Real Estate Intelligence Service, Thursday, January 14, 2010

Stimulus may be pulled out in two phases

Stimulus may be pulled out in two phases
The Economic Times, January 14, 2010, Page 1

Deepshikha Sikarwar NEW DELHI

THE government may return to pre-crisis indirect tax rates in two phases beginning April, as it weighs potential derailing of economic recovery if this is done at one go in the government’s eagerness to move towards fiscal prudence.

The partial rollback suggestion figured in the first round of pre-budget consultations between Prime Minister Manmohan Singh, finance minister Pranab Mukherjee and other policymakers recently, a senior government official privy to the debate told ET.

Now that the economic growth appears to be firm with strong industrial output data, officials are looking to roll back easy policy measures taken to save the economy from losing growth momentum because of a global recession. While those measures helped realise the goal, they pushed fiscal deficit to a 16-year high of 6.8% of GDP.

Corporate profits are soaring, consumers are spending, but lobby groups are advocating continuation of easy policies to avoid derailing the recovery.

“There is definitely no need to continue the stimulus for sectors that are doing well... an overdose of stimulus is also not good,” said DK Joshi, principal economist, Crisil.

The government had cut the cenvat rate to 10% from 14% in December 2008 and then by another 2 percentage points to 8% in the interim budget in February 2009. The service tax rate was cut to 10% from 12%.

The first round of hike in cenvat, or the median excise duty rate levied on nearly 90% of goods manufactured, and service tax is likely in the forthcoming budget, said the official. The second phase is yet to figure in discussions.

The government’s view on rollback is strengthened by the factors that point to the prospects of the economy returning to 9% growth after industrial production grew a strong 11.7% in November 2009, the highest in about two years. Sales of automobiles, cement and TV sets are soaring.

The top 50 companies on the S&P CNX Nifty index, including Maruti Suzuki and Hindalco, may report a 27% jump in earnings growth for the December quarter, a forecast by ETIG shows.

Affordable housing boom... or bust?

Affordable housing boom... or bust?
The Economic Times, January 14, 2010, Page 7

Over The Past Year, Many Developers Have Either Resized Or Called Off Projects On Low Buyer Response

Sobia Khan BANGALORE

IT STARTEDwith a big bang. Affordable housing ventures by popular realty groups promised what the middle-class could not even dream of. Owning a flat in one of the metros, at rates which were within their reach, was a dream too good to be true. But after the initial blitzkrieg, the real picture emerging is far from promising.

Here is a view of the current affordable realty landscape. Bangalore-based Golden Gate Properties, which planned to launch 2,500 affordable apartments under the Commune brand, has called off its project. The firm, which planned to invest Rs 2,000 crore in its affordable ventures in Bangalore and Hyderabad, has done so mainly because of low bookings, states an employee at the company. The fate of its other ventures in Bangalore and Hyderabad also hangs in limbo.

Similarly, Gurgaon-based Omaxe, which had set up a subsidiary—National Affordable Housing and Infrastructure—to build cheap houses, is yet to launch its Bangalore project. The firm had plans to roll out apartments in the Rs 3-18 lakh range around Bangalore during the first phase. An email query to the company remains unanswered.

Omaxe had announced that it would roll out 10 lakh units across India. But only two projects in Faridabad have taken off. Its plans to invest Rs 8,000 crore in affordable housing projects across India seem to remain only on paper.

And for groups like Ozone, floated by the promoters of Reliance Industries and HDFC Venture Fund, the going has been slow. Sources say the company has managed to sell just 30% of its apartments (in the range of Rs 29-30 lakh) since its launch in January 2009. Despite the attractive price range, it has sold only 280 of its 912 units in Ozone Evergreen in Bangalore. S Vasudevan, MD, Ozone Group, however, insists that the off-take has not been that slow.

The Brigade group is also facing a lukewarm response from the market. “The company has received expressions of interest only for 900 apartments. Though the price is affordable, the distance (it’s located in a far-flung location) is making it unviable for buyers,” a source said. However, the company claims to have received 2,000 expressions of interest for its value homes. The firm plans to set up four affordable housing projects totalling 10,000 units across Bangalore in the next 6-12 months.

Similarly, CSC Construction, a recent entrant in the value home market with three housing projects, is also believed to be facing challenges. CSC which launched 2,180 units in mid-2008, is now setting up only 1,000 units. However, PC Sukanand, MD, CSC Constructions clarifies: “The response for all our projects have been good. We resized the projects due to legal issues.”

