With the job market booming, the home loan market in Chennai is second only to the National Capital Region.
Mumbai has always been the number one market for most consumer products and services, followed by the National Capital Region (NCR) and other metros. In the home loan market, however, the NCR has been number one followed by Mumbai. Today, Mumbai has dropped to number three position and Chennai is number two.
Ask Deepak Parekh, Chairman of HDFC. “Today business in Chennai is bigger than that in Mumbai. Chennai ranks as the second largest market after the NCR in loan applications.”
Does this mean the residential real estate market has been growing faster in Chennai compared to other metros? “Chennai has done better compared to Mumbai. The reason for that are the property prices. It is still affordable in Chennai and a good property is available in the range of Rs 5,000 to Rs.7, 000 a sq. ft. In Mumbai, there is hardly any property available at less than Rs 10,000 a sq ft., and that too in a distant suburb,” says Renu Sud Karnad, Managing Director, HDFC Ltd.
V. K. Sharma, Director and Chief Executive, LIC Housing Finance, also stated at a recent Chennai property fair that the southern region was the strongest market for LIC housing finance, with the growth led by Tamil Nadu. Loan disbursals continued to be strong in Chennai and other cities including Coimbatore, Madurai and Tirunelveli. The target for the southern region is Rs 5,500 crore against Rs 4,125 crore last year.
For HDFC, according to Ms. Karnad, loan approvals and loan disbursements grew by 22 per cent and 20 per cent respectively, during the quarter ended June 2011, compared to the corresponding quarter in the previous year. However, the average loan size has remained the same at Rs 18.6 lakhs. This indicates that the disbursements have grown based on more people borrowing/buying property rather than increase in property prices.
A combination of factors ranging from increase in number of nuclear families to growing job opportunities in Chennai have led to a steep demand for residential real estate. Chennai has always been a conservative market as far as residential real estate is concerned. It has two types of consumers — first time buyers and investors (people looking for a second home). The booming job market in Chennai and suburbs has created a need for affordable housing, says Srinivas Acharya, Managing Director, Sundaram BNP Paribas.
According to Mr. Acharya, his company's total home loan disbursement for Chennai city is around Rs. 25 crore to Rs. 35 crore per month. The home loan market Chennai is estimated to be Rs. 550 crore. The need for owning a house is also due to increase in rental values within the city. Instead of going in for rented accommodation, first time buyers prefer to buy a property with the help of a loan. As far as investors are concerned, they prefer to invest in land or a house as it fetches more or equal appreciation.
Some are, however, concerned. Is a bubble building in the housing sector? With the rise in the interest rates and increase in demand, is this bubble waiting to burst? That is unlikely, says heads of the financial institutions. The recent spate of interest rate hikes has made funds costlier. But the enthusiasm in the end-user segment in the southern cities has not evaporated, they feel.
Most purchases are by middle-income borrowers and not by investors or speculators. House is a necessity for them. Interest rates will have a lesser impact on demand for loans than other factors like unstable employment and very high property values. The cost of a house as a multiple of the annual income of a borrower is currently estimated at 4.8 times. In other words, it takes about 4.8 years' income to buy a house. As long as that ratio stays in 4.2-5.5 range, housing loan demand will be there, says Ms. Karnad.
Friday 22 July 2011
Real Estate Round Up - July 18 to July 22, 2011
According to reports, DB Realty had formed a joint venture with Man Ajwani under the name DB Conwood Man Ajwani to develop the project and in mid 2009, got a letter of intent from PCNTDA.
Top Stories
Two realty deals cancelled in 2 weeks
Two Real estate companies deal have been cancelled. Firstly, Oberoi Constructions, a wholly owned subsidiary of Oberoi Realty Ltd has terminated the Juhu centaur hotel deal. The company’s arm Oberoi Constructions Ltd is a 50% joint venture in Siddhivinayak Realties Private Ltd. SRPL had entered into an agreement with V Hotels for purchase of a hotel property, namely , Centaur Hotel located at Juhu beach. The deal was under negotiation following a dispute between the parties. Following the termination of the deal, V Hotels is liable for a refund of about Rs. 730 mn. Another deal includes the DB Realty’s multi-crore township project in Pune has been scrapped.
According to reports, Pimpri-Chinchwad New Town Development Authority (PCNTDA), a local government body in Pune, has canceled the project of saying it had negated “bidding for the selection of the developer”. The authority has refunded the deposit of Rs. 50 crore to the developer for the project that was to come up at Bhosari, 14 km from Pune, reports added.
According to reports, DB Realty had formed a joint venture with Man Ajwani under the name DB Conwood Man Ajwani to develop the project and in mid 2009, got a letter of intent from PCNTDA.
