Gurgaon: Sushant Lok – Now and Then

Delhi NCR

Sushant Lok, a township built by Ansal API almost 20 years ago, has come a long way since then. Being one of the first townships in Gurgaon, it became a sought after residential location the moment it started selling off. Today, the township is nearly 90-95 per cent occupied and there is still scope to accommodate a few more families, clearly indicating its massive expanse.

Over the years, Sushant Lok has not only grown in terms of its occupancy rate or the number of residential developments but the township has also undergone an exponential price appreciation. According to the data with MagicBricks.com, capital values in Sushant Lok have appreciated by almost 234 per cent since 2006. Manoj Khatri of KN Realty Ventures says, “Capital values in Sushant Lok have been through various phases. A major hike happened during 2005 and 2007 when the metro was announced. This was when the retail market was also growing in Gurgaon and the investors started turning out in large numbers.”

“2008 to 2009 saw the market going down due to the global recession, however, it picked up by 2010 when the investors started coming back, giving another thrust to the market,” adds Khatri.

The capital values in Sushant Lok have risen from Rs 20,000 per sq yd in 1993 to almost Rs 1.5 crore per sq yd in 2013. Khatri says, “Initially, the township sold plots where the buyers started building their independent houses. The concept of builder floors came in about a decade later. Today, a builder floor costs anywhere between Rs 1.5 and Rs 4 crore. An independent house that must have cost just Rs 80 lakh -1 crore then, is now valued between Rs 4 and Rs 13 crore.”

Deepak Kumar of DNV Properties says, “Sushant Lok is a specimen of world class construction. Investors who realised its potential in time have benefitted to a large extent. Being located at a distance of just 15 km from IGI Airport, it is one of the finest locations in Gurgaon. It provides a host of facilities for luxurious lifestyle. The establishment of various shopping malls, connectivity by metro and its proximity to South Delhi attracted many people to settle here.”

Shradha Goyal, MagicBricks.com Bureau

sourcE:- http://content.magicbricks.com/gurgaon-sushant-lok-now-and-then/

1BHK units sell most in Jogeshwari East, Mumbai

Mumbai

Situated in proximity to upscale residential localities such as Andheri, Lokhandwala and Goregaon, Jogeshwari East has carved a niche for itself as a preferred residential destination due to comparatively lower capital values. The locality has attracted a huge demand for 1BHK units in particular.

As per data with MagicBricks.com, demand for 1BHK units was recorded to be more than 60 per cent during the Apr-Jun 2013 quarter in Jogeshwari East. However, supply was startlingly low at 30 per cent.

Sayed Imran Quadri, Assistant General Manager, SMGK Pvt Ltd, says, “In Jogeshwari East there is a huge demand for 1BHK units. With slum rehabilitation picking up pace in here, 1BHK units are being constructed for the slum dwellers. However, they do not prefer to stay in these homes and re-sell them. People working in the neighbouring areas such as Lokhandwala and Andheri prefer small apartments accommodation buy from slum dwellers as they offer to sell at lower rates.”

Increasing capital values and enhanced connectivity via the Jogeshwari Vikhroli Link Road (JVLR), which connects Jogeshwari East to both Western and Eastern Expressways, the locality has caught the fancy of many a realtors and investors. “The locality has witnessed a healthy appreciation of roughly 20-25 per cent in the last one year. This has attracted investors,” says Sam Patel of Central Links India, a city-based real estate firm.

“Investors generally prefer 1BHK units, as they are easy on their pockets, have maximum demand and are easier to sell off,” adds Patel. These factors have together resulted in an increased demand for 1BHKs.

In spite of the high demand for smaller units, supply in Jogeshwari East is largely limited to 2 and 3BHK units. “It is easier for developers to construct and sell larger units as compared to 1BHKs. More number of smaller units mean more units to maintain and larger consumer base to deal with,” exclaims Quadri.

