Bangalore IT sector in purchase mode but Hyderabad cautious

January 15, 2010

It is mixed sentiments for some players in the real estate industry as IT sector in Bangalore trundles back on purchase mode but Hyderabad displays a cautious sentiment owing to the current political situation.

"The IT customer is back on track", Sunil Mantri, chairman of the Sunil Mantri Group, a leading real estate firm in the IT city, said.

"The IT employee is back to buying properties,” Mantri said while stating that in its to be launched project on Sarjapur road, out of the 100 bookings 90 per cent were IT employees.

"An IT employee who was worried about his job and cuts in salary and had gone slow on purchasing decisions, is now back trying to purchase,” Mantri added.

"The real estate sector is a very sensitive sector. Investments in these sectors are long term and not easy to exit unlike fixed deposits and stocks that can be exited from easily. Hence IT employees, who were worried about losing jobs and rollback of packages, were not in the purchasing mood right from end of 2008 to September 2009," said Mantri.

"But post September the confidence has returned,” Mantri claimed.

"The last four months have been good. We have seen a 40 percent increase in purchase in the last four months. Out of which 50 percent would be from the IT sector,” said Swaroop, senior vice president, Prestige.

However, while the IT city of Bangalore has given the sector reasons to smile, Hyderabad was a cause for worry.

"We are going slow in Hyderabad on our projects", Sunil Mantri said as buyers were cautious and the mood not too upbeat. The group has four projets with 5000 units planned till 2014-15 has decided to roll out these projects "in phases".

"We are cautious in Hyderabad," said Mantri. Hyderabad which was one of the hottest markets till last year had gone on a slowdown track after the Telangana issue.

"We are looking at a turn around and things looking up from 2010,” said a managing director of Jones Lang La Salle Meghraj, a global real estate service firm.

"IT employees are beginning to look at purchasing and enquiries have been coming and sale taking place in Bangalore,” he said.

However, properties that were exclusively developed for IT/ITES sector like luxury apartments were no longer happening as before.

"In Hyderabad, there had been an oversupply and until these are absorbed, we do not expect any fresh projects,” he said.

Moreover, Hyderabad had been harder hit than Bangalore during the recession as it was more IT/ITES dependant. "IT-ITES was its only USP", but "In Bangalore, IT was not the only market driver for the real estate sector".

Source : www.realtyplusmag.com

Mallya, Prestige Estates join hands to build luxury apartment in Bangalore

January 15, 2010

Bangalore-based billionaire businessman Vijay Mallya, in association with Prestige Estates Projects Pvt Ltd, is developing K2, a luxury apartment block in central Bangalore.

Prestige has a 45 per cent stake in the development -- a 33-storey complex, with six levels of parking, multiple tennis courts, swimming pools, and the additional benefit of the liquor baron for a neighbor, the Mint has reported.

Mallya will take the top three floors of the building, which will have 125 flats of 3,000 sq ft and 6,000 sq ft.

According to the report, the development is already making waves in a city that remains a conservative and price-sensitive realty market where flats sell for Rs 3,000-4,000 per sq ft. In contrast, apartments in K2, which is a working name for the project and may be changed later, will sell for at least Rs 20,000 per sq ft, say property consultants. At that rate, a 3,000 sq ft apartment will cost Rs 6 crore and a 6,000 sq ft one Rs 12 crore.

Mallya and Prestige aren’t the only ones eyeing the super-luxury market in Bangalore. Dubai’s ETA Star Property Developers (P) Ltd, Skyline Constructions Ltd and Mantri Developers Pvt Ltd too have set out to build multi-crore apartments at a time when conventional wisdom in the real estate business favours budget and mid-income homes, the report added.

“The concept of K2 is to own a palace in the sky, with the lower six floors reserved for parking,” quoted Irfan Razack, promoter of Prestige Estates in the report.

“Plans are being frozen and will be submitted for mandatory sanctions. We begin construction mid-year and expect to finish by 2013,” Razack added.

Besides K2, Prestige Estates, which has filed for approval to make an initial offering of shares to the public, is building 5,000 sq ft duplex apartments, each with its own garden, on Lavelle Road, near both K2 and UB City, a high-end retail and commercial development, and plans to sell these for around Rs 7.5 crore each, it said.

Source : www.realtyplusmag.com

Realty Rewind!

January 09, 2010

Vinod Behl

The year 2009 will be regarded as a unique year for the Indian realty. A year that brought both despair and hope. The real estate boom that went bust in 2008 saw real estate players, investors and property consumers experiencing its pain with the onset of 2009. The global economic slowdown added to their woes. But then, luckily this pain, much against expectations did not last long. The second half of the year brought in a glimmer of hope. In the third quarter, there were clear signs of realty revival while the fourth quarter has brought the much needed relief to the real estate players, with demand for property picking up.