Over the past one year, developers have either resized or called off projects due to low buyer response. Digging deep into the reasons for this, realty analysts like Amit Bagaria, chairman of real estate consultancy firm Asipac, said, “Affordable housing will only work in locations which are easily commutable and has social infrastructure. Transparent pricing is also another important element.”

According to real estate consultancy firm Knight Frank, good connectivity to work places is the most important factor influencing buyers’ decision in selecting their residence. Pranay Vakil, chairman, Knight Frank, says: “Some projects were launched with the expectation that they can influence connectivity.” The Knight Frank survey also revealed that developers have to pay external and internal development charges to the government which are ultimately passed on to the consumer thus increasing the overall cost of a house. “The EDC and IDC costs coupled with the high transaction cost and stamp duty can go as high as Rs 350-400 per sq ft which is transferred on to the end-user by the developer,” the report stated.

However, there have been a lucky few like the Patel Realty India’s project in Bangalore which sold 800 units out of its 1,000 affordable apartments in its Bangalore projects within 50 days of its launch. Similarly, Puravankara claims to have sold 700 of its 1,120 apartment in the first phase in Bangalore. In Chennai, it claims to have sold out 900 of the total 1,000 apartments. However, industry sources said the firm has so far sold out only 300 units and is struggling to sell the remaining apartments in the market.

HIGH HOPES

Bangalore-based Golden Gate, which planned 2,500 affordable apartments under the Commune brand, has called off its project

Omaxe had announced it would roll out 10 lakh units across the country. But only two projects in Faridabad have taken off

Ozone has managed to sell just 30% of its apartments (in the range of Rs 29-30 lakh) since its launch in January 2009

Cities see boom in sales of luxurious housing

Cities see boom in sales of luxurious housing
Business Standard, January 14, 2010, Page 4

Raghavendra Kamath / Mumbai

DLF sold apartments worth Rs 1,000 crore in December

The country’s largest real estate developer, DLF, sold apartments worth Rs 1,000 crore in December. This is the highest monthly sale the company has recorded in its history.

There are many developers like DLF who have seen a surge in the sale of apartments across the country in the quarter ended December, especially in the luxury and semi-luxury category.

A large chunk of DLF’s sales are also from the luxury and semi-luxury segments. It sold 76 apartments of Rs 5 crore each in The Magnolias, Gurgaon, netting nearly Rs 400 crore. The project has apartments of 5,825 sq ft each and duplexes and penthouses of 9,000 to 10,000 sq ft each.

It made another Rs 200-300 crore each in its relaunched projects, DLF Belaire and Park Place, in Gurgaon. Belaire had a price of Rs 2-3 crore each and Park Place of Rs 1.25-1.5 crore.

Indiabulls Real Estate has sold 100 apartments in its 65-storey ‘Indiabulls Sky’ in the Lower Parel area of Mumbai in the past four months. It has also recently launched Indiabulls Sky Suites with full-age advertisements, promising ‘A head in the clouds experience’’. While, apartments in Sky were priced at Rs 6.75-22.5 crore, depending on the size, Sky Suites are expected to be higher.

Indiabulls is also working on a super-luxury, ‘By invitation only’, Indiabulls Sky Forest, where homes are more than 10,000 sq ft each and priced 10-20 per cent higher than Sky projects.

Buoyed by response for its premium housing projects, Orbit Corporation, another Mumbai-based developer, says it will launch one luxury project in the city every quarter. Orbit has sold off its first lot of 18 flats in Orbit Terraces — a premium housing project in the Lower Parel area where apartments ranged from Rs 3.3 crore to Rs 6.6 crore — within 17 days of its launch in September. It sold another dozen flats in the same building later.

Orbit earlier sold its Orbit Arya project in South Mumbai, where apartments were priced at Rs 10-15 crore, within a month.

The increasing sales are a result of many factors, besides general economic recovery. “A host of reasons have helped property sales. Interest rates are down, property prices are down 30 per cent from the peak and markets are doing well. All these are giving confidence to buyers to buy premium homes,” says Rajeev Talwar, executive director, DLF.

Agrees Raminder Grover, chief executive of Homebay Residential, part of Jones Lang LaSalle Meghraj: “Post slowdown, this segment has clearly picked up and we must have marketed and sold 60-70 of homes of Rs 5 crore and above.”