If market experts are to be believed, demand for smaller units would continue to pour in from both investors as well as end users. Developers are gradually waking up to this demand and have started offering 1BHK units in their projects. It needs to be seen how long it would take to diminish the gap between demand and supply of 1BHK units in Jogeshwari East.

source:- http://content.magicbricks.com/1bhk-units-sell-most-in-jogeshwari-east-mumbai/

Will property prices in Hyderabad remain affordable?

Amidst the long period of political uncertainty over Telangana issue, it was the presence of IT/ITeS industry that kept the real estate market of Hyderabad alive. Now that the issue is over and Hyderabad has been declared to be the common capital of both Andhra Pradesh and Telangana, the real estate sector in the city is expecting a major transformation – not in the short term though.

Property prices in Hyderabad are far less, compared to other metros such as Delhi, Mumbai and Bangalore. As per MagicBricks.com research, the average capital values of residential properties in localities such as Miyapur and Kondapur range in between Rs 2,500-Rs 4,000 per sq ft. Thus, you can expect a good 1,000-sq ft apartment in Rs 25-40 lakh. It is not that these localities are lagging behind or are situated far away from the city centre. They are among the top residential locations in Hyderabad, and enjoy decent physical and social infrastructure.

“In Hyderabad, property prices have moved very slowly as compared to other metros in the country. The buyer sentiment remained low and investors stayed away from the market due to political uncertainty,” says Afaque Ahmed, a city-based realtor.

Perhaps the lack of interest from the investor segment proved to be a blessing in disguise for the end-users. Properties are still affordable and price levels are moving realistically. In fact, as per MagicBricks.com research, the top localities such as Begumpet and Madhapur witnessed a drop of as much as seven per cent in capital values of residential properties, in the Jan-Mar 2013 quarter.

“Presence of active investors is good for real estate developers, but people who wish to buy a home for themselves have to bear the brunt of it. That’s what has happened in other metros where property prices keep rising for no major reason,” says Rajeev Kalra, a property dealer.
Meanwhile, now that the Telangana issues has been sorted out and the city will also be receiving Metro Rail, it will be interesting to observe whether Hyderabad remains an affordable, end-user driven market or becomes an investors’ heaven.

source:- http://content.magicbricks.com/will-property-prices-in-hyderabad-remain-affordable/

Ebay brings out a New Search Site Tool

Ebay is going great guns as the online marketplace is bringing about one update after the other. It has come up with a new search engine which is exclusive for all the North American users called the Cassini. It is definitely a great helping hand for the online sellers who can expect and get more visibility of the wide arch of products that they showcase as part of the listing to nab the attention of the customers. The e-shoppers also get a broader view of the marketplace and get to find out the variety of offerings of the web merchants.
Ebay kept it a Low Profile Affair for Two Years 

Ebay was hatching the master plan for almost 2 years. Cassini has been thought upon for two years so that the e-sellers are able to take advantage of this new site search engine to the best possible extent. Cassini has been churned out to aid in effective product data management and it is expected to offer the best solutions that would enable the sellers to higher their online revenue graph. Improved product recommendations and indexing is possible when you have a sorted out listing organized in a catalog format. It would group the products in a category format to have higher visibility. 

source:- http://blog.channelsale.com/2013/08/ebay-brings-out-a-new-search-site-tool.html

Infosys upgrades wealth management tool

Infosys, a global leader in consulting, technology and outsourcing solutions, today announced the launch of the latest version of its Finacle wealth management solution.

The new offering from Finacle allows banks to quickly introduce new products and services, such as financial planning and investment products, along with traditional retail banking services. This will help banks strengthen their offering portfolio for High Net Worth Individuals (HNWIs) and mass affluent customers.

