath V — coming up on 20,000 sq.yards. It will be a mix of ownership and lease and will also house the Intercontinental Crowne Plaza Hotel,” Mr Sameer Sinha, Director, told Business Line.
The company is aiming for a LEED certification in Gold by the Indian Green Building Council for Shapath V, which is located in an upcoming business area of Ahmedabad.
The building will meet all the specifications of a ‘green building’ and will have a positive impact on the long-term return on investments for the company, he said.
The cost of constructing a green building is around 8 per cent higher than that of a non-green building, but the breakeven period is as low as 2-3 years through savings on energy costs, etc, said Mr Sinha. The average annual cost of ownership of a green house can be 30-40 per cent lower than a non-green one and it makes more sense economically due to its high marketability and rentals, he added.
“Certain parameters such as operational efficiency and human wellbeing index are taken into consideration, which are visible only when one starts using the building,” he said.
The Rs 600-crore Savvy has just begun construction on Solaris — a 400-apartment residential complex. The total size of the project is Rs 100 crore and it is expected to be ready in two years’ time, according to Mr Sinha. It will be the first ‘green’ residential building complex in the city.
Incentivising
Though developers in other cities have done a lot of work in the environmental-friendly green building space, Gujarat is still lagging behind with just 13 buildings lined up for certification this year.
Stamp duty exemptions and additional FSI are some of the incentives that Maharashtra and Andhra Pradesh provide for green buildings that need to be provided in Gujarat as well, said Mr Jaxay Shah, President, Confederation of Real Estate Developers Association of India, Gujarat.
The Hindu Business Line, June 28, 2009, Page 15
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The cost of constructing a green building is around 8 per cent higher than that of a non-green one, but the breakeven period is as low as 2-3 years through savings on energy costs.
--------------------------------------------------------------------------------
Divya Trivedi
Betting big on the profitability of ‘green buildings’, the promoter of Kensville Golf Club, Savvy Infrastructure Ltd, is investing around Rs 400 crore in developing both commercial and residential projects over the next two years.
“As a philosophy, we have been using green materials for our buildings but now we have committed ourselves to going green in all our constructions. Currently, we are working on a commercial project worth Rs 300 crore — Shapath V — coming up on 20,000 sq.yards. It will be a mix of ownership and lease and will also house the Intercontinental Crowne Plaza Hotel,” Mr Sameer Sinha, Director, told Business Line.
The company is aiming for a LEED certification in Gold by the Indian Green Building Council for Shapath V, which is located in an upcoming business area of Ahmedabad.
The building will meet all the specifications of a ‘green building’ and will have a positive impact on the long-term return on investments for the company, he said.
The cost of constructing a green building is around 8 per cent higher than that of a non-green building, but the breakeven period is as low as 2-3 years through savings on energy costs, etc, said Mr Sinha. The average annual cost of ownership of a green house can be 30-40 per cent lower than a non-green one and it makes more sense economically due to its high marketability and rentals, he added.
“Certain parameters such as operational efficiency and human wellbeing index are taken into consideration, which are visible only when one starts using the building,” he said.
The Rs 600-crore Savvy has just begun construction on Solaris — a 400-apartment residential complex. The total size of the project is Rs 100 crore and it is expected to be ready in two years’ time, according to Mr Sinha. It will be the first ‘green’ residential building complex in the city.
Incentivising
Though developers in other cities have done a lot of work in the environmental-friendly green building space, Gujarat is still lagging behind with just 13 buildings lined up for certification this year.
Stamp duty exemptions and additional FSI are some of the incentives that Maharashtra and Andhra Pradesh provide for green buildings that need to be provided in Gujarat as well, said Mr Jaxay Shah, President, Confederation of Real Estate Developers Association of India, Gujarat.
Housing Ministry bats for mortgage guarantee fund
Housing Ministry bats for mortgage guarantee fund
The Hindu Business Line, June 28, 2009, Page 5
Our Bureau, New Delhi
The Housing and Urban Poverty Alleviation Minister, Ms Kumari Selja, has pitched for creation of a ‘Housing Mortgage Guarantee Fund’, entailing a corpus of about Rs 15,000 crore. The fund could be conceptualised as part of the Rajiv Awas Yojana, sources said. While submitting a proposal in this regard to the Finance Minister for inclusion in the Budget, Ms Selja maintained that an initial allocation of Rs 225 crore could be adequate to set up the fund.
HUDCO restructure
The Minister has also sought restructuring of HUDCO (Housing And Urban Development Corporation Ltd).