The government played its role to revive the ailing real estate sector through its well thought out fiscal policy and supporting stimulus. While the real estate is now out of the ICU, it is clearly yet not out of the hospital. Therefore if the recuperating real estate does not take proper post-operative care, it runs the risk of once again slipping into serious health problem.

It is equally sad to see a section of the industry blaming global economic slowdown for the crisis that plagued real estate sector. The truth is that real estate bomb was ticking away and the bubble was just waiting to burst. The global economic crisis only made the matters worse for the real estate market.

It was the case of killing the proverbial goose that laid the golden eggs. The sheer greed of the industry players was what led to real estate fiasco. They resorted to overkill with mad frenzy to build homes, offices and shopping centers and even taking to land hoardings. They further spread it thin by moving into non-core areas. By kicking up speculative buying frenzy, they prepared a sure recipe for disaster.

It is high time the real estate community mends its old wayward ways and puts its house in order. The boom period saw real estate developers dishing out what they wanted to serve rather than what the consumers needed. Fortunately, many of them have now turned to affordable housing which is in great demand. By moving out of the non-core businesses and making their operations cost effective and efficient, they are making serious efforts to put their business back on rail, though funding and execution challenges still remain.

That the pain did not last for long, may well have worked in favour of the real estate sector. But then there is an inherent danger in it as many players may not draw any lessons from the real estate bust. Instead, they may well be back to their old ways that led to speculative buying frenzy and property price bubble.

One hopes that the real estate sector emerges from the crisis. Let the bitter memories be a thing of the past and the New Year bring in sanity, paving a way for systematic and sustainable growth of real estate in the months ahead.

Source : www.realtyplusmag.com

Sobha to launch projects worth Rs 2,800 crore

January 06, 2010

Sobha Developers, the Bangalore-based publicly held real estate developer, is positioning itself on the springboard as it envisages launching projects worth Rs 2,800 crore over the next 12-18 months covering 8 million square feet.

As of March 31, 2009, Sobha with a topline of Rs 1,400 crore, completed 12.46 million sq ft residential projects and commercial in-house projects, and 18.30 million sq ft of contractual projects. In addition the company has more than 30 projects aggregating 9.30 million sq ft under construction in residential category and also 34 projects aggregating 5.85 million sq ft under contracts from Infosys and other companies, the Business Standard has reported.

Citing a senior company official, the report said that during December a total of 100 units were sold and the operations are cash flow positive, “A fact which was not there during the corresponding period of last year.”

The official said that the company is generating cash to repay loans without any hassles and they have been able to secure further line of credit to the tune of Rs 200 crore for various projects. “Banks are also now comfortable in approving housing loans for retail consumers and we are feeling the positive effects of this,” the official added.

The company which during the past two quarters took concrete efforts to reduce its leverage on debt has managed to bring down the ratio to 0.8 from a peak of 1.6 on a debt of close to Rs 1,900 crore. “The debt now is at Rs 1,450 crore and we intend to have the leverage at 0.7 by March 2010 and get it further down to 0.5 by March 2011,” the official detailed.

Sobha Developers, which has a land bank of 3,030 acres, is looking to sell two land parcels in Bangalore covering a total area of close to 44 acres which should fetch Rs 120 crore. In addition to this, the company is also hawking a land parcel of 103 acres in Pune which is expected to fetch Rs 250 crore. These moves come after Sobha raised Rs 530 crore through the Qualified Institutional Placement route during September 2009 and raised another Rs 225 crore by offloading stake in few special purpose vehicles, the report added.

The company official further detailed that they are developing the concept of Sobha Value Homes and it be will launched in Bangalore and Coimbatore to start with. “Of the 8 million sft of fresh development we are planning to start, 20-25 per cent will be for this,” the official further added.

Great Housing Options : Bangalore Flat/Apartments

from India Property Seller by Pawan Sharma

After four big metro cities of India, Bangalore is the most preferred location for owning a house. Various reasons are there to support this fact. Large number of people is moving there for employment. There is great demand for all kinds of housing in this city to accommodate this migrant as well as original population, which is also increasing.

From all sections of population, there is increasing demand for flats and apartments. Flats are seen as the solution of fulfilling the increasing demand for homes. Flats are the housing units, which are the part of larger housing complexes; there are several flats within a single building. It saves precious space and reduces costs for the house owners as they share the space with many other people but with complete privacy of their own home. Besides reduced costs, flats are preferred as they offer the residents more safety and security as many flats are built in close proximity of each other.