Developers are cashing on this demand by offering even more expensive and exclusive apartments. For instance, Pune-based Kumar Builders is planning to build ‘sky villas’ in the Worli area of Mumbai, where the first villa will start from the twelfth floor. Called Kumar Couture, it will overlook the Bandra-Worli Sea Link and will be priced at Rs 30 crore each, for about 8,000 sq ft.

Beyond Delhi and Mumbai

In Hyderabad, Dax Properties Pvt Ltd (part of Countryside Realtors Pvt Ltd) has sold 65 to 70 villas in its Golf Retreat Project since the launch last month. Costing Rs 1.2-2.5 crore each, they vary from 500 sq yards to 2,000 sq yards.

“There are takers from all over the country,’’ says Hassan, managing director of Dax. Another developer, Aditya Housing and Infrastructure Development Corporation, has sold 20 villas out of 30 at Empress Park in the Jubilee Hills area of Hyderabad. Each villa costs Rs 3.5 crore.

A few days earlier, Aditya Housing announced Mount Castle at Nandagiri Hills in the city, where each floor was occupied by a single flat. Of the 24 it plans to develop, it has already sold five.

In Pune, Kumar Builders sold 77 flats within a short span of time in its premium project, 45 Nirvana Hills, where apartments are priced above Rs 1 crore. The company plans to launch two or three luxury housing projects — flats, bungalows and row houses — in prime localities like Kalyani Nagar and Hadapsar.

Bangalore is also likely to see more luxury projects in the category of Rs 4 crore-plus by developers such as Prestige and Nitesh Estates, as developers have seen good response for the premium products in the past three months.

(With additional reporting by B Krishna Mohan & Pravda Godbole)

Unitech to redevelop Mumbai slums

Unitech to redevelop Mumbai slums
Business Standard, January 14, 2010, Page 4

Bloomberg

Unitech Ltd, India’s second-biggest developer, expects its share of sales from redeveloping Mumbai slums into luxury apartments to triple in three years and boost profit, Managing Director Sanjay Chandra said.

Unitech, based in New Delhi, is developing 100 acres (40 hectares) of land in north Mumbai’s Santacruz area, near the city’s airport, by knocking down shacks typically built with tin, asbestos and plastic sheets, and building apartments in towers serviced by high-speed elevators. Slum dwellers will be resettled in smaller apartments in separate buildings on part of the cleared land.

The world’s second-fastest pace of economic growth is boosting incomes for India’s urban population and spurring demand for houses that cost at least Rs 2.5 million ($54,600) in a Mumbai suburb. About 8 million people live in slums in India’s financial capital and surrounding areas, more than the population of Switzerland.

“Mumbai is a lucrative market and prices tend to go up firmly and demand is usually strong,” said Jigar Shah, head of research at Kim Eng Securities India Pvt in Mumbai. The measures to develop slum areas and build affordable homes “will help lift return on equity and profit.”
Mumbai properties may account for 40 per cent of revenue in three years, up from the current 12 per cent, Chandra said in an interview in Mumbai. The government’s plan to redevelop shanty towns such as the 535-acre Dharavi slum near the new Bandra-Kurla business district has been delayed because of political indecision and disagreements, said Jockin Arputham, founder and president of the National Slum Dwellers Federation.

Latin American model

“It’s not easy to do redevelopment as moving people is a complex task,” said Anshuman Magazine, New Delhi-based managing director of CB Richard Ellis for South Asia. “Not everyone may want to be relocated for economic reasons, not to mention legal and other regulatory issues, and the state of the real estate market.”

Shares of Unitech fell 2.2 per cent to Rs 88.5 in Mumbai trading yesterday.

Nod for 6 high-level NHAI posts to expedite projects

Nod for 6 high-level NHAI posts to expedite projects
Financial Express, January 14, 2010, Page 11

Praveen Kumar Singh, New Delhi

The government has decided to create six high-level posts in National Highways Authority of India (NHAI) to resolve issues on land acquisition and financial contribution from states and expedite highway projects in the country.

The decision is intended to benefit road transport and highways minister Kamal Nath’s plans to award mega highway projects of 400-600 km each and build 20-km roads per day. Nath's ministry has lined up 10 mega highway projects, five of which are to be awarded by the end of 2010-11.

At present, most of the officials in NHAI are on deputation and the ministry wants creation of six posts of executive director at the joint-secretary level within the next six months to spearhead the slow highway projects. Each executive director will be assigned a bunch of states and will be responsible for all matters related to them.