Quote of the week
Pirojsha Godrej, Executive Director, Godrej Properties said, “We are very happy to have entered into two LLP’s with Godrej & Boyce. These are the second and third developments after our project, The Trees, in Mumbai that we will do in partnership with one of our Group companies. We look forward to additional future opportunities to partner with our Group companies. Our aim will be to create outstanding projects that offer our customers an environmentally friendly, well designed living environment.”
Allahabad HC delays hearing on Noida land acquisition
The Allahabad High Court reportedly deferred its verdict on the legality of land acquisition in two villages of the Greater Noida area popularly known as Noida Extension. HC will reportedly announce its verdict on July 26 on the plea of farmers and villagers from Roja Yaqubpur and Bisarakh Jalalpur villages, who went to court against the Noida Authority’s decision to acquire their land. According to reports, the court had already cancelled land acquisition in some of the villages of Greater Noida adding that the HC will hear pleas of farmers from Itheda, Haidarpur and four other villages on July 21.The HC on July 19 had overturned acquisition of nearly 600 hectares of land in Gautambuddh Nagar district. The verdict serves a blow to builders as well as potential home owners, as a lot of people have invested in the housing projects coming up in the area.
Interview with Vishal Gupta, Managing Director, Ashiana Housing Limited
In Focus Stories
IIFL recommends ‘Sell’ on DLF
IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, recommends ‘Sell’ on DLF with a target price of Rs. 180.The brokerage expects sales to continue to weaken considering the company’s dull guidance for FY12.
The constant rise in working capital on Rs. 11 billion of land acquisitions and rise in net debt by Rs. 57 billion in FY11 due to the redeeming of preference shares of SC Asia in DAL and those of Lehman Brothers in some subsidiaries would also pressure the company, IIFL said.
There was lower RoE due to slowdown in launches and contracted sales and a fall in profitability due to rising raw material and labour costs. Thus, we do not see a trend reversal in FY12 due to muted guidance, IIFL said.
The brokerage does not expect debt to reduce in FY12 and has cut its FY12 and FY13 EPS forecasts by 11% and 17% respectively. The report was published by IIFL’s Institutional Equities Research desk.
IIFL recommends ‘Buy’ on IDFC
Domestic News
Godrej Properties to develop 2 residential projects in Hyderabad and Thane
Godrej Properties Ltd. has formed two LLPs with Godrej & Boyce (G&B) to develop residential projects in Hyderabad and Thane.Godrej Buildcorp LLP (GB LLP) will develop the 9.16 acres land parcel at Moosapet, Hyderabad. The approximate developable area will be 2 million square feet. This is a profit sharing arrangement with GPL getting 35% of the profits from the project.
Godrej Property Developers LLP (GPD LLP) will develop the 3 acre land parcel at Thane. The approximate saleable area will be 0.26 million square feet. This is also a profit sharing arrangement with GPL getting 32% of the profits from the project.
Parsvnath plans to pull out six SEZs projects: report
Parsvnath SEZ Ltd, a Parsvnath Group subsidiary is planning to postpone six SEZs projects which includes Uttar Pradesh, Rajasthan, Haryana, Tamil Nadu and Maharashtra, according to a report. The report stated that the company had earlier been granted in-principle approval by the government.
Parsvnaths' request for pulling out from the SEZ projects and other applications will come up before the inter-ministerial Board of Approval (BoA), which is scheduled to meet on July 22, says report.
Mahindra to acquire Mumbai's Nepean Sea Road bungalow: report
The Mahindra Group's real estate arm is planning to pay Rs. 2.7bn to acquire a three-storey bungalow on south Mumbai's Nepean Sea Road, according to a report.The report stated that the bungalow, named Gulistan, occupies around 13,000 square feet of land opposite Priyadarshini Park and is owned by a special purpose vehicle set up by one of Mumbai's top builders, Orbit Corporation.
Arun K Nanda, chairman of Mahindra Lifespace, the real estate arm has reportedly said that it has signed a term sheet, or a preliminary agreement, with the current owners and made an advance payment of Rs. 110mn. If the deal went through, the Mahindras would continue to be a tenant, paying rent to Lifespace, says report.
Top Stories
Two realty deals cancelled in 2 weeks
Two Real estate companies deal have been cancelled. Firstly, Oberoi Constructions, a wholly owned subsidiary of Oberoi Realty Ltd has terminated the Juhu centaur hotel deal. The company’s arm Oberoi Constructions Ltd is a 50% joint venture in Siddhivinayak Realties Private Ltd. SRPL had entered into an agreement with V Hotels for purchase of a hotel property, namely , Centaur Hotel located at Juhu beach. The deal was under negotiation following a dispute between the parties. Following the termination of the deal, V Hotels is liable for a refund of about Rs. 730 mn. Another deal includes the DB Realty’s multi-crore township project in Pune has been scrapped.