A recent Ovum study showed that HNWIs and mass affluent customers are among the fastest growing segments for banks. The study estimates that the HNWI banking and financial planning segment will grow by 7.5 per cent between 2011 and 2016. The mass affluent financial planning segment is slated to grow by seven per cent in the same period.*

The latest version of Finacle wealth management solution offers:

• Single platform for all wealth management customers -The solution uses a flexible architecture to give banks the ability to customize and release products quickly to address the changing needs of their retail and investment banking customers

• Financial planning and portfolio management- Sophisticated tools for risk profiling, goal planning and portfolio analysis empower advisors to provide the high levels of personalized service that today's HNWIs and mass affluent customers demand

• Additional asset classes- Fixed Income, Derivatives, IPOs and Alternate Investment modules have been integrated onto a single platform and enables banks to offer a wider selection of multi-currency and multi-asset class products

• New fee module- A new advisory and management fee module allows advisors to accrue and view management fees for a customer, or across multiple customers

• Advisor dashboard -A detailed dashboard provides an insightful, 360-degree view of each customer's net worth, assets and liabilities. This helps banks offer personalized products and services to HNWIs and mass affluent customers and increase wallet share within this segment

Haragopal M, Global Head - Finacle, Infosysnfosys: "Banks can no longer iggnore the growth potential that highly profitable segments like HNWIs and mass affluent customers offer, nor can they meet the needs of this segment without delivering a unique, customized experience. The enhanced Finacle wealth management solution will enable banks to offer a personalized advisory service, providing the differentiation necessary to compete in this lucrative market."

Mr. Jaroslaw Knapik, Senior Financial Services Technology Analyst at Ovum: "We predict that IT spending by the global wealth management industry will reach almost $35bn by 2016, powered by heavy investment in digital channels. The HNWI banking and financial planning segment will see the largest growth. The focus will be on providing the client advisor with the tools to improve client communication and loyalty. For the client, the emphasis is one of empowerment; banks will be investing in self-management tools such as personal finance management, portfolio management and goal planning to provide their HNWIs with greater control over their investments and financial planning." 

source:- http://www.finextra.com/News/Announcement.aspx?pressreleaseid=51075&topic=wholesale

Marico's Unique Paras Strategy

W

hen Marico decided to try on a new hat, it also committed itself to a different, more vibrant, personality. Juggling personas was never going to be easy but here’s proof that the company known for its steadiness, manifested in brands like Saffola and Parachute, is ready to step away from its long-standing staid avatar.

 Consider this advertisement. Its narrative goes like this: Two young television jockeys are shown complaining about the quality of participants at a talent hunt. “Pata nahi kahaan se aa jaate hain. Unko maloom nahi, yeh talent hunt hai, unki gaon ki nautanki nahi [Don’t know where they land up from. They don’t know, this is a talent hunt, not a village nautanki],” says one dismissively. On cue, the maligned participant pulls out a can of Zatak deodorant; the cap flies across the room and lodges itself in the jockey’s mouth rendering him unable to speak while the participant sprays himself. ‘Who’s the cool one now?’ the advertisement seems to ask. The jockeys are humbled and the underdog prevails.

The tone of this campaign is in-your-face, suggesting a departure from Marico’s traditional approach—remember the Parachute hair oil commercials? Significantly, this is a sign of the leap of faith Marico is taking as it digests the acquisition of Paras Pharmaceuticals’ personal care brands. It completed the Rs 760-crore purchase from Reckitt Benckiser (the UK consumer goods giant had earlier acquired those brands from Paras) last July and has been on a learning curve since then.

Winds of change
Prompted by the sluggishness in its core businesses of hair oil and cooking oil, Marico had, a few years ago, taken a strategic call to tap new categories. “We wanted to enter categories that create tailwinds,” says Saugata Gupta, CEO, Marico. He means businesses that are poised to grow faster given that they cater to the 250 million Indians under the age of 35.

Subsequently, in 2010, it launched breakfast cereals under the Saffola brand and has since garnered an impressed 14 percent share in the category behind market leader Quaker Oats.

Personal care presented an opportunity with significantly better growth rates. In late 2011, when Reckitt Benckiser—which had bought the Set Wet hair gel, Zatak deodorant and Livon hair serum brands from Paras—put them up for sale, Marico was quick to enter the competitive bidding process. “Simply put, if we could not acquire this business, we would have had to build it,” says Sameer Sathpathy, chief marketing officer.

Marico has already notched impressive gains in these categories. Its success mantra: Learning to do business in a new way for an audience that is more aspirational, even fickle.

