Tatas to execute Rs. 70,000 crore infrastructure projects in 5 years

New Delhi: To expand its presence in the infrastructure sector, salt-to-software conglomerate Tata Group is looking to execute projects worth Rs. 70,000 crore by 2017 through three of its unlisted firms.

Tata Projects, Tata Housing Development Company (THDC) and Tata Realty and Infrastructure (TRIL) would execute projects of about Rs. 70,000 crore, a Tata group official said.

The official added that Tata Group is aiming at encashing opportunities in various segments of infrastructure space like roads and highways, EPC, real estate and railways as half of 12th Five-Year Plan's envisaged $1 trillion investment is expected to come from private sector.

As per the plan, Tata Projects and THDC are looking to execute orders over Rs. 48,000 crore, while TRIL is looking at investing Rs. 22,700 crore in five years for developing projects in various segments of infrastructure.

This is the first time that $100 billion Tata Group has unveiled its future growth agenda after Cyrus Mistry took the baton from legendary Ratan Tata.

"Investment into infrastructure will create commensurate opportunity for players in construction sector. For example, the construction opportunity in power and roads & bridges sectors could be close to Rs. 5 lakh crore and Rs. 3 lakh crore respectively during 12th Five Year Plan at 2006-07 prices," said Siddhartha Roy, economic advisor of the Tata group in a presentation.

Citing the example of the roads and highways sector, he said that there is "large opportunity for Tata Group companies to participate in this sector in which investments are expected to grow at 16 per cent per annum".

According to a presentation made by Sanjay Ubale, managing director and CEO of TRIL, his firm is looking to execute projects worth Rs. 22,700 crore by 2017.

This includes new roads and highways projects worth Rs. 7,500 crore and expanding company's presence in various other sectors including airports, urban transportation, special economic zones (SEZs) and real estate.

The company this year constructed 110 km long Pune-Solapur four lane national highway project and also acquired three road projects from IVRCL this year. It also has plans to bid for Navi Mumbai and Jamshedpur airport projects.

Similarly, Tata Projects, which is present in engineering, procurement and construction (EPC) space and executes large and complex industrial infrastructure projects, is looking to execute projects worth Rs. 25,000 crore by 2017.

The company, which has an order book of over Rs. 15,000 crore, is already executing some large projects like 4506 cubic metre blast furnace at NMDC's upcoming 3 million tonnes (MT) steel plant in Chhattisgarh's Nagarnar and a blast furnace for SAIL's Rourkela steel plant.

In January, the company had won Rs. 3,300 crore project for construction and laying of 343-lm long double track rail tracks for a part of Eastern dedicated freight corridor (EDFC) between Khurja and Kanpur in a consortium with Spain's Aldesa Group.

The company is also bidding for city metro projects, power plants and transmission lines.

Tata Housing, the third firm of the Tata Group eyeing its pie in the infrastructure space, has 26 residential projects in 11 cities, including 8 major locations. The company is present in all segments of housing from affordable housing to luxury segments where units are priced at Rs. 3 crore and above.

It is currently developing a total of 55 million square feet of space, while 19 million sq ft are in pipeline, said Brotin Banerjee, managing director and CEO of the company in a presentation.

The company has also ventured into foreign markets such as Maldives and Sri Lanka and is exploring avenues in other South Asian countries.

source:- http://profit.ndtv.com/news/corporates/article-tatas-to-execute-rs-70-000-crore-infrastructure-projects-in-5-years-323882

May infrastructure growth slows to 2.3 per cent

New Delhi: India's infrastructure sector output growth marginally slowed to 2.3 per cent year-on-year in May from 2.4 per cent the previous month, government data showed on Monday, reflecting continued slowdown in the economy.

April's number was revised up from a provisional 2.3 per cent reported earlier.

The infrastructure sector - coal, crude oil, oil refinery, natural gas, steel, cement, electricity and fertilisers - accounts for 37.9 per cent of the industrial output, which expanded just 1 per cent during the last fiscal year.