According to reports, Pimpri-Chinchwad New Town Development Authority (PCNTDA), a local government body in Pune, has canceled the project of saying it had negated “bidding for the selection of the developer”. The authority has refunded the deposit of Rs. 50 crore to the developer for the project that was to come up at Bhosari, 14 km from Pune, reports added.
According to reports, DB Realty had formed a joint venture with Man Ajwani under the name DB Conwood Man Ajwani to develop the project and in mid 2009, got a letter of intent from PCNTDA.
Quote of the week
Pirojsha Godrej, Executive Director, Godrej Properties said, “We are very happy to have entered into two LLP’s with Godrej & Boyce. These are the second and third developments after our project, The Trees, in Mumbai that we will do in partnership with one of our Group companies. We look forward to additional future opportunities to partner with our Group companies. Our aim will be to create outstanding projects that offer our customers an environmentally friendly, well designed living environment.”
Allahabad HC delays hearing on Noida land acquisition
The Allahabad High Court reportedly deferred its verdict on the legality of land acquisition in two villages of the Greater Noida area popularly known as Noida Extension. HC will reportedly announce its verdict on July 26 on the plea of farmers and villagers from Roja Yaqubpur and Bisarakh Jalalpur villages, who went to court against the Noida Authority’s decision to acquire their land. According to reports, the court had already cancelled land acquisition in some of the villages of Greater Noida adding that the HC will hear pleas of farmers from Itheda, Haidarpur and four other villages on July 21.The HC on July 19 had overturned acquisition of nearly 600 hectares of land in Gautambuddh Nagar district. The verdict serves a blow to builders as well as potential home owners, as a lot of people have invested in the housing projects coming up in the area.
Interview with Vishal Gupta, Managing Director, Ashiana Housing Limited
In Focus Stories
IIFL recommends ‘Sell’ on DLF
IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, recommends ‘Sell’ on DLF with a target price of Rs. 180.The brokerage expects sales to continue to weaken considering the company’s dull guidance for FY12.
The constant rise in working capital on Rs. 11 billion of land acquisitions and rise in net debt by Rs. 57 billion in FY11 due to the redeeming of preference shares of SC Asia in DAL and those of Lehman Brothers in some subsidiaries would also pressure the company, IIFL said.
There was lower RoE due to slowdown in launches and contracted sales and a fall in profitability due to rising raw material and labour costs. Thus, we do not see a trend reversal in FY12 due to muted guidance, IIFL said.
The brokerage does not expect debt to reduce in FY12 and has cut its FY12 and FY13 EPS forecasts by 11% and 17% respectively. The report was published by IIFL’s Institutional Equities Research desk.
IIFL recommends ‘Buy’ on IDFC
Domestic News
Godrej Properties to develop 2 residential projects in Hyderabad and Thane
Godrej Properties Ltd. has formed two LLPs with Godrej & Boyce (G&B) to develop residential projects in Hyderabad and Thane.Godrej Buildcorp LLP (GB LLP) will develop the 9.16 acres land parcel at Moosapet, Hyderabad. The approximate developable area will be 2 million square feet. This is a profit sharing arrangement with GPL getting 35% of the profits from the project.
Godrej Property Developers LLP (GPD LLP) will develop the 3 acre land parcel at Thane. The approximate saleable area will be 0.26 million square feet. This is also a profit sharing arrangement with GPL getting 32% of the profits from the project.
Parsvnath plans to pull out six SEZs projects: report
Parsvnath SEZ Ltd, a Parsvnath Group subsidiary is planning to postpone six SEZs projects which includes Uttar Pradesh, Rajasthan, Haryana, Tamil Nadu and Maharashtra, according to a report. The report stated that the company had earlier been granted in-principle approval by the government.
Parsvnaths' request for pulling out from the SEZ projects and other applications will come up before the inter-ministerial Board of Approval (BoA), which is scheduled to meet on July 22, says report.
Mahindra to acquire Mumbai's Nepean Sea Road bungalow: report
The Mahindra Group's real estate arm is planning to pay Rs. 2.7bn to acquire a three-storey bungalow on south Mumbai's Nepean Sea Road, according to a report.The report stated that the bungalow, named Gulistan, occupies around 13,000 square feet of land opposite Priyadarshini Park and is owned by a special purpose vehicle set up by one of Mumbai's top builders, Orbit Corporation.
Arun K Nanda, chairman of Mahindra Lifespace, the real estate arm has reportedly said that it has signed a term sheet, or a preliminary agreement, with the current owners and made an advance payment of Rs. 110mn. If the deal went through, the Mahindras would continue to be a tenant, paying rent to Lifespace, says report.