With expansion of the city in various sectors, Bangalore is experiencing the large growth in real estate sector. Developers are providing all kinds of Apartments and Flats in Bangalore to meet the demands and requirements of different kinds of investors and owners. On one side, there are great options for the people who are looking for affordable housing. There are many flats available in middle and low range at the outskirts and other new colonies. These flats have basic constructions but according t o the modern design standards. Flats or apartments in areas like Whitefield, Malleswaram- Rajajinagar, and Old Madras Road are still affordable.

At the same time, there is up surging demands for high-end luxury apartments in very posh locales of this city. Bangalore, being the IT hub, is the host to many NRIs and foreigners who are there for business or employment. They need apartments complete with international standards of luxuries. Apartments in areas like Bangalore Richmond Road, M. G Road, Brigade Road, Cunningham Road command exclusively high prices.

Thus, you see there is huge distinction in the type of the flats available and their prices according to the locales and the facilities they offer to flat owners.

Google beefs up mapping and real estate search

November 20, 2009

Google has beefed up its map search considerably with basic natural phrases now added. In the past a user has to select real estate, now all they need to do is use basic search terms in mapping.

“Recently, we have been working on a particularly interesting project that combines Google Maps and search technology -- we’ve been trying to work out if your search query in Google Maps means you’re interested in having current real estate listings returned to you,” a press release from Google said.

“So here’s what we’ve been cooking up – in the past, if you wanted to view real estate listings on Google Maps, your best bet was to select “Real Estate…” from the “More” menu at the top of the map. Now, simply searching for “real estate” will return, well, real estate. You could also try “homes for sale Sydney” or “homes for rent Adelaide”. Or while you’re at it, check out “apartments for sale Brisbane”, or “homes for rent near Perth”.

“We also wanted to tell you about the integration of real estate listings with Place Pages. Now clicking the “more info” link next to a listing takes you to a faster, easier-to-read page that gives you all of the information we have about a listing: photos, inspection times, videos, details, a Street View preview and nearby public transit information if available, allowing you to quickly find the listing you want and click through to the sources of the listing,” it added.

“We hope you find these features improve your real estate search experience on Google Maps,” Google said.

Brigade group plans budget housing

Published by Newsroom November 18th, 2009 in Affordable Housing - New and Newsbytes.

Brigade group, Bangalore-based real estate developer, is testing the waters of affordable housing with ‘Brigade Value Homes’ which it plans to launch in Bangalore. The company is looking to invest Rs 2,000 crore on building compact residential properties in the next four years.

The company will build low-cost residential projects on Kanakapura Road, Devanahalli Town, Mysore Road and K R Puram in Whitefield, totalling 10,000 homes with a base price in the range of Rs 10-26 lakh, of which 2,500 units will be available for registration in the first phase.

A one BHK flat of 500-550 sq feet costs around Rs 10 lakh to Rs 13 lakh. Two BHK with 850-900 sq feet is priced in the range of Rs 17 lakh to Rs 21 lakh while three BHK with 1,050-1,100 sq feet is priced at Rs 21 lakh to Rs 26 lakh. The company plans to launch the properties in the next 6-12 months.

“To a certain extent, the compact home project is a way to ascertain the demand for a specific location or a type of apartment. There is a huge demand at the bottom of the pyramid. With urban population expected to double in the next few years, we expect the demand for affordable hous-ing to go up,” said M R Jaishankar, chairman and managing director, Brigade Group.

Funding for the new initiative will come through 163rd each from internal accruals, customer advances and institutional funds. While the company has no plans to set up a subsidiary for low-cost housing, the Devanahalli project will be operated as an SPV with BCV Developers, a joint venture of Brigade Group and Classic Valmark.

Other cities being looked at for future expansion under the affordable housing initiative are Mysore, Mangalore and Chennai. At Mangalore, the company has soft launched a residential project ‘Brigade Sparkle’ which will offer 230 units priced between Rs 18 lakh and Rs 25 lakh.

The Brigade group, with interests in residential, commercial property as well as hospitality is developing projects in these sectors and is expecting to get approvals for nearly 12-15 projects by March 2010. This includes projects in Hyderabad, retail property and business hotel in Chennai and SEZs in Mangalore and Kochi. It is developing close to 35 million sq feet presently and is looking to develop 12 million sq feet in the coming months. Early this year, the company had spoken about diluting the stake of its wholly-owned subsidiary, Brigade Hospitality Services (BHSL) for raising capital. Jaishankar said JP Morgan had been mandated for the purpose and that the company could look at a dilution of 25-30 per cent by the 1st quarter of 2010.



Source: Business Standard