The Ministry has urged the Government to restructure HUDCO and permit it to float tax-free bonds to raise funds for housing institutions, sources said.
The Hindu Business Line, June 28, 2009, Page 5
Our Bureau, New Delhi
The Housing and Urban Poverty Alleviation Minister, Ms Kumari Selja, has pitched for creation of a ‘Housing Mortgage Guarantee Fund’, entailing a corpus of about Rs 15,000 crore. The fund could be conceptualised as part of the Rajiv Awas Yojana, sources said. While submitting a proposal in this regard to the Finance Minister for inclusion in the Budget, Ms Selja maintained that an initial allocation of Rs 225 crore could be adequate to set up the fund.
HUDCO restructure
The Minister has also sought restructuring of HUDCO (Housing And Urban Development Corporation Ltd).
The Ministry has urged the Government to restructure HUDCO and permit it to float tax-free bonds to raise funds for housing institutions, sources said.
Apex court bench set to replace green tribunal
Apex court bench set to replace green tribunal
The Financial Express, June, 27, 2009
Sandip Das, New Delhi
To avoid a confrontation with the judiciary, the government has decided to replace the proposed National Environment Tribunal with a green bench to be formed by Supreme Court judges.
The national green bench will be the highest judicial body to deal with environment related court cases, especially those where industrial plans are often ranged against civil society concerns. All civil disputes relating to mandatory environmental and forest clearances required for new industrial projects will be settled by this bench.
“The whole idea behind setting up the green bench is to form a specialised tribunal of judges with the ultimate authority resting with the Supreme Court.” Jairam Ramesh (pictured), Union minister for environment and forest, said on Friday.
Setting up the bench means the government has jettisoned the National Environment Tribunal Bill 2007 that would have clipped the authority of the judiciary at several levels to deal with environment issues. The Cabinet note circulated by the ministry of environment & forests notes that the bench would also replace the National Environment Tribunal, which was never notified as well as the National Environment Appellate Authority.
Ramesh said his ministry has moved a Cabinet note to set up this specialised judicial body. He also clarified that the ministry is working out a proposal to reconcile the working of the new green bench with the various committees set up to assist the Supreme Court in various environment-related cases. About 50 disputes relating mostly to mining, hydel and coal-based power projects are lying with the Supreme Court, as they have run into environmental and forest clearance related obstacles.
Applauding ‘judicial activism’, which took the lead in environmental protection, the minister said he is looking forward to work closely with the courts to ensure that environmental laws in the country are adhered to. According to Ritwick Dutta, a Delhi-based lawyer specialising in environmental issues, the government did not notify setting up of the environment tribunal nor the appellate authority despite setting up the latter in 1997. No key officials have been appointed to the authority so far.
“The position of chairman to NEAA is vacant for last nine years and position of vice-chairman is vacant for the last four years,’ Dutta told FE.
More transparent
Making environmental and forest clearances of industrial projects transparent, the environment ministry has changed the Environment (Protection) Rules, 1986. It is now mandatory for project developers to make public the ministry's clearance letter. The compliance status of project promoters also needs to be put in the public domain. The ministry proposes to put the status of all the 250 pending industrial projects for environmental and forest clearances online, for getting response from the public. The mandatory Environmental Impact Assessment norms makes the maximum time for clearances to 210 days for environment and 150 days for forests.
Unitech to raise Rs 1.3k cr via private placement
Unitech to raise Rs 1.3k cr via private placement
The Economic Times, June 27, 2009, Page 6
New Delhi: The country’s second largest realty firm, Unitech Ltd, began the process of raising a little over Rs 1,300 crore through private placement of equity to fund projects and service debt on Friday, sources said. The company, which had raised Rs 1,621 crore in the second half of April at Rs 38.50 per share through the qualified institutional placement (QIP) route, on Friday launched the second round at Rs 81 per share and the process is expected to be completed today itself, sources said. The Unitech spokesperson could not be contacted for comments. Unitech’s shares rose by 0.37% to close at Rs 82.35 on the Bombay Stock Exchange on Friday. After the first round of QIP, the promoters stake had come down to 51% from about 64%. Unitech has also raised Rs 1,000 crore by outright sale of two hotels.
The Economic Times, June 27, 2009, Page 6
New Delhi: The country’s second largest realty firm, Unitech Ltd, began the process of raising a little over Rs 1,300 crore through private placement of equity to fund projects and service debt on Friday, sources said. The company, which had raised Rs 1,621 crore in the second half of April at Rs 38.50 per share through the qualified institutional placement (QIP) route, on Friday launched the second round at Rs 81 per share and the process is expected to be completed today itself, sources said. The Unitech spokesperson could not be contacted for comments. Unitech’s shares rose by 0.37% to close at Rs 82.35 on the Bombay Stock Exchange on Friday. After the first round of QIP, the promoters stake had come down to 51% from about 64%. Unitech has also raised Rs 1,000 crore by outright sale of two hotels.