Godrej Properties Q1 net profit down 55.16 per cent at Rs 10.06 crore
MUMBAI: Real estate developer Godrej Properties (GPL) today posted a 55.16 per cent dip in its consolidated net profit at Rs 10.06 crore for the quarter ended June 30, 2011.
Its net profit for the corresponding period last year stood at Rs 22.44 crore, the company said in a statement issued here.
The total income of the company for the period stood at Rs 134.74 crore, reporting a 83 per cent rise as compared to Rs 73.46 crore in Q1 FY 11.
"Godrej Properties had a robust 83 per cent growth in its total income in what has been a difficult quarter for the real estate sector.
Our Ahmedabad township project, Godrej Garden City, has continued to receive an excellent response with over 0.24 million square feet of sales during the quarter, which brings the total sold in the project to 3.3 million square feet. We expect to see similar traction for the recently launched towers of the third phase of this project," GPL Chairman, Adi Godrej, said.
In the quarter, the total booking value grew by 70 per cent to Rs 232.47 crore from Rs 136.98 crore in Q1 FY 11.
During the quarter, GPL signed a Joint Development Agreement for a residential project in Chembur, Mumbai demonstrating its ongoing ability to source new deals through the joint development model, he said.
"We expect to deliver strong growth in new deals, sales and profitability during the rest of FY 12," Godrej added.
Its net profit for the corresponding period last year stood at Rs 22.44 crore, the company said in a statement issued here.
The total income of the company for the period stood at Rs 134.74 crore, reporting a 83 per cent rise as compared to Rs 73.46 crore in Q1 FY 11.
"Godrej Properties had a robust 83 per cent growth in its total income in what has been a difficult quarter for the real estate sector.
Our Ahmedabad township project, Godrej Garden City, has continued to receive an excellent response with over 0.24 million square feet of sales during the quarter, which brings the total sold in the project to 3.3 million square feet. We expect to see similar traction for the recently launched towers of the third phase of this project," GPL Chairman, Adi Godrej, said.
In the quarter, the total booking value grew by 70 per cent to Rs 232.47 crore from Rs 136.98 crore in Q1 FY 11.
During the quarter, GPL signed a Joint Development Agreement for a residential project in Chembur, Mumbai demonstrating its ongoing ability to source new deals through the joint development model, he said.
"We expect to deliver strong growth in new deals, sales and profitability during the rest of FY 12," Godrej added.
Ex-MySpace Director Deep Malhotra Launches Incubation Venture
Around 150 start-ups are expected to register; 20 will present their ideas to mentors and five will be selected.
Digital media executive Deep Malhotra, who was senior director at MySpace (India and South-East Asia) in 2010, has launched an incubation facility called Gemini New Media Ventures.
Set up with an investment of $1 million, the 4,500 sq. ft. facility is located in Chembur, Mumbai, and will be fully operational in two months. The 40-seat plug-and-play office will also offer administration, IT and legal support.
The company is accepting applications and expects 150 start-ups to register. Of these, 20 will be invited to present their ideas to mentors and finally, five will be picked to work in the facility.
“Internet entrepreneurs today face challenges due to poor Internet infrastructure and low risk appetite. Educating advertisers and the industry is also difficult, and more avenues for monetisation beyond advertisements should be explored,” said Deep Malhotra, founder & managing partner of Gemini New Media Ventures, as he spoke to Techcircle.in.
Malhotra believes that for a start-up, having a concrete business plan is not vital. “The difference between angel investors here and those in the Silicon Valley, according to me, is in the way they start out. Those in the Valley do not look for revenues up front. Look at Twitter – they haven’t figured out a revenue stream yet! So I believe what is required is a kick-ass product,” he says.
According to him, marketing is also unnecessary. “There is too much focus today on marketing the product. Take Bigadda, for example. They spent a lot of money, but could not generate revenues from it. No one is focusing on the product itself, why it is required and how to reach out to the audience.”
E-commerce, mobile application development and mobile services are the top areas of interest, said Malhotra. So far, 15 applications have been received, including a start-up that develops mobile phone apps for rural India.
On the filters for selecting the entrepreneurs, Malhotra said, “We will look for start-ups with ideas which can be taken to the next level. And it should be able to raise an angel round or VC fund after three-six months.” Gemini will seek to acquire minority stakes in the start-ups, once they raise a VC round of funding.
Currently, the team is in talks with international investors to mentor the start-ups and it will launch a mentor list next week. It is also in the process of raising $200,000 from investors in the real estate sector to run the operations.