In the fiscal year that ended in March, infrastructure grew 3.2 per cent compared with 5 per cent in the previous year.


surce:- http://profit.ndtv.com/news/industries/article-may-infrastructure-growth-slows-to-2-3-per-cent-323942

Real Estate Bill seeks to protect middle class interests: Ajay Maken

The Real Estate (Regulation and Development) Bill, which was cleared by the Cabinet on Tuesday, seeks to protect middle class interests, Minister for Housing & Urban Poverty Alleviation Ajay Maken said on Wednesday.

The Bill, which seeks to protect those buying homes from being conned by real estate developers, will be introduced in the next session of Parliament, Mr Maken added. Parliament is likely to meet for its Monsoon Session in July.

The Real Estate Bill aims to create a real estate regulator to protect home buyers from unscrupulous property developers. It has provisions for tough penalty for putting out misleading/deceptive advertisements about projects. The proposed legislation also makes it necessary for builders to get all important clearances before they sell apartments.

Mr Maken told NDTV that 22 states, including key states of Gujarat and Madhya Pradesh, governed by the BJP, have supported the Bill. However, some states like Chhattisgarh have opposed the Bill, he added.

Real Estate is a state subject and the cooperation of states is necessary to push the key legislation, Pranay Vakil of Knight Frank told NDTV.

Highlighting the significant provisions of the Bill, Mr Maken said property developers need to put project money for a specific project.  (Read: What Real Estate Bill means for you in 10 simple points)

"They can't raise money for project A and then use it to buy land for another project, say B," he said.

This will prevent developers from diverting funds meant for construction and ensure timely completion of projects, analysts said.

Mr Maken said the Bill would make it mandatory for real estate agents to register them with the regulator.

source:- http://profit.ndtv.com/news/industries/article-real-estate-bill-seeks-to-protect-middle-class-interests-ajay-maken-323042

Why Gurgaon is a better property destination than Noida

Home sales rose across most major markets in the country between January and March 2013 compared to last quarter of 2012, thanks to new project launches at attractive prices and the discount schemes on offer. Expectations of further rate cuts on home loans and the impending revival of the economy is likely to further fuel demand for new homes.

If you are planning to buy a house around Delhi, Noida and Gurgaon must be high up on your list. The satellite cities are the most sought after destinations when it comes to the National Capital Region.

Gurgaon:

Often called the 'Millennium City', Gurgaon saw demand for new homes slowing for the third consecutive quarter, according to a Bank of America Merrill Lynch report. However, the slowdown in demand had no effect on prices, which rose by an average 4.5 per cent across projects over the three-month period, the report says.

Fewer project launches during the quarter, lower inventory and rising speculation among investors led to a strengthening of prices.

Real estate biggies like DLF and Unitech, which have executed large projects in Gurgaon, launched fewer apartments to focus on execution and inventory clearance. The absorption rate in Gurgaon is slowing but is still the highest in the country among tier I cities indicating robustness in the market, Bank of America adds.

Gurgaon has the lowest unsold inventory of unsold flats in the country, the report says.

According to Bank of America, Gurgaon will continue to show strength on the back of rising number of end-users and investors.

"Prices of ongoing residential projects in Gurgaon continued to move northwards despite weak macro indicators and slowing demand trends," the report states.

Noida:

Noida also witnessed a slowdown in new launches in the first quarter of 2013 but, unlike Gurgaon, demand remained steady.

Noida is the most affordable city among tier I cities, but its absorption rate has remained subdued and unsold inventory continues to rise since year 2010, Bank of America Merrill Lynch says.

Home prices have remained depressed in Noida because of a large number of project launches, poor execution and tepid price appreciation. As a result, investors have fled the market.

Bank of America Merrill Lynch said the timely execution of projects will be the differentiating factor for Noida in the near future.