Unitech's debt to come down to Rs 5,000 crore post-QIP
Unitech's debt to come down to Rs 5,000 crore post-QIP
The Economic Times, June 29, 2009, Page 7
PTI NEW DELHI
Realty major Unitech's net debt will come down to Rs 5,000 crore by the first week of July, following an infusion of Rs 2,800 crore into the company last week through a private placement of shares, sources said. At present, the gross debt of Unitech -- the country's second-largest realty firm -- is Rs 7,800 crore, they added.
Sources said that post-QIP, the company's debt-equity ratio would come down to 0.52:1, among the lowest in the industry, and the net worth would be about Rs 9,600 crore. With this equity raising, all the debt-related issues would get addressed and the focus now would be to build on the sales momentum created over the past three months, during which Unitech sold over 3,000 flats comprising 4.5 mil-lion square feet, they added.
Unitech has been raising funds from the beginning of this year to improve the cash flow of the company and reduce its huge debt, which surged to nearly Rs 11,000 crore by the end of 2008.
Since April, the company has raised nearly Rs 4,500 crore through two rounds of qualified institutional placement (QIP).
Soon, a two-bedroom flat for Rs 25 lakh in Delhi
Soon, a two-bedroom flat for Rs 25 lakh in Delhi
Hindustan Times, June 27, 2009, Page 5
Here is some good news for Delhi residents who want to buy their dream home.
The National Building Construction Corporation Limited (NBCC), the largest public sector construction company, will launch its first housing scheme in the Capital early next year.
Up for grabs would be 2,500 flats, priced between Rs 25 lakh and Rs 60 lakh.
The NBCC has built several infrastructure projects across the country. One such project in the Capital is the Pitampura TV Tower.
It entered the real estate sector recently. The first residential housing project that it started was in Rajarhat, Kolkata, known as VIGYOR Towers.
In the Capital, the flats will come up on 30 acres of land adjoining the Ghitorni metro station on the Mehrauli-Gurgaon road. They will be ready by 2012.
Speaking to HT, Arup Roy Choudhury, chairman and managing director of NBCC said, “We have a land in Ghitorni, which we are planning to develop for residential housing. Details are being worked out for the housing project which will be launched early next year.”
This would be the PSU’s first housing project in Delhi.
“There is a huge shortage of housing in urban areas. We ventured into the sector to fill the huge demand-supply gap in the housing sector by providing affordable housing,” said Choudhury.
Earlier this year, the construction company had launched two housing schemes — in the mid and low-end category at Gurgaon in Haryana and Loni in Uttar Pradesh.
It is coming up with 4,000 flats in Gurgaon for employees of the Central government and public sector units.
The flats are priced between Rs 22 lakh and Rs 45 lakh.
Similarly, in Loni 2,000 flats are being developed in the mid segment category.
Fifty per cent of the flats will be reserved for government employees. The rest will be open to the public. These flats are priced between Rs 7 lakh and Rs 15 lakh.
Presently, there is a huge shortage of affordable housing in the Capital with the Delhi Development Authority — the sole development body in the city — failing to meet the housing requirement.
Focus on affordable housing, slums redevelopment: CREDAI
Focus on affordable housing, slums redevelopment: CREDAI
The Financial Express, June 29, 2009
R Ravichandran, Chennai
In a countdown to the forthcoming Union Budget, the Confederation of Real Estate Developers Association of India (CREDAI), the second biggest industry in India and the apex body of the organised real estate developers/builders in India with over 4,000 members, has, in a pre-Budget memorandum, put forth twin themes—affordable housing and slum redevelopment—to fuel the largest common Indian dream of owning a house.
The recommendations put forth by CREDAI are very much aligned to the announced objectives of the Central government on using infrastructure development to revive the economy. The real estate industry believes that it has the potential to play the role of the steam engine basis the fact that real estate sector alone can add to the GDP bottomline by 1-1.5% if efforts are made to reduce the shortage of urban housing while moving towards a slum free urban India.
The expectations are also derived from the prioritisation of affordable housing aforementioned in the Deepak Parekh Task Force Report constituted by the ministry of urban development and poverty alleviation, said Santosh Kumar Rungta, President, CREDAI.