Incidentally, Malhotra began with small stints at Jasubhai Media and Hungama Digital Entertainment, and then launched an online creativity magazine called OnMag.com, which was live between 2002 and 2004. But it could not survive the dotcom bubble burst as he could not raise funding beyond the angel round.
Malhotra then joined Rediff.com (India), focusing on banner advertising, CPM and online advertising. In 2005, he got an opportunity to be a part of Google’s founding team in India and was one of the first to join its direct sales division, heading its New Delhi and Mumbai units. At MySpace India, he focused on social media marketing till 2010 and then had a few stints with UTV's new media team, helping out with their online monetisation strategy.
Gemini will differ from other incubators such as Microsoft Tech Spark or those set up by angel funds and B-schools by introducing an 80:20 rule, where start-ups can help each other in the 20 per cent time spent in the facility.
Digital media executive Deep Malhotra, who was senior director at MySpace (India and South-East Asia) in 2010, has launched an incubation facility called Gemini New Media Ventures.
Set up with an investment of $1 million, the 4,500 sq. ft. facility is located in Chembur, Mumbai, and will be fully operational in two months. The 40-seat plug-and-play office will also offer administration, IT and legal support.
The company is accepting applications and expects 150 start-ups to register. Of these, 20 will be invited to present their ideas to mentors and finally, five will be picked to work in the facility.
“Internet entrepreneurs today face challenges due to poor Internet infrastructure and low risk appetite. Educating advertisers and the industry is also difficult, and more avenues for monetisation beyond advertisements should be explored,” said Deep Malhotra, founder & managing partner of Gemini New Media Ventures, as he spoke to Techcircle.in.
Malhotra believes that for a start-up, having a concrete business plan is not vital. “The difference between angel investors here and those in the Silicon Valley, according to me, is in the way they start out. Those in the Valley do not look for revenues up front. Look at Twitter – they haven’t figured out a revenue stream yet! So I believe what is required is a kick-ass product,” he says.
According to him, marketing is also unnecessary. “There is too much focus today on marketing the product. Take Bigadda, for example. They spent a lot of money, but could not generate revenues from it. No one is focusing on the product itself, why it is required and how to reach out to the audience.”
E-commerce, mobile application development and mobile services are the top areas of interest, said Malhotra. So far, 15 applications have been received, including a start-up that develops mobile phone apps for rural India.
On the filters for selecting the entrepreneurs, Malhotra said, “We will look for start-ups with ideas which can be taken to the next level. And it should be able to raise an angel round or VC fund after three-six months.” Gemini will seek to acquire minority stakes in the start-ups, once they raise a VC round of funding.
Currently, the team is in talks with international investors to mentor the start-ups and it will launch a mentor list next week. It is also in the process of raising $200,000 from investors in the real estate sector to run the operations.
Incidentally, Malhotra began with small stints at Jasubhai Media and Hungama Digital Entertainment, and then launched an online creativity magazine called OnMag.com, which was live between 2002 and 2004. But it could not survive the dotcom bubble burst as he could not raise funding beyond the angel round.
Malhotra then joined Rediff.com (India), focusing on banner advertising, CPM and online advertising. In 2005, he got an opportunity to be a part of Google’s founding team in India and was one of the first to join its direct sales division, heading its New Delhi and Mumbai units. At MySpace India, he focused on social media marketing till 2010 and then had a few stints with UTV's new media team, helping out with their online monetisation strategy.
Gemini will differ from other incubators such as Microsoft Tech Spark or those set up by angel funds and B-schools by introducing an 80:20 rule, where start-ups can help each other in the 20 per cent time spent in the facility.
Godrej Properties Q1 net profit at Rs100.6mn
Total income increased by 83% to Rs. 1347.4 mn in Q1 FY 2012 from Rs. 734.6 mn in Q1 FY 2011.
Godrej Properties Limited, a leading national real estate developer, today announced its financial results for the quarter ended June 30 2011.
Corporate highlights
Growth in top line led by strong sales performance
Total income increased by 83% to Rs. 1347.4 mn in Q1 FY 2012 from Rs. 734.6 mn in Q1 FY 2011.
Total booking value grew by 70% to Rs. 2324.7 mn from Q1 FY 2012 from Rs. 1369.8 mn in Q1 FY 2011
Net profit stood at Rs. 100.6 mn as compared to Rs. 224.4 mn in Q1 FY 2011
Godrej Garden City, Ahmedabad: The township project has witnessed consistent sales momentum.
Phase-III of the project launched in January 2011 logged sales of 1.56 mn sq. ft. in two quarters since its launch.
Additional new towers in phase – III of area 0.32 million sq. ft. were launched in July 2011.