So, if you are an end user looking for affordable housing, Noida is a suitable destination. For those with deeper pockets, especially investors looking to make a quick buck, Gurgaon is the way to go.

source:- http://profit.ndtv.com/news/property/article-why-gurgaon-is-a-better-property-destination-than-noida-320498

Mumbai housing prices soar by 66 per cent in 4 years

New Delhi: Housing prices have increased by an average 66 per cent in Mumbai over the last four years on account of steady demand and rising input cost, according to property consultant Jones Lang LaSalle (JLL).

The increase has been even higher at 70 per cent in Thane and 74 per cent in Navi Mumbai.

"The cumulative price escalation figures for Mumbai, Thane and Navi Mumbai represent the highest among all cities in India," JLL India Managing Director (West) Ramesh Nair said in a statement.

Gurgaon and Bangalore saw price appreciation of 52 per cent and 46 per cent, respectively, during this period.

"Residential property prices in Mumbai have increased steadily after the correction seen post the Lehman debacle. In the period from the second quarter of 2009 to the same quarter in 2013, residential real estate prices in Mumbai have increased by 66 per cent," Nair said.

On reasons for price rise, Nair noted that the demand for investment residential properties and end-user homes in the country's financial capital has remained stable.

That apart, the consultant attributed the prices movement to limited supply of clear land, reduction in new launches between 2011 and 2012 middle and high interest rate scenario.

"In the Indian city which has for years carried the unwholesome reputation of being the most over-priced in terms of residential real estate valuations, there is no relief in sight for aspiring home buyers.

"Over the last four years, property valuations in the financial capital have increased by an average of 66 per cent. All 'expert' predictions over the last 3 years, of an imminent correction have proved to be wrong," Nair observed.

source:- http://profit.ndtv.com/news/industries/article-mumbai-housing-prices-soar-by-66-per-cent-in-4-years-322161

New home launches in NCR decline 39% in January-March

New Delhi: The property market of the National Capital Region (NCR) saw a 39 per cent fall in the new launches of apartments to about 7,600 units during January-March period compared with the previous quarter, global realty consultant Cushman & Wakefield said today.

In the top eight cities of the country, Cushman & Wakefield (C&W) said that an estimated 38,000 residential units were launched in the first quarter of 2013, registering a marginal fall of about 2 per cent over the previous quarter.

These major eight cities are -- NCR, Chennai, Kolkata, Bengaluru, Mumbai, Hyderabad, Pune and Ahmedabad.

"National Capital Region (NCR) witnessed the launch of approximately 7,600 units, a decline of 39 per cent compared to the previous quarter," C&W said in a statement.

The new launches were concentrated in the suburban locations of Gurgaon (66 per cent) and Noida (34 per cent) with over 80 per cent of units catering to the mid-range segment.

"Due to the subdued demand, Noida witnessed a steep decline in new launches at close to 70 per cent and ended up being the primary contributor for the overall decline in number of launches in the NCR," the consultant said.

Chennai, Mumbai, Hyderabad and Ahmedabad also witnessed decline in new launches of residential units by 39 per cent, 3 per cent, 89 per cent and 62 per cent, respectively.

"New residential units launched more than doubled in Bengaluru and Pune in the last quarter, increasing by 144 per cent and 109 per cent, respectively," C&W said. Kolkata saw a modest increase of three per cent.

On prices, the report said that most locations in Delhi witnessed stable capital values in both mid and high-end segments.

However, capital values in high-end segment in South Central Delhi witnessed 15 per cent appreciation over last year due to limited supply and high demand.

Among the suburban locations, Gurgaon saw higher appreciation due to the high demand from both end-users, the workforce working in the various companies located here and investors, coupled with the limited project completions.

Gurgaon saw a change in the capital values in the luxury/high-end and mid-end residential segment at 29 per cent and 18 per cent respectively over last year, C&W said.

"The country's residential market witnessed some vibrant launch activity during the quarter despite the sluggish economic environment. Funding will remain a major challenge for developers while executing these projects," C&W executive managing director (South Asia) Shveta Jain said.