‘‘There are many projects that are languishing due to disagreement between states on the issues of land acquisition and financial contribution. One of such projects is the creation of western expressway passing through Haryana and Delhi. The executive directors will ensure that such issues are resolved at the earliest and the projects get a headstart,’’ a senior official in the ministry said.

‘‘At present, devolution of powers in NHAI is the issue. It is expected that the department of personnel and training will appoint six executive directors in the next 3-6 months. They will be at the level of joint secretaries to the central government with clearly defined powers and duties. Some chief general managers will also be appointed,’’ the official added.

NHAI oversees work on creation of roads and highways under different phases of National Highway Development Programme. In 2009-10, the authority was expected to award contracts for 12,000-km roads and highways, but it could manage to allot projects for 2,100 km only till November . In 2010-11, it has to give out projects for 15,000-km roads.

UP farmers want land sold to Reliance’s Dadri project back

UP farmers want land sold to Reliance’s Dadri project back
Financial Express, January 14, 2010, Page 12

Press Trust of India, Ghaziabad

Over 500 farmers on Wednesday approached the district authorities seeking return of land sold to Anil Ambani-controlled Reliance Power, but expressed inability to repay the compensation at one-go, a government official said.

The farmers’ claim follows the high court order that quashed a portion of the UP government’s 2004 notification for purchase of land for Reliance Power’s Dadri power plant. “As many as 566 farmers have applied today... we are yet to calculate the quantum of land claimed by them, but it could be around 600-700 acres... the process will continue till January 18,” additional district magistrate (finance) Sarvajeet Ram said.

The farmers wanted to repay the compensation amount in installments, saying they had spent the money, Ram said, but added there was no specific direction in the December four Allahabad High Court order about installments and a view would have to be taken by the administration. Reliance Power has since filed a special leave petition in the Supreme Court, appealing against the high court order.

A Reliance Power spokesperson said the matter is before Supreme Court and is sub-judice and declined to comment.

The Anil Ambani group company had acquired 2,200 acre of land for the Rs 10,000 crore project. Appearing for the farmers, advocate Ashish Pratap Singh claimed that he filed the objections on behalf of 1,500 farmers before additional district magistrate Sarvajeet Ram and requested him for time for return of the compensation amount. As per the court decision, the administration had invited objections vide an advertisement on December 19, last year and have followed up all other necessary formalities, Ram said.

Farmers began an agitation seeking compensation for the land on par with amount offered by the state government for land in Noida.

The high court partially quashed the land acquisition on the grounds that the government side-stepped a formality of inviting objections from land owners. Although Reliance Power acquired the land, it had not started work on the 7,450 mw power project citing lack of gas — for which it had an agreement with Mukesh Ambani-led RIL.

Malaysia woos India to invest in realty sector

Malaysia woos India to invest in realty sector
Financial Express, January 14, 2010, Page 12

fe Bureaus, Chennai

In order to attract more foreign direct investments (FDI) into its real estate sector, Malaysia is making all efforts to garner major investments from countries like Singapore, UK, Korea and India. The Malaysian government’s Foreign Investment Committee (FIC) has recently announced a comprehensive deregulation of investment guidelines to facilitate smooth inflow of investments into the country. As part of its India investments initiative, the Malaysian government, for the first time, is holding property expo in Chennai from January 22-24. The expo will be inaugurated by Malaysian Prime Minister Mohd Najib Tun Razak, said Kumar Tharmalingam, member, board of governors, Malaysia Property Incorporated (MPI).

“The most important aspect in purchasing Malaysian real estate is the land law system that allows for transparency and enforceability of ownership. Foreigners also have no impediment to buying freehold Malaysian real estate and to sell when the need arises without restriction,” Tharmalingam said.

In 2008, Indian investors were the fourth largest in residential property investments in Malaysia after Singapore, UK and Korea. The locations of choice were Kuala Lumpur, Penang and Johor with a price range of $150,000-$300,000.

Tharmalingam further said the seminars will also be conducted over the 3 days at the expo. Speakers will include the Malaysian Investment and Development Authority, ministry of tourism and Malaysia Property Incorporated on investing in the country’s real estate.

The expo is organised in conjunction with the Confederation of Indian Industry’s Partnership Summit 2010. It will be showcasing some of Malaysia’s award winning developers and their latest projects. Participating firms include IJM Berhad, Glomac Berhad, IOI Properties Berhad, Metro Kajang Holdings Berhad, the Eastern Corridor Economic Regional Development, the ministry of tourism, Matrix Concept Holdings Berhad and Zerin Properties.