Godrej Prakriti, Kolkata: The residential project witnessed a growth of 16% with bookings of 0.12 million sq. ft. in Q1 FY 2012 from 0.10 million sq. ft. in Q1 FY 2011.
Continued to successfully secure deals under the joint development model
Entered into a joint venture with Capsulation Services to develop a 0.1 million sq. ft. saleable area property at Chembur, Mumbai. GPL will share 47.5% of area. The project is located Off V.N Puran Marg (Sion – Trombay Highway).
Commenting on the financial performance of Q1 FY 2012, Mr.Adi Godrej, Chairman of Godrej Properties Limited, said: “Godrej Properties had a robust 83% growth in its total income in what has been a difficult quarter for the real estate sector. Our Ahmedabad township project, Godrej Garden City, has continued to receive an excellent response with over 0.24 million sq ft of sales during the quarter, which brings the total sold in the project to 3.3 million sq. ft. We expect to see similar traction for the recently launched towers of the third phase of this project. During the quarter, we signed a Joint Development Agreement for a residential project in Chembur, Mumbai demonstrating our ongoing ability to source new deals through the joint development model. We expect to deliver strong growth in new deals, sales, and profitability during the rest of FY12.”
Godrej Properties Limited, a leading national real estate developer, today announced its financial results for the quarter ended June 30 2011.
Corporate highlights
Growth in top line led by strong sales performance
Total income increased by 83% to Rs. 1347.4 mn in Q1 FY 2012 from Rs. 734.6 mn in Q1 FY 2011.
Total booking value grew by 70% to Rs. 2324.7 mn from Q1 FY 2012 from Rs. 1369.8 mn in Q1 FY 2011
Net profit stood at Rs. 100.6 mn as compared to Rs. 224.4 mn in Q1 FY 2011
Godrej Garden City, Ahmedabad: The township project has witnessed consistent sales momentum.
Phase-III of the project launched in January 2011 logged sales of 1.56 mn sq. ft. in two quarters since its launch.
Additional new towers in phase – III of area 0.32 million sq. ft. were launched in July 2011.
Godrej Prakriti, Kolkata: The residential project witnessed a growth of 16% with bookings of 0.12 million sq. ft. in Q1 FY 2012 from 0.10 million sq. ft. in Q1 FY 2011.
Continued to successfully secure deals under the joint development model
Entered into a joint venture with Capsulation Services to develop a 0.1 million sq. ft. saleable area property at Chembur, Mumbai. GPL will share 47.5% of area. The project is located Off V.N Puran Marg (Sion – Trombay Highway).
Commenting on the financial performance of Q1 FY 2012, Mr.Adi Godrej, Chairman of Godrej Properties Limited, said: “Godrej Properties had a robust 83% growth in its total income in what has been a difficult quarter for the real estate sector. Our Ahmedabad township project, Godrej Garden City, has continued to receive an excellent response with over 0.24 million sq ft of sales during the quarter, which brings the total sold in the project to 3.3 million sq. ft. We expect to see similar traction for the recently launched towers of the third phase of this project. During the quarter, we signed a Joint Development Agreement for a residential project in Chembur, Mumbai demonstrating our ongoing ability to source new deals through the joint development model. We expect to deliver strong growth in new deals, sales, and profitability during the rest of FY12.”
Ground reality: Mumbai flat rented for Rs 1.65 L a month
MUMBAI
An apartment in Worli, measuring approximately 1,100 square feet, was leased by a major corporation for a monthly rental of Rs 165,000. The area is one of the most-preferred residential locations for rental units due to the fact that it is located centrally, giving access to established and new business districts and is also well endowed with social and civic infrastructure.
Given the advantages and rising demand from corporate and end-users for rental accommodation, rental values in this location have seen a rise of approximately 4% over the last year and is expected to remain stable with an upward bias. Given the fact that residential rental market is sensitive to rapid price changes, we expect the market to hold steady.
CHENNAI
A residential unit on East Coast Road was leased by an individual for a monthly rental of Rs 1,10,000. Spread over an area of Rs 4,500 square feet, the house is fully furnished and provides all necessary white goods and fixtures and furniture. The Chennai market has seen a rise in rental property demand owing to a large influx of professionals from out of the city.
As a result, the rental markets have been seeing rapid rise in values, ranging from 7% to 22%, over a single quarter. East Coast Road is especially in spotlight as it gives its residences unabated access to the sea coast and the serenity of living away from the centre of the city, apart from being close to newer office locations.
HYDERABAD
A residential unit measuring approximately 1,770 square feet was sold for a total value of Rs 51,45,000. Part of a villa-style gated development, the house is located in Secunderabad and provides standard amenities such as clubhouse, gymnasium, swimming pool, banquet hall, 24X7 security, etc. The location was traditionally seen as peripheral to the main city of Hyderabad, but in recent times, due to its ability to provide large residential plots for development, the area has started to gain prominence.