Why personal care?
In 1962, when Harsh Mariwala joined the family business at Bombay Oil Industries, he had no clue that there would come a time when he would have to look outside its staple hair oil business for growth. Still, in the early 2000s, the company found itself in that position and ventured into the cooking oil business with Saffola, a brand built on the promise of lower cholesterol. Sales soared as health-consciousness rose in urban India. Between 2000 and 2010, the company’s market capitalisation increased more than 10-fold, from Rs 800 crore to Rs 13,000 crore.

But by the end of the decade, Marico found itself in the search for more options in areas that could be considered ‘businesses of the future’—that is, those that take advantage of India’s young demographic. Breakfast cereals, as mentioned earlier, presented one such opportunity, while personal care emerged as another. “We needed a portfolio that was in line with future trends and left a lot of headroom for growth,” said Mariwala.

Personal care brands had been benefitting from the surge in personal grooming in India. They boasted growth rates of 20-25 percent, far higher than the seven percent seen in Marico’s core categories. This was identified as an attractive category.

The choice was build versus buy. Setting up the business from scratch would have taken three to five years and come at significant cost. A national advertising campaign would set the company back by Rs 25-30 crore. Add to that, the cost of strengthening distribution. Contrast this to an easier, stable entry that the Paras brands would provide. It was a no-brainer.

But the acquisition had its own set of challenges. Reckitt Benckiser had stopped investing in the brands, given its disinterest in retaining them. Consequently, they had lost market share as well as recall. While Marico’s primary task was to fuel growth, the other big job was integrating a smaller but more strategic business into the company. Integration issues have been known to adversely affect brands. It knew it would have to tread carefully.

Keeping it Separate
To begin with, Marico could not allow Paras’ brands to be subsumed by the larger company. A well-established consumer goods player, it had corporate systems and processes in place. Further, these were tailored to the hair and cooking oil categories, “boringly stable businesses” as Gupta describes them. The youth-oriented consumer businesses did not have room for stodgy practices. 

The solution: House the new team separately. Much like Axe employees who are seated in an office outside the Unilever headquarters in London, Marico chose to keep the new group in New Delhi away from its head office in Santa Cruz, Mumbai. This physical distance allows the team to function with the same agility as it did when it was under Paras.

The personal care space is characterised by what analysts call non-stop innovation. For instance, it took Marico just six months to change the packaging for Zatak deodorants.

The advertising, too, needed a fresh approach. The older campaigns appealed to the youth in a somewhat sedate manner. The newer ones have a breezier feel, more relatable for an under-35 audience. “This is a business characterised by high advertising spends and this is the only way one can stay ahead of the game,” says Abhneesh Roy, an analyst with Edelweiss.

No easy road
This is largely because this category is beset with competitive intensity. For example, if you had stepped into Big Bazaar at Mumbai’s Phoenix Mills recently, you would have seen a counter stacked with deodorants with discount signs on them. On an average, they were being sold at 25-30 percent less than the sticker price. A fair number of those brands had been imported. Company representatives vied for customer attention as they offered new fragrances for testing.

As such, the personal care category demands constant advertising support across print, radio and television as well as social media marketing. Given the high margins the brands promised to deliver, Marico has decided to spare no expenses and to good effect. The company declined to specify how much it spends on advertising for the three brands. Under Reckitt Benckiser, Zatak and Set Wet had suffered due to a loss in advertising support. Both these brands now have a combined 5 percent market share, a throwback to their status in the Paras days. In the three quarters that Marico has worked with the brands, Zatak, Set Wet and Livon have grown by 26, 25 and 21 percent, respectively.
The growth hasn’t been painless. Distribution, for instance, has proved to be a challenge. With the old business, the company had built its strengths in servicing kiraana stores and modern trade. It now has to deal with cosmetics and chemist outlets as well.

Further, with consumers demanding regular replenishment of specific variants of a brand, the products have to be sold in units as opposed to being sold in boxes like Parachute and Saffola are. This adds to the complexity of managing the supply chain.

Then there is the demanding consumer base that not only wants deodorants and hair gels in different pack sizes, but also needs fragrances to be frequently refreshed. “One of the main challenges is to understand what fragrances are working in the market and then producing them quickly,” says Gupta.