"Capital values have largely remained stable across most micro markets except for some key locations in NCR, Chennai and Bengaluru. Prices are expected to remain largely stable in the coming months as developers will be looking mainly to boost sale and increase cash flows in projects being currently executed," Ms. Jain added.

source:- http://profit.ndtv.com/news/industries/article-new-home-launches-in-ncr-decline-39-in-january-march-322962

Gurgaon, Noida property markets gain, Delhi loses ground

To beat the blues, builders in Delhi are attempting new initiatives like throwing in maintenance and facility management services. Despite all this, builders are wary of cutting prices just yet, fearing a crash

Suburban Delhi property market is seeing a lot of action, while the South Delhi market is reeling under pressure. Demand for projects in Gurgaon and Noida has risen on the back of better specifications and overall amenities, and often at the cost of central and south Delhi properties.

Delhi's posh Defence Colony, Vasant Vihar, New Friends Colony and Safdarjung are witnessing a slowdown in demand, with many new floors remaining vacant. To beat the blues, builders are attempting new initiatives like throwing in maintenance and facility management services. Despite all this, builders are wary of cutting prices just yet, fearing a crash. The correction is assumed to be largely on account of an increase in supply and general slowdown in the market.

The National Capital Region (NCR) is often called India's most speculative real estate market. Delhi's suburbs Noida and Gurgaon are seeing plenty of action, but at the cost of premium real estate in the capital. The focus is on the South Delhi property market that is reeling under immense pressure.

Also Read: Middle class chase elusive dream of buying affordable homes

Manish Aggarwal, ED, Cushman and Wakefield India, says, "Though the prices being quoted are stable, which is at par with what we had seen around a year back. However, because of low investor activity and the market being completely end-user driven right now, there is a discount on the offering should somebody want to negotiate."

There is demand for projects in Gurgaon and Noida as their specifications and overall amenities are much better. Rohan Sharma, senior manager research, Jones Lang LaSalle India, says,"Most of the investor money is now being driven towards Gurgaon and Noida, as these suburbs are offering much better projects in terms of specifications and overall amenities. So, there are a lot of luxury projects being launched in these parts."

Businessmen, High Networth Individual (HNIs) and expatriates are going slightly slow because the prices have become unviable for them in the long run in terms of the overall cost that they are coming at to them.

The property market is made up primarily of builder flats, which till sometime ago were trading north of Rs 7-10 crore a piece. This space is occupied not so much by established pan-India players, but more by local builders like Salcon, Uppal and Saluja.

What typically happens is a family or landowner enters into an agreement with one of these developers to develop what are commonly known as builder floors. The number of flats depends on the plot size.

Delhi's posh Defence Colony has seen a surge in builder floors. Brokers say flats on a smallish 217 square yard plot are being quoted for more than Rs 6 crore and in excess of Rs 7.5 crore for a ground floor apartment or the top floor with a terrace. Starting price of a flat on bigger plot size of 325 square yard is Rs 9-11 crore. However, dozens of these new floors are currently lying vacant for want of buyers.

The story is the same in Vasant Vihar where a recent deal saw prices touch Rs 20 crore for a floor on 600 square yard plot. However, that was after heavy bargaining. Brokers say the situation is tough. Even other South Delhi colonies like New Friends Colony and Safdarjung are seeing the pain.

However, builders are wary of cutting prices just yet, fearing a crash. The correction is largely on account of an increase in supply and general slowdown in the market. So if you're in the market, this is your chance to negotiate a better deal.

Aggarwal says, "There has been no price reduction in the offering. However, there are good discounts to be taken from the developers. This is the right time to do so. The discount would be in the range of 10-15 percent, depending on the property size and the location. This can be even further, however, one needs to negotiate."

To beat the blues, builders are attempting new initiatives like throwing in maintenance and facility management services. Earlier the maintenance wasn't a part of the package developers used to throw in. Aggarwal says, "Now, some of the more reputable developers are offering that as a package and at a price which does not have too much of profit margins for developers. However, because of the slowdown, they are offering this as a package along with a price which they are offering. It is an extra cost and usually the kind of service offerings are facility management, which include common area cleaning, maintenance of your power backup, if the developer is providing central air conditioning then he would also maintain that and sometimes even provide you with basic services of a plumber and electrician."