The area is expected to see rapid development in the next few years, since the demand from end-users is increasing in Hyderabad.
The capital values of real estate in the city as a whole has increased by an average of 2-5% over the last quarter.
An apartment in Worli, measuring approximately 1,100 square feet, was leased by a major corporation for a monthly rental of Rs 165,000. The area is one of the most-preferred residential locations for rental units due to the fact that it is located centrally, giving access to established and new business districts and is also well endowed with social and civic infrastructure.
Given the advantages and rising demand from corporate and end-users for rental accommodation, rental values in this location have seen a rise of approximately 4% over the last year and is expected to remain stable with an upward bias. Given the fact that residential rental market is sensitive to rapid price changes, we expect the market to hold steady.
CHENNAI
A residential unit on East Coast Road was leased by an individual for a monthly rental of Rs 1,10,000. Spread over an area of Rs 4,500 square feet, the house is fully furnished and provides all necessary white goods and fixtures and furniture. The Chennai market has seen a rise in rental property demand owing to a large influx of professionals from out of the city.
As a result, the rental markets have been seeing rapid rise in values, ranging from 7% to 22%, over a single quarter. East Coast Road is especially in spotlight as it gives its residences unabated access to the sea coast and the serenity of living away from the centre of the city, apart from being close to newer office locations.
HYDERABAD
A residential unit measuring approximately 1,770 square feet was sold for a total value of Rs 51,45,000. Part of a villa-style gated development, the house is located in Secunderabad and provides standard amenities such as clubhouse, gymnasium, swimming pool, banquet hall, 24X7 security, etc. The location was traditionally seen as peripheral to the main city of Hyderabad, but in recent times, due to its ability to provide large residential plots for development, the area has started to gain prominence.
The area is expected to see rapid development in the next few years, since the demand from end-users is increasing in Hyderabad.
The capital values of real estate in the city as a whole has increased by an average of 2-5% over the last quarter.
Mahindra Lifespace Developers net up 14%
MUMBAI: Mahindra Lifespace Developers, the real estate and infrastructure development arm of the Mahindra Group, on Thursday reported a 14% rise in consolidated net profit for the quarter ended June at 14.26 crores. Operating income for the quarter grew 26% to Rs 103 crore led by improved residential space sales.
On standalone basis, the company's net profit rose 18% for the first quarter to Rs 17.09 crore, while operating Income jumped 20% to Rs 81.45 crore.
During the quarter, the company's residential sales stood at Rs 172 crore, up 87% from a year ago, led by higher space selling. It sold 340,000 sq ft of residential space during the quarter against 150,000 sq ft, the company said in its earnings release.
During the quarter, it launched the third phase of its project Aura spread over 300,000 sq ft in Gurgaon. According to the company, during the quarter the company has already sold around 85% of this project, which is part of a total 1.2 million sq ft development.
In June, the company also launched another residential building Royal Ivy with saleable area of 125,000 sq ft at The Great Eastern Gardens in Kanjurmarg suburb of Mumbai.
The company also highlighted that at Mahindra World City Chennai, the total number of customers as of June end were at 58, of which 37 are operational, and Holiday Inn Express is set to operate a Business Hotel here soon.
On Thursday, shares of Mahindra Lifespace Developers closed at Rs 373.90 on the National Stock Exchange, down 0.03% from Wednesday's close.
On standalone basis, the company's net profit rose 18% for the first quarter to Rs 17.09 crore, while operating Income jumped 20% to Rs 81.45 crore.
During the quarter, the company's residential sales stood at Rs 172 crore, up 87% from a year ago, led by higher space selling. It sold 340,000 sq ft of residential space during the quarter against 150,000 sq ft, the company said in its earnings release.
During the quarter, it launched the third phase of its project Aura spread over 300,000 sq ft in Gurgaon. According to the company, during the quarter the company has already sold around 85% of this project, which is part of a total 1.2 million sq ft development.
In June, the company also launched another residential building Royal Ivy with saleable area of 125,000 sq ft at The Great Eastern Gardens in Kanjurmarg suburb of Mumbai.
The company also highlighted that at Mahindra World City Chennai, the total number of customers as of June end were at 58, of which 37 are operational, and Holiday Inn Express is set to operate a Business Hotel here soon.
On Thursday, shares of Mahindra Lifespace Developers closed at Rs 373.90 on the National Stock Exchange, down 0.03% from Wednesday's close.
