The Centre has asked IDFC Projects Ltd, a part of IDFC Ltd, to prepare the concept paper for the proposed Chennai-Bangalore-Mumbai industrial corridor. This follows requests from the southern States for the industrial corridor, on the lines of the Delhi-Mumbai Industrial Corridor Project.
The Delhi-Mumbai Industrial Corridor, which is being developed with Japanese technological and financial cooperation, aims at doubling employment potential, tripling industrial output and quadrupling exports from the region in the first five years.
The Centre has incorporated the Delhi Mumbai Industrial Corridor Development Corporation as the nodal agency for building the 1,483-km-long industrial corridor.
The Centre will hold a 49 per cent stake, with the balance being held by financial institutions — IL&FS, IDFC, IIFC — and the six State governments through which the proposed corridor will pass through.
Work on the corridor will be done in two phases, with the first phase likely to be completed during 2008-12 and the second phase from 2012 to 2016.
The project envisages setting up in the first phase, one investment region spread over 200 sq km and an industrial area of a smaller size in each State, barring Delhi.
Tuesday, December 30, 2008
Only 36 new malls out of 75 got operational in 2008
According to real estate consultant firm Cushman & Wakefield, in the top eight cities, about 20 million sq ft mall area was to developed in 2008. But these cities -- Mumbai, Delhi, Kolkata, Chennai, Ahmedabad, Bangalore, Hyderabad and Pune -- saw only about 9.5 million sq ft become operational. Basically, out of the proposed 75 mall projects that were to come up in these cities, only 36 saw the light of the day.
Further, the National Captial Region and Mumbai were the top two cities that witnessed the highest decline in retail absorption. For instance, NCR was to see development of about seven million sq ft space but only four million sq ft came up.
Industry analysts say that in Mumbai some malls were being converted into offices. Hyderabad, Kolkata, Chennai and Pune also witnessed significant decline in the retail absorption in the malls.
Rajneesh Mahajan, director of retail services, India at Cushman & Wakefield said, “Many malls that were to open in 2009 may not come up at all. From the projected supply of 20 million sq ft space in 2008, we might see a spill over of about one million sq ft development in 2009. Lack of funds leading to construction delays and rack rate lease rentals, wherein whoever pays more gets the space has resulted in slow absorption of retail space in malls.”
Mahajan added that some retailers over projected their revenues from their outlets in the malls, therefore, adopting a cautious approach to expansion in malls.
Further, the National Captial Region and Mumbai were the top two cities that witnessed the highest decline in retail absorption. For instance, NCR was to see development of about seven million sq ft space but only four million sq ft came up.
Industry analysts say that in Mumbai some malls were being converted into offices. Hyderabad, Kolkata, Chennai and Pune also witnessed significant decline in the retail absorption in the malls.
Rajneesh Mahajan, director of retail services, India at Cushman & Wakefield said, “Many malls that were to open in 2009 may not come up at all. From the projected supply of 20 million sq ft space in 2008, we might see a spill over of about one million sq ft development in 2009. Lack of funds leading to construction delays and rack rate lease rentals, wherein whoever pays more gets the space has resulted in slow absorption of retail space in malls.”
Mahajan added that some retailers over projected their revenues from their outlets in the malls, therefore, adopting a cautious approach to expansion in malls.
Investment Square presents buyback offer on property purchase
Investment Square, the real estate expert advisory wing of Disha Direct Marketing Services, has unveiled a first-of-its-kind real estate investment opportunity in the form of two extremely high-potential projects: Windmill Heights at New Mahabhaleshwar and ColorScape at Kasgaon. The projects, located at two relatively-unexplored yet highly promising destinations New Mahabaleshwar near Satara and Kasgaon near Shahapur (77km from Mumbai) in Maharashtra, offer property buyers an assured 50 per cent appreciation in value in 24 months.
A Shyamsunder, CEO, Investment Square said, "This scheme will enable investors to reap high returns in future if they opt to retain the plot and at the same time guarantees a minimum return to those who opt for a buyback of the plot."
A minimum investment of Rs 3 lakh is required to book this attractive investment. All investments will be secured by a Memorandum of Understanding (MoU) on a stamp paper acknowledging the investment and duly allotting the area of land against the amount paid by the buyer. The investor would be offered a guarantee of appreciation on the stamp paper on the expiry of the duration of 24-months scheme. The company is also offering the investor post dated cheques of the amount payable on maturity.