Prices have not budged in the last one year and Delhi's loss has been Gurgaon's and Noida's gain. Cushman & Wakefield notes Gurgaon has recorded a much higher price appreciation with prices in the luxury residential segment rising almost 29 percent year-on-year (YoY).

Aggarwal says, "The South Delhi areas, these apartments or builder flats can be compared to the likes of super premium developments that developers like DLF are offering and which are pretty much in the same price range, however, offering far better amenities and the finishing's are probably comparable or even better."

The property market in the commercial capital Mumbai at best can be called subdued. High unsold inventory and low deal activity has kept the prices stable. To drive up sales, developers are launching apartments with smaller configurations. The 80:20 payment scheme is also becoming more popular in the city. Mumbai-based Lodha Developers is attempting yet another initiative.

The company has pre-launched the third tower of its Grande Project in Thane. It is priced at Rs 8,883 per square foot or Rs 1.08 crore for a two BHK spread across 1,134 square feet. The catch, the price is only for the first 27 residences and the offer is open only for two days, the weekend of 22nd and 23rd June. There is no information on what the prices would be post the special offer, but details were not forthcoming.

Lodha is following a similar strategy for its other project Lodha Golf Links in Navi Mumbai's Kalyan-Shil Road. It is pre-launching a seven storey tower called the Ramana at its 30 acre 9-hole golf course.

This offer is only for the first 18 units the company sells and the booking amount is the same as Lodha's Grande project at Rs 1.08 crore. The project can be previewed only by invitation and if someone manages to make the cut, then Lodha is throwing in a three-year free membership with the purchase of a unit.

Other Mumbai developers too are coming out with similar schemes for soft launches. A few are even reducing prices of unsold inventory for a limited period of two to three days.

Interestingly, Saudi Arabia's Prince Al Waleed Bin Talal is giving a second shot to his dream of building the world's tallest tower at one mile or 1.6 kilometers. The Prince said he's in talks with Dubai's largest realty firm Emaar Properties to team up with his investment firm Kingdom Holdings for this project. However, there's nothing concrete on the table yet, including the location of the project.

The prince is inviting offers from all major cities from New York to London to Shanghai and is clear countries interested in hosting the world's tallest one mile high tower would have to offer tax breaks, financial incentives and all other necessary government support.

If this tower is indeed built, it will stand at double the height of the world's current tallest skyscraper, that's the Burj Khalifa at 828 meters in Dubai. If built, the skyscraper will also dwarf the one kilometer tall Kingdom Tower currently under construction in Saudi Arabia. The Kingdom Tower was initially conceptualized at 1.6 kilometer or one mile high, but plans had to be scaled back as the soil was not strong enough to support the prince's towering ambition.

source:- http://www.moneycontrol.com/news/real-estate/gurgaon-noida-property-markets-gain-delhi-loses-ground_905331.html

Best property buys in Noida, Gurgaon

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source:- http://profit.ndtv.com/videos/the-property-show/video-best-property-buys-in-noida-gurgaon-268350

Affordable housing project going up in North Austin

Crews broke ground recently on a 228-unit North Austin affordable housing community that will cost $21 million to construct.

The Paddock at Norwood, expected to open by April 2014, will offer one-bedroom units for $755, two-bedrooms for $895 and three-bedrooms for $1050, the Austin American-Statesman reports. The complex is for households earning 60 percent or less of the area's median income.

The project also features a clubhouse, fitness center, a playground and a business center.

Craig Alter, executive vice president of the Strategic Housing Finance Corp. of Travis County, told the Statesman that nearly 30 percent of the $21 million cost will come from income tax credits allocated from the state.

The community will be the first new affordable housing project to rise in North Austin since 1999, Louisville-based LDG Development said in the article.