Construction sector must adopt risk management strategies for growth

Construction sector must adopt risk management strategies for growth
Financial Express, January 14, 2010, Page 12

R Ravichandran, Chennai

The construction industry in India is estimated to be around $55 billion and accounts for more than 8% of the GDP. It is also the largest employer after agriculture as it provides employment to more than 3% of the country’s population. The industry has been on a high-growth trajectory, growing at more than 12% per annum in the last four years, i.e. almost 1.5 times the country’s overall growth.

Despite the high growth potential, the industry is subjected to more risk and uncertainty than many other industries. The process of taking a project from conception to completion is complex and entails time-consuming design and production processes. It requires a multitude of people with different skills and competing interests and the co-ordination of a wide range of disparate, yet interrelated activities. Such complexity is further compounded by many uncontrollable external factors.

Unfortunately, in a highly competitive and complex climate that is fraught with risk, unfavorable outcomes can often plague these projects and their participants. Many of the risks emerge over time. Projects that appeared progressing at one time suddenly becomes unmanageable. Risks combine and interact to create turbulence. Many risks are linked to the life cycle of the project. That’s why effective identification and analysis of risk sources is extremely important.

The extent to which these construction risks can be successfully identified and managed largely determines whether a project meets its schedule, budget and quality assurance targets. To succeed, organisations must commit to addressing risk management throughout the project lifecycle.

Projects that face technical risks reflect their engineering difficulties and novelty. Some of these risks are inherent in the designs or technologies employed. Incomplete designs are a widely recognised problem on construction sites.

Resource risks refer to the timely availability of resources — particularly raw material, construction equipment, spare parts, fuel and labour. It also includes the risk that the raw material prices might move adversely. Rising material costs affect profitability and competitiveness, particularly in cases of lump-sum turnkey contracts without any price-escalation clause.

In recent years, India’s liberalised regime has created opportunities and also increased competition in the construction business, which has seen significant interest of foreign players. The competitive environment varies depending upon size, nature & complexity of the project as well as the geographical region where it is to be executed. New competitors entering the market and the current competitors pricing more aggressively intensifies the highly competitive condition that already exists.

A construction company relies on innumerable third parties for timely supply of specified raw materials, components, equipment and services. Some events could result in the complete or partial failure of supplies or in supplies not being delivered on time. Supply disruptions may also be the result of excessive dependence on a single supplier, strikes, lockouts, natural calamities, supplier insolvency or unexpected logistics challenges.

Recovery eases concern over restructured loans

Recovery eases concern over restructured loans
Financial Express, January 14, 2010, Page 13

fe Bureaus, Mumbai

The asset quality concerns, stemming from the surge in restructured loans of Indian banks in 2008 and 2009, have eased as economic activity continues to improve, according to Fitch Ratings.

Of the Rs 1.2-lakh-crore non-performing loans (NPLs), restructured loan portfolio is estimated at 15-25%, which could lead to a moderate one percentage point increase in the gross NPL ratio of the Indian banking system, up from 2.4% registered at the end of September 2009.

Fitch estimates that these NPLs will peak in the next fiscal ending March 2011, by when close to 75% of restructured loans are expected to mature, and the resulting increased credit cost could impact return on assets (ROA) on an average by a modest 13bps.

Four industries—textile, infrastructure, commercial real estate and steel—account for nearly half of the total restructured loans. Since the larger private banks have relatively lower exposure to these industries, the extent of restructuring among private banks (2% of loans) is markedly less than that of government banks (5%).

The increase in loan loss provisions on the new NPLs will impact banks, not only because of the low level of existing provisions on the restructured loans (2%) but also due to the new regulatory requirement on Indian banks to maintain a minimum specific loan loss reserve of 70% of gross NPLs.

Fitch has therefore applied the enhanced 70% specific loan loss provisions on all incremental NPLs to calculate the impact on bank profitability.

The reduction in FY11 ROA varies from one bp to 34 bps (FY09 ROA: 1.02%) depending on the respective bank's extent of restructured loans.

The corresponding effect on tier 1 ratio (both from reduction in earnings and increased risk weights on NPLs) varies from one bp to 54 bps, and is not expected to impact the credit profile of the banks given the system's adequate tier 1 ratio of 8.9% at FY09.