Most importantly, housing a Rs 150-crore business, albeit a fast-growing one, is a costly affair.

Gupta is clear that it will take the company two more years to establish a winning position in the business. For now, he says, they are focussed on ensuring their brands’ visibility in the market.

Investors, meanwhile, have adopted a wait-and-watch attitude.

At Rs 209 a share as of July 12, Marico’s stock has barely moved in the last six months. This, however, can be attributed to growth and margin pressures in its core oils business. Market watchers say this stagnation does not reflect the long-term potential of the company. After all, the stock has gone up nearly 10 times in the last nine years. Further, they say the company’s initial approach in the personal care business shows Marico is on the right path towards building a long-term sustainable presence in this category.

Read more: http://forbesindia.com/article/boardroom/maricos-unique-paras-strategy/35763/2#ixzz2bMM19Zw
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UPFRONT/CHECK-IN | Jul 26, 2013 | 5829 views What Flipkart's Funds Mean for its Rivals by Rohin Dharmakumar     inShare   + Comment now  Email  Print Image: Amit Verma flipkart.com , india’s largest ecommerce retailer, announced on July 10 that it has raised $200 million in its fifth round of venture funding from existing investors Naspers, Accel and Tiger Global. It is by far the largest funding raised by any Indian ecommerce company, adding up to $380 million since Flipkart’s inception in 2007. The Times of India reported it is in talks for another $100 million. With an estimated $80 million unspent from its August 2012 funding of $150 million, Flipkart has $280 million before it needs more cash. This gives it a ‘cash runway’ advantage compared to Jabong, Snapdeal or Myntra. Using recent estimates, the company has three to four years of runway left. Flipkart’s objective will be to thwart Amazon and remain the dominant brand. This will spell bad news for less-capitalised rivals who want to dominate their own spaces—Snapdeal (marketplaces), Myntra and Jabong (apparel). Flipkart is likely to build infrastructure services that can be hired out to competitors. Co-founders Sachin and Binny Bansal have diluted their stakes to reportedly single digits and the company is being driven by investors. It will be interesting to see how Tiger Global and Naspers, the two largest, plan to exit: An IPO or a sale to an international giant?

Read more: http://forbesindia.com/article/checkin/what-flipkarts-funds-mean-for-its-rivals/35683/1?utm=slidebox#ixzz2bMKwJtyA

How Tata Housing Reinvented Itself

Real estate slowdown? Brotin Banerjee hasn’t heard about it, having grown Tata Housing 100 percent every year since 2006. He has transformed a defunct company into a serious player
H

e was considered a rising star in the Tata firmament. Eight years into the elite Tata Administrative Service (TAS) and he had notched up several credits that proved he had what it takes to go the distance.

Brotin Banerjee had a stint with Tata Chemicals. He launched a lower cost variant of Tata Salt and also a new distribution model. Success noted. Next, he got a big up with a promotion to chief operating officer of Barista—at the ripe young age of 29. Banerjee fixed a sagging bottom line at the coffee chain. He’d seen the vibrancy of a young brand and led a passionate team.

It was then that he—and the system—got a shock. In 2006, when everybody would have expected a plum assignment in a major Tata company, he got a dud—an almost defunct company. Among the close to 100 businesses that existed under the pater familias Tata Sons, there was a housing company that few knew much about—or cared about. In fact, things were so bad that Tata Housing Development Company was then known more by its acronym THDC since it could not afford to pay the royalty to carry the Tata name.

THDC was an oddball player in 2006 because the rest of the industry was booming. Developers were fiercely bidding up land prices to build large land banks. DLF, the country’s largest real estate company, got a dream valuation of Rs 20,000 crore when it launched its initial public offering (IPO). The Tatas were then just waking up to the realisation that they were missing something here.

And so Banerjee found himself in a small flat in Emerald Court in Mahim, Mumbai (THDC’s office) as deputy CEO of a company that had a negative net worth of Rs 10 crore, which means its liabilities exceeded its assets by Rs 10 crore.