The city of Austin is hoping voters will approve $65 million in bonds this fall to build and repair affordable housing across the city.

source:- http://www.bizjournals.com/austin/blog/morning_call/2013/08/affordable-housing-project-going-up-in.html?iana=ind_rre

Connecting the dots' in the global real estate market

I t's no news that Chinese real estate developers and property buyers are flooding into the US - something that's currently, to many Chinese, a better investment than gold - and it's bringing more than just cash into the market.

The increasing interest from the Chinese in US real estate is also creating new business opportunities.

Jason Chen, chairman of Shenzhen World Union Properties Consultancy Co Ltd, a listed company that provides real estate consulting services in China, sees it as a trend.

"So the idea is to team up with local agents in the US - even smaller ones (compared to the size of World Union) - to serve the growing number of Chinese buyers here," said Chen, who recently attended a business forum in New York to make new business connections.

"That is the trend now," said Chen, adding he has visited New York three times this year and has a few agencies in mind.

World Union employs some 15,000 people across China who broker all kinds of properties. With a market share of 3 percent, its revenue last year was close to $34.4 billion with the sale of some 300,000 apartments across China, and profits that make him look beyond the home market.

"We won't really operate solo here [in New York], and this won't be money-making in the beginning, but we see this as a trend that is still developing and we want to be part of it," he said. "We just need to find a trustworthy partner and feed them with our Chinese client source list."

Chen's plan is echoed by industry leaders in the US real estate market who call it a way to "bridge a gap".

"In various So Cal communities, we've experienced an upward trend in Chinese buyers purchasing our homes and the majority of those are not local Chinese buyers but those coming from China," said Brian Harrelson, a senior project manager in the Southern California office of Toll Brothers, a US luxury homebuilder.

As part of their strategy to attract more Chinese buyers, Toll Brothers has teamed up with realtors for joint events to provide more buyer services, including reimbursing home buyers' international airfare on their Fly-and-Buy program.

"There are a lot of agents in China," said Harrelson, "so we're thinking: how can we empower them by providing supporting information in Mandarin and develop relationships between the local and Chinese agents so they work together?

"If we can bridge that gap, there will be more potential buyers in the pool, rather than just what we see domestically," he said.

Chinese buyers accounted for 18 percent of the $68.2 billion that foreigners spent on residential properties in the US during the 12 months ending March 31, according to the National Association of Realtors.

Chinese shoppers are known for being "cash-buyers" and for buying expensive homes, spending a median price of $425,000, almost double the median of what other foreign buyers pay.

In California, the Chinese are the third-largest foreign buyers of real estate, after Mexicans and the Filipinos, according to Realtor.org.

"The growing number of international buyers in Los Angeles has been an ongoing trend," said Sally Forster Jones, an agent with Coldwell Banker International in Los Angeles.

"More and more of the high-end deals are going to international buyers, many of which are coming from China. This is a growing market so it makes sense to do everything possible to tap into the needs of this demographic," said Jones.

"I think that the willingness of local and international real estate agencies to work together can bring positive results," said Jones. "We are really living in a global marketplace and real estate is a very collaborative business where connections are everything."

In New York, Chinese are second only to wealthy Dominicans in purchasing homes.

"It's clear that wealthy Chinese are looking for good investments and NYC real estate is especially appealing to them, so it's nice to have brokers working together to connect those dots, especially when there are language barriers," said Todd Dumaresq, a marketing manager with Toll Brothers City Living in New York.

In late June, US developer Tishman Speyer and China's largest residential developer Vanke broke ground on a joint venture to build 655 luxury condos on the San Francisco waterfront.

Vanke is one of World Union's clients in China, so, according to Chen, it makes sense for them to follow their big client to the US.

"Our business follows our clients - most of whom are major Chinese commercial and residential developers in China - and they are all looking into the US now," Chen said.

source:- http://usa.chinadaily.com.cn/opinion/2013-08/08/content_16883091.htm