He said the 11th Five-Year Plan has estimated the urban housing shortage of 24.7 million units with 99% of the shortage pertaining to economically weaker sections (EWS) and lower income groups (LIG). Home ownership is critical for this segment not only for economic reasons but also for the health of the nation from a social perspective in terms of stability, law and order and education and employment. In order to meet this target the government should come out with fiscal incentives to encourage affordable mass housing in the range between 300 sqft and 600 sq.ft and up to 1,000 sqft by providing subsidy in interest payable by home buyer
Around 80 million urban poor live in sub-standard or unsafe housing conditions under the abuse and continuous threat of displacement. From the slum dwellers perspective there is an additional tax burdens puts dampners. From a developer’s perspective in the context of slum redevelopment, arrangement for pre-sale financing is difficult because of the perceived risk factors, while from that of the government, land is scarce, and with the migrant population increasing every year, redevelopment is critical to the orderly development of cities. The improper utilisation of land is uneconomical from the government’s perspective.
The Financial Express, June 29, 2009
R Ravichandran, Chennai
In a countdown to the forthcoming Union Budget, the Confederation of Real Estate Developers Association of India (CREDAI), the second biggest industry in India and the apex body of the organised real estate developers/builders in India with over 4,000 members, has, in a pre-Budget memorandum, put forth twin themes—affordable housing and slum redevelopment—to fuel the largest common Indian dream of owning a house.
The recommendations put forth by CREDAI are very much aligned to the announced objectives of the Central government on using infrastructure development to revive the economy. The real estate industry believes that it has the potential to play the role of the steam engine basis the fact that real estate sector alone can add to the GDP bottomline by 1-1.5% if efforts are made to reduce the shortage of urban housing while moving towards a slum free urban India.
The expectations are also derived from the prioritisation of affordable housing aforementioned in the Deepak Parekh Task Force Report constituted by the ministry of urban development and poverty alleviation, said Santosh Kumar Rungta, President, CREDAI.
He said the 11th Five-Year Plan has estimated the urban housing shortage of 24.7 million units with 99% of the shortage pertaining to economically weaker sections (EWS) and lower income groups (LIG). Home ownership is critical for this segment not only for economic reasons but also for the health of the nation from a social perspective in terms of stability, law and order and education and employment. In order to meet this target the government should come out with fiscal incentives to encourage affordable mass housing in the range between 300 sqft and 600 sq.ft and up to 1,000 sqft by providing subsidy in interest payable by home buyer
Around 80 million urban poor live in sub-standard or unsafe housing conditions under the abuse and continuous threat of displacement. From the slum dwellers perspective there is an additional tax burdens puts dampners. From a developer’s perspective in the context of slum redevelopment, arrangement for pre-sale financing is difficult because of the perceived risk factors, while from that of the government, land is scarce, and with the migrant population increasing every year, redevelopment is critical to the orderly development of cities. The improper utilisation of land is uneconomical from the government’s perspective.
Work kickoff to set tax for foreign realty
Work kickoff to set tax for foreign realty
The Economic Times, June 29, 2009, Page 9
Souvik Sanyal NEW DELHI
THE Authority of Advance Rulings (AAR) has cleared the air on taxation of a foreign realtor that has a tie-up with an domestic entity by ordering that the duration of work must be calculated from the day the effective work on the project begins rather than from the date of signing the contract.
Calculating of the number of days of work is crucial for a foreign company as it determines the tax liability of its earnings.
Foreign firms are often signed up by Indian infrastructure developers to do a part of the construction work. Examples of such arrangements include the Dahej LNG project where Petronet LNG awarded contracts to a consortium of foreign companies.
The AAR ruling came in the case of Cal Dive Marine Construction (Mauritius) Ltd, which signed an agreement with Hindustan Oil Exploration Company (HOEC) for laying undersea pipelines in the Cauvery basin. The AAR was hearing the calculation of “the period of activity undertaken” by Cal Dive, a bone of contention between the I-T authorities and the company.
Cal Dive inked the pact with HOEC on December 4, 2007 for $59,174,200. As per the double taxation avoidance agreement between India and Mauritius, the construction project undertaken by the foreign company must continue for nine months so as to make its income taxable in India. While the revenue department contended that the duration of operations for Cal Dive should be calculated from the date of signing the contract, the company argued that the period of work was lesser than the ninemonth period. In a relief to Cal Dive, the AAR ruled that the date of calculation should be the date from when the work has begun.
Commenting on the AAR ruling, Ernst & Young tax partner Amitabh Singh said the decision will provide guidance on how to calculate the number of days for taxing foreign companies involved in construction in the country.
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