The New Mahabaleshwar project offers plots of around 10,000 sq ft at Rs 30 per sq ft., while the plots at Shahapur measuring 3,000 sq ft each are being offered at a price of Rs 100 per sq ft.
A Shyamsunder, CEO, Investment Square said, "This scheme will enable investors to reap high returns in future if they opt to retain the plot and at the same time guarantees a minimum return to those who opt for a buyback of the plot."
A minimum investment of Rs 3 lakh is required to book this attractive investment. All investments will be secured by a Memorandum of Understanding (MoU) on a stamp paper acknowledging the investment and duly allotting the area of land against the amount paid by the buyer. The investor would be offered a guarantee of appreciation on the stamp paper on the expiry of the duration of 24-months scheme. The company is also offering the investor post dated cheques of the amount payable on maturity.
The New Mahabaleshwar project offers plots of around 10,000 sq ft at Rs 30 per sq ft., while the plots at Shahapur measuring 3,000 sq ft each are being offered at a price of Rs 100 per sq ft.
Structural stability audit for Mumbai's 40,000 buildings
The structural audit of buildings more than 30 years old will soon be a must in Maharashtra. The state legislature has passed a Bill to amend the municipal laws, making it obligatory for every owner or occupier of a building more than 30 years old to submit a structural stability certificate to guarantee that such structures are fit for human habitation.
There are around 2.5 lakh buildings in Mumbai, of which 40,000 are mostly in the island city, which are more than 30 years old. The Bill seeks amendment to the Mumbai Municipal Corporation Act, the Bombay Provincial Municipal Corporation Act, 1949, the City of Nagpur Municipal Corporation Act, 1948, and the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Township Act, 1965.
The Bill, which has been passed by both the houses of the legislature, follows the state government’s assurance to avoid recurrence of incidents like the Laxmi Chhaya building collapse in July last year in Borivli that left 20 people dead. One wing of the building had collapsed after one of the columns was tampered with during the renovation of a jewellery shop on the ground floor.
The Bill, which will now be sent to the governor for clearance, makes it expedient on the owners or occupiers of buildings over 30 years old to have the structures examined by a structural engineer registered with the municipal corporation or council. The structural engineer will certify if the building is fit for human habitation.
The owners will have to submit the structural stability certificate to the respective civic body -- corporation or council -- within a year when a building turns 30 years old and after every 10 years thereafter.
The civic chief may determine the condition of the building and recommend, on the basis of the structural engineer’s observations, corrective repairs. The owners would be liable for a fine if they fail to act on the recommendations of the structural engineer within six months of his report.
There are around 2.5 lakh buildings in Mumbai, of which 40,000 are mostly in the island city, which are more than 30 years old. The Bill seeks amendment to the Mumbai Municipal Corporation Act, the Bombay Provincial Municipal Corporation Act, 1949, the City of Nagpur Municipal Corporation Act, 1948, and the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Township Act, 1965.
The Bill, which has been passed by both the houses of the legislature, follows the state government’s assurance to avoid recurrence of incidents like the Laxmi Chhaya building collapse in July last year in Borivli that left 20 people dead. One wing of the building had collapsed after one of the columns was tampered with during the renovation of a jewellery shop on the ground floor.
The Bill, which will now be sent to the governor for clearance, makes it expedient on the owners or occupiers of buildings over 30 years old to have the structures examined by a structural engineer registered with the municipal corporation or council. The structural engineer will certify if the building is fit for human habitation.
The owners will have to submit the structural stability certificate to the respective civic body -- corporation or council -- within a year when a building turns 30 years old and after every 10 years thereafter.
The civic chief may determine the condition of the building and recommend, on the basis of the structural engineer’s observations, corrective repairs. The owners would be liable for a fine if they fail to act on the recommendations of the structural engineer within six months of his report.
Titling Law to prevent fraud in real estate sector
The system of registration of properties will be replaced by a titling system to reduce frauds. Earlier this year, the Delhi Government had hired a legal firm to draft the Bill. Consultation on it will soon be taken up along with various stakeholders like the real estate companies.