Cut to the present, and Tata Housing has seen nothing but a dizzying climb. Over the last half decade, it has grown at a compounded annual growth rate (CAGR) of 100 percent and clocked revenues of Rs 1,097 crore in the year ended March 2013. Simply put, the business has doubled every year and the company is currently constructing 70 million square feet of saleable properties across the country. “They’ve managed to get here due to their focus. Unlike other developers they never sacrificed long-term stability for short-term gain,” says Shobhit Aggarwal, managing director, capital markets, at Jones Lang LaSalle, a real estate services firm.

The Initial Days
How did Banerjee do it? Without a land bank, and without any borrowing capacity worth speaking about? People in the industry grudgingly admit today that not many of them had given Tata Housing much of a chance.

Banerjee was also hamstrung by the fact that no one wanted to join the company. “I would have people come in through the door and their first question was—why can’t you use the Tata name?” he says. He knew he needed to do things differently. So he hired people from different sectors (not real estate) who came with new business ideas and attitudes.

The next crucial phase was to get business flowing. Here too it was Banerjee’s contrarian approach that worked. Tata Sons pitched in with Rs 100 crore of equity. But in the go-go years before 2008, that was hardly enough to purchase land. And the company didn’t have a balance sheet to support large borrowings from banks.

That was when Banerjee realised that, to get started, he needed to look outside the traditional housing business model. He and his management team noticed that while there was a bubble building up in the premium and luxury housing categories, the affordable and low-cost housing space was experiencing a huge shortage. The company estimated a shortage of 24.7 million units with most of the shortage falling in the affordable housing space.

Among the first projects the company launched was a low-cost housing development in Boisar, an exurb (commuter town) of Mumbai. Here they constructed over 2,000 units at costs ranging from Rs 5 lakh to Rs 15 lakh. Now, affordable housing is not something developers were looking at in 2007. But when the real estate market cracked in 2008, it proved to be a wise bet.

While working on the project, Banerjee realised that he needed to re-engineer the entire process of how real estate development was thought of. Traditional developers usually sell their inventory in tranches. As real estate prices keep rising, it helps them realise gains. Moreover, developers, and at times buyers, are not too perturbed about project delays as the value of the property keeps rising.

But with low-cost housing, the dynamics completely change. Low-income buyers with stretched budgets need deliveries quickly. Selling inventory in lots doesn’t make sense as demand is usually more than supply, and the cash realised from sales helps in getting working capital. “We monetise how a manufacturing company would,” says Govinder Singh, CFO at Tata Housing.

Unlike the skills needed in the real estate industry, here manufacturing-like skills were needed.

And it was here that Banerjee decided to adopt an approach that is different from the usual cookie-cutter one. It paid off richly. His mantra: Construct quickly, hand over apartments and move on to the next project. It’s hardly a surprise that five years on, low-cost and affordable housing makes up almost Rs 500 crore of Tata Housing’s top line. The company has spun it into a new business unit called Smart Value Homes and it aims to become a leading player in the space. 

The Land Issue
With low-cost housing the company got an important entry point into the business. But Banerjee saw that unless Tata Housing was able to get into other, more lucrative parts of the trade, it would never be seen as a serious player. Here financing of land was a critical issue as these projects cannot be located outside cities. 

What Tata Housing needed was a capital-light model that allowed it to develop projects on prime land but without outright purchase. Aiding it was a 2008 Reserve Bank of India directive that forbade banks from lending for land purchases. That was when Banerjee decided to get into joint development agreements (JDAs) with landowners. It is a model that has found favour in the real estate industry since, but most companies, if they have the capital, still favour purchases over JDAs as they believe the upside is greater.

But the downside is also greater, when there is a slowdown. This saddles land buyers with too much debt. This story has played out at DLF, the country’s largest real estate company by revenues, which has been struggling to sell assets to reduce debt.

Tata Housing has two types of JDAs. One is where the company has a floor and a cap model. In this, the company pays the landowner a fixed cost for the land. The upside is capped at a reasonable level, say 20 percent. The advantage for the developer is that it is able to benefit if prices gallop. Several large landowners across the country now prefer going for deals like this as they still maintain some ownership of the land and get a minimum rate of return.