In December 2008, the Reserve Bank of India relaxed loan restructuring guidelines to help corporates with long-term viability to weather the economic slowdown and liquidity crunch. During FY09 and Q10, Indian banks on average restructured 4.4% of loans, up from 0.71% in FY08.

Equity funds top performer in 2009, finds Crisil

Equity funds top performer in 2009, finds Crisil
Financial Express, January 14, 2010, Page 13

fe Bureaus, Chennai

Equity funds were the strongest performers among all fund categories in 2009, registering a one-year return of over 80%. The performance was driven by sharp uptick in the equity markets with mid-and small-cap investments outperforming the larger ones.

The year also witnessed a near doubling in the assets under management (AUM) of the mutual fund industry. However, December was a dampener when the industry suffered the highest-ever monthly net outflows due to corporate and bank withdrawals.

Crisil Fund~eX (which tracks diversified equity funds) was up by 81% in 2009, reflecting the highest growth among all mutual fund categories. This was higher than S&P CNX Nifty's growth of 76%. The performance of the diversified equity funds was supported by the strong performance of the mid- and small-cap stocks with the respective indices, showing growth in excess of 100% in 2009.

Balanced funds also performed well in 2009 with Crisil Fund~eX (which tracks balanced funds) returning 70% in 2009. Most debt categories gave single digit returns with gilt funds giving negative returns on account of the increasing interest rate scenario, especially in the second half of the year.

On an overall basis, year 2009 was positive for the mutual fund industry on the AUM front, with average AUM almost doubling to Rs 7,96,000 crore in December from the year-ago Rs 4,21,000 crore. Month-end AUM, on the other hand, saw a 60% growth on a year-on-year basis.

According to Krishnan Sitaraman, director of Crisil FundServices, "This growth was primarily due to high liquidity in the system which saw large inflows into liquid and ultra short-term debt schemes. The buoyant equity market, which grew sharply in 2009, gave a similar boost to equity fund AUM. While AUM of debt-oriented funds saw a 55% growth over the year, equity fund AUM saw a much higher 77% growth mainly due to mark to market gains."

The monthly net oulflow in December stood at Rs 1,57,000 crore. Majority of the outflow was from ultra short-debt schemes and liquid funds. Accordingly, average AUM fell 1.6%, or Rs 13,000 crore, to Rs 7,96,000 crore in December.

Month-end AUM witnessed a steeper fall of 19% to Rs 6,70,000 crore. A similar trend was also seen in March and September. Corporates withdrew their investments to meet their advance tax payments while banks pruned mutual fund investments to meet their quarter end balance sheet requirements on capital adequacy. However, equity-oriented funds witnessed a rise in AUM of Rs 5,600 crore on mark to market gains.

Sunil Mantri Group launches project in Bangalore

Sunil Mantri Group launches project in Bangalore
Business Line, January 14, 2010, Page 3

500 units in Rs 35-70 lakh range to be developed.

Our Bureau, Bangalore

With IT sector showing signs of revival, real estate developer Sunil Mantri Group launched a project in Bangalore mainly targeting the IT employee.

The location was chosen because of its proximity to the IT corridor, “we have been marketing our project among IT employees,” said Mr Sunil Mantri, Chairman, Sunil Mantri Group.

“The response from our target group has been very good, due to the pent-up demand which is a clear sign of revival,” he added.

The project, which would develop 500 units in the Rs 35 lakh to Rs 70 lakh price range, would be located on Sarjapur Road. In fact, Bangalore has come back on the radar of this company as it has plans to invest Rs 500 crore in this city.

Another project, Mantri Megapolis, would also be located on Sarjapur Road, which would see development of about 2,000 units in the mid-market segment. The company plans to launch another project in Bangalore at Kanakpura Road, Mantri Aquanox, which would develop 300 units.

The company would fund about 50 per cent of these projects through internal accruals, while the rest would be raised from private equity through SPV-level dilution.

Sunil Mantri Group also wants to increase its land bank in Bangalore by about 200 acres.

“We are aggressively looking at land acquisitions of about 200 acres, and are negotiating with a few developers in the city,” said Mr Mantri, adding that the company would focus on joint development on these land parcels.

Hospitality is another segment that the company wants to enter into, with plans to create 1,000 rooms by 2013.

“About 25 per cent of this would be in Mumbai, while the rest would be across India,” he said. “About 80 per cent of these would be in the three-star category, under the brand Mantree,” added Mr Mantri.