Mahindra Lifespace Q1 net profit at Rs170.9mn
The PAT for the quarter is at Rs. 170.9mn, registering an increase of 18% compared toRs. 14.48 crores in Q1 F-11. | |
Iconic gold market may head north
MUMBAI: The iconic gold market, Zaveri Bazar, which has been targeted by terrorists three times to date, could move out of its current location in southMumbai to the suburbs. In the aftermath of the 13/7 serial blasts, traders and market associations are scouting for around 2-3 sq km plots of land near the domestic airport at Santa Cruz. The aim, they said, is to set up a new gold hub, which will house shops, offices and artisans that are currently operating out of the congested and terror-prone streets of Zaveri Bazar.
Prithviraj Kothari, president of the Bombay Bullion Association (BBA), said: "We don't want to shift the bullion market in isolation. We are looking for a new place where we can also relocate other allied activities that are an integral part of our business. Besides providing space for bullion traders and wholesalers, there should also be room for artisans, retailers, jewellers, banks, dealers in precious stones and also people from other trades that are peripheral to the bullion business."
The BBA is in talks with other members and associations associated with the gold market; this includes the wholesale and retail jewellers' associations, Bengali karigars' association among other players in the industry. "We are still discussing this option. Once we have zeroed in on the land, we will approach the state government," said Kothari.
It's worth noting that the state government had made arrangements to shift diamond traders out of Opera House to the more secure Bandra Kurla Complex (BKC). But many diamond traders have been resisting the move citing that BKC's real estate rates are unaffordable and not profit-friendly. Having observed the problems with shifting the diamond market out of Opera House, gold traders at Zaveri Bazar said they will come up with a plan that is affordable to everyone, including the average trader. "Whatever plan we choose, we will make sure that it is financially viable," said Kanaya Kakad, a member of local traders' association at Zaveri Bazar.
Like their counterparts at Opera House, gold traders at Zaveri Bazar will beefing up their own security network, which is run by BAA and other trade associations. As of now, the security system has 32 CCTV cameras. In a meeting last week, members decided to double the number of cameras and metal detectors at the market's three entry points.
Prithviraj Kothari, president of the Bombay Bullion Association (BBA), said: "We don't want to shift the bullion market in isolation. We are looking for a new place where we can also relocate other allied activities that are an integral part of our business. Besides providing space for bullion traders and wholesalers, there should also be room for artisans, retailers, jewellers, banks, dealers in precious stones and also people from other trades that are peripheral to the bullion business."
The BBA is in talks with other members and associations associated with the gold market; this includes the wholesale and retail jewellers' associations, Bengali karigars' association among other players in the industry. "We are still discussing this option. Once we have zeroed in on the land, we will approach the state government," said Kothari.
It's worth noting that the state government had made arrangements to shift diamond traders out of Opera House to the more secure Bandra Kurla Complex (BKC). But many diamond traders have been resisting the move citing that BKC's real estate rates are unaffordable and not profit-friendly. Having observed the problems with shifting the diamond market out of Opera House, gold traders at Zaveri Bazar said they will come up with a plan that is affordable to everyone, including the average trader. "Whatever plan we choose, we will make sure that it is financially viable," said Kanaya Kakad, a member of local traders' association at Zaveri Bazar.
Like their counterparts at Opera House, gold traders at Zaveri Bazar will beefing up their own security network, which is run by BAA and other trade associations. As of now, the security system has 32 CCTV cameras. In a meeting last week, members decided to double the number of cameras and metal detectors at the market's three entry points.
Govt allows Parsvanath to pull ouf of 6 SEZ projects
he Board of Approvals for Special Economic Zones has given real estate major, Parsvanath group, the go-ahead to pull out of six SEZ projects.
Parsvnath had got in-principle approval for leather and handicrafts SEZs at Agra and Moradabad, respectively, a gems and jewellery tax-free zone in Jaipur, a food processing SEZ in Sonepat, an auto component zone in Pune and a multi-product SEZ in Kanceepuram.
The draft DTC has proposed withdrawal of exemptions for new units that come up after the tax code is implemented and replacement of tax exemption on profits for developers with sops on investments.
The DTC is expected to implemented from the next fiscal.
The industry has also expressed concern over the imposition of Minimum Alternate Tax (MAT) of 18.5% on the book profits of SEZ developers and units.
Under the SEZ Act, SEZ units get 100% tax exemption on profits earned for the first five years, a 50% exemption for the next five years and another 50% exemption on re-invested profits in the following five years.
SEZ developers, on the other hand, get 100% tax exemption on profits for ten years, which they can choose in the block of the first fifteen years.
Five developers have approached the BoA to de-notify their tax-free enclaves.
In addition, as many as 45 SEZ developers, including Raheja SEZ, Navi Mumbai and GP Realtors, have sought more time to execute their projects.
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