Another popular approach that Tata Housing takes is to use land parcels by signing a joint venture agreement and becoming a majority partner. From then on it takes care of everything—from conceptualising the project, to design, marketing, construction and delivery. The landowner gets a fixed percentage of the topline.

Branching Out
Over the last three years, Banerjee has moved quickly to de-risk parts of the business. One way of doing this has been to get into different types of housing projects. So, apart from low-cost and affordable housing, the company is also in premium and luxury housing. It recently launched a second homes project in Kasauli, Himachal Pradesh, which has been doing well. And most recently, it ventured into old-age homes in Bangalore.

“What this does is ensure that the company does not suffer too much if a certain segment is impacted by a slowdown,” said an analyst at a foreign brokerage, who declined to be named.

Along the way, the company has had some particularly successful launches. In April, in the Delhi suburb of Gurgaon, it decided to launch a block of flats in Sector 112 at Rs 2,000 more (than the prevailing price) per square feet. While they knew they’d got the location and pricing right, the response surprised even them. On the first day, the number of buyers was 11 times that of the flats available, as people flocked to the Tata brand and the assurance it brought. The company had to hold a lottery to determine whom to assign the flats to. However, it has not had this success with all its projects. There are some projects, like the La Montana project in Pune, which are struggling.

But having tasted success, Tata Housing is not looking back. At a time when there are signs of an extended real estate slowdown, the company plans to step on the gas. Last December, Tata Sons infused Rs 500 crore into Tata Housing. It’s a sign of the faith the management has in the business.

Banerjee admits that from here on it will be difficult for the company to double revenues every year but he aims to take the business to Rs 5,000 crore in the next three to four. Recently, in a first for a real estate company, Tata Housing got a construction loan at base rate. It has also been able to raise short-term commercial paper at 9 percent which is significantly cheaper than what other companies manage to get.

Banerjee clearly has put his stamp on the company. The 39-year-old TAS official is coy when asked whether he is done with Tata Housing, but is obviously up for the challenge if it comes his way.

Read more: http://forbesindia.com/article/big-bet/how-tata-housing-reinvented-itself/35785/2#ixzz2bMJuUP6B

NRI interest in Gurgaon realty up as touches historical low - Times

GURGAON: The fall of Rupee has raised speculations of increased NRI investments in the reality sector. Builders and analysts say that Gurgaon continues to be a popular destination for NRIs buying property mainly for the purpose of investment.

The Indian Rupee (INR) has seen 12.0% depreciation against the US dollar since the start of May till June, thereby forcing its value go down against all other currencies pegged to US dollar, including the UAE Dirham (AED). As a result, the Rupee has also depreciated against the AED by 12.0% during the same period.

Builders maintain that this slip might prove a good opportunity to tap the potential offered by the NRIs.

According to Ravi Saund, COO, CHD Developers Ltd, most developers are taking cue from this situation and coming up with products primarily targeted at the NRI segment. "We, at the CHD, are coming up with high-end studio apartments in our upcoming commercial tower CHD Sky One. This will majorly be targeted at our NRI customers," he said.

Gurgaon has emerged to be one of the most lucrative investment options for NRIs since it ensures a good return on investment. The areas most preferred by the NRI segment are Golf Course Extension, Sohna Road and the upcoming Dwarka Expressway. "If the rupee maintains its current levels, real estate developers could see more NRI investments during the period. On the downside, cost of construction may marginally go up as we will have to pay more in rupee in order to procure raw materials," Saund added.

Said Pankaj Bansal, director of M3M India: "For many NRIs, buying a property in India (either for self-occupation or for parents or siblings) remains a popular investment option. The momentum, however, may get a temporary boost or bust depending upon the Rupee's equation vis-a-vis the American Dollar."

However, Bansal said, like any other price factor, after the initial euphoria settle down as reality sinks in and is accepted. "Over the sustained long term, demand from NRIs settles down at the normal levels eventually," he said.

Explaining the trend, Sanjay Sharma, managing director, QuBREX, said, "The queries from NRIs might have increased but the actual investment in India will depend upon whether they feel the Dollar is headed towards Rs 50 or slips towards Rs 70. If they believe that the Dollar is going to get stronger, then they might prefer to invest in the recovering market of US rather than in the Indian real estate market."

A recent survey conducted by Sumansa Exhibitions, organisers of the successful annual event called the India Property show in UAE, possibly reveals that NRIs place a higher intrinsic value on property owned in India over that of property owned in Dubai or elsewhere.

Comparing the market in UAE and India, Ashutosh Limaye, head, research & REIS, Jones Lang LaSalle India, said real estate transactions in Dubai had increased by 8% to 154 million AED in 2012. Not surprisingly, this recovery is backed by huge investments being made by expatriates, particularly from India.

"It could be argued that expatriate Indians may be favouring Dubai over Indian real estate on the basis of socio-economic and other factors. Indian investors were buying properties in Dubai as it offers relative political stability, world class infrastructure, tax benefits, attractive prices and geographical proximity. Also, Dubai's economy has been recovering since last two years, growing by 4.4% and 3.4% in 2012 and 2011, respectively," said the analyst.

source:- http://articles.timesofindia.indiatimes.com/2013-07-15/gurgaon/40589096_1_m3m-india-sumansa-india-property

Gurgaon residential property investor update

By Santhosh Kumar, CEO - Operations, Jones Lang LaSalle India

Over the last one year, capital values rose by more than 30-35% in Gurgaon�s residential sector. Developers are now going slow on execution of real estate projects, resulting in a drop in supply of residential apartments in most prime markets. Emerging residential areas are still not able to meet the huge housing demand.

Two key reasons for increasing rental and capital values for residential properties are:

- Because of rampant construction delays, the expected supply of residential properties announced in early 2009 has not been able to reach the market. Around 500,000 units that were scheduled for possession in key markets by end of 2011 are delayed by another year

- There has been an increase in lateral hiring by corporates. With job scenario improving all over the country, people have more to spend. This has resulted in good investment opportunities, and investor sentiments in the affordable and mid-income segment of Gurgaon�s residential market have improved.

Hot Locations

Residential property prices on the upcoming southern peripheral road connecting to National Highway 8 have seen considerable appreciation over the past few months. This location holds great investment potential thanks to enhanced connectivity that NH8 provides to Manesar and Dwarka. In particular, residential properties along the Dwarka Expressway have attracted interest from the mid-income buyer group. As prices soar in upcoming locations of Gurgaon such as Golf Course Extension, Sectors 70 and Sector 78, buyers have been looking at these alternate locations.

The Downside

That said, not all residential projects rank equally from an ROI perspective. Whatever appreciation in capital values Gurgaon residential properties have seen does not seem as significant when seen in the light of factors like the higher interest rates on home loans. Nominal capital appreciation of a property may be as high as 25-30%, but the actual ROI after making adjustments for inflation and higher interest rates can be nil. There is a 75% chance of investing in a property that will not give investor any gains - and in some cases it may even result in a loss.

Gurgaon is expected to see a residential property supply explosion. There are 55,000 ready flats on the market today. We expect to have around 6000 ready flats by end of 2012, with an additional 65,000 by the end of 2014. Another 20,000 in 2015 will take the final tally to almost 150,000 by the end of 2015.

Out of the total supply, properties which offer locational advantages in terms of vicinity to airport and Metros connectivity will have better absorption. Strategic location and superior amenities will be the keys to profitable residential property investment in Gurgaon in the foreseeable future.

Long-term fundamentals

Gurgaon remains promising for office space, and there are good prospects for more major global players setting up operations here in near future. On the whole, this augurs well for the residential property market, more or less assuring relatively healthy absorption of residential space in the times to come.  The new infrastructure initiatives being undertaken by the Government will also play a crucial role for Gurgaon�s residential and commercial property sectors.

source:- http://www.moneycontrol.com/news/real-estate/gurgaon-residential-property-investor-update_682406.html

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