The move, officials feel, is the need of the hour to prevent rampant fraud in the real estate sector. '' In the city one property sometimes gets registered under different names even 17-18 times. The Titling Law will put an end to that,'' said an official.
As of now there is no central system of maintaining records of property ownership because of multiplicity of authorities. The proposed Central Authority under the draft Bill will maintain complete records of all properties and scrutinise the details provided to identify the real owner. These will also be digitised. This will prevent fraudulent claims on ownership of a property as the records will be available for courts to take decisions. Registration of agricultural land, however, will be out of its purview.
The Authority will also function as a Tribunal to look at disputes and an appellate Tribunal too. All data collected by the Titling Auhtority staff will be digitised and Title status of properties registered with it will be put up on a central website for all to see.
''The draft is ready. It will be send to the minister for approval and taken up for discussion with stakeholders like real estate firms. It will then go to the cabinet - which may take about six months' time - and then to the Centre for clearance. Only after all this will the Bill come back to the state and move towards being cleared in the Delhi Assembly to be enacted as the law,” according to the official.
“The USA, UK, European nations, Hong Kong, Singapore and many other countries have Titling laws, so why not us?,” the official asserted.
The move, officials feel, is the need of the hour to prevent rampant fraud in the real estate sector. '' In the city one property sometimes gets registered under different names even 17-18 times. The Titling Law will put an end to that,'' said an official.
As of now there is no central system of maintaining records of property ownership because of multiplicity of authorities. The proposed Central Authority under the draft Bill will maintain complete records of all properties and scrutinise the details provided to identify the real owner. These will also be digitised. This will prevent fraudulent claims on ownership of a property as the records will be available for courts to take decisions. Registration of agricultural land, however, will be out of its purview.
The Authority will also function as a Tribunal to look at disputes and an appellate Tribunal too. All data collected by the Titling Auhtority staff will be digitised and Title status of properties registered with it will be put up on a central website for all to see.
''The draft is ready. It will be send to the minister for approval and taken up for discussion with stakeholders like real estate firms. It will then go to the cabinet - which may take about six months' time - and then to the Centre for clearance. Only after all this will the Bill come back to the state and move towards being cleared in the Delhi Assembly to be enacted as the law,” according to the official.
“The USA, UK, European nations, Hong Kong, Singapore and many other countries have Titling laws, so why not us?,” the official asserted.
Unitech's share rises
Shares of Unitech rose by 5.12 per cent to close at Rs 37.95, after the company announced that its telecom subsidiaries have received 4.4 MHz of spectrum in the 1,800 MHz GSM bandwidth in four service areas: Assam, Rajasthan, North East and Jammu & Kashmir.
With this, the company has been allotted spectrum in 20 of the total 22 service areas in the country. The stock made an intraday high of 38.55 and a low of Rs 33.9 with trading volumes of around 2.73 crore shares. The stock gained around 65 per cent in the past one month.
With this, the company has been allotted spectrum in 20 of the total 22 service areas in the country. The stock made an intraday high of 38.55 and a low of Rs 33.9 with trading volumes of around 2.73 crore shares. The stock gained around 65 per cent in the past one month.
Real estate companies increased borrowings through issuances of commercial papers
Indian real estate companies have stepped up borrowings through issuances of commercial papers (CPs) after the country’s central bank injected liquidity by cutting cash reserve ratio and as banks continue to shy away from extending loans.
Cash-strapped real estate firms are resorting to short-term borrowings of funds to complete ongoing projects as the economic slowdown has virtually halted demand for properties, freezing cash flows.
Issuances of CPs by companies including real estate developers have jumped 66 per cent in the fortnight ended November 30 compared to the previous fortnight, data released by the Reserve Bank of India (RBI) showed. Borrowings through the short-term instrument jumped to Rs 3,430 crore from Rs 2,065 crore in the period.
“Real estate companies have stepped up issuances of CPs even as banks are reluctant to extend loans. Few manufacturing companies have tapped the CP market,” a State Bank of India official said.
Real estate companies are borrowing through CPs as they are able to raise funds at cheaper rates compared to bank loans. The public sector banks are lending to their best customers at an average rate of 12.5-13.5 per cent, while non state-run banks lend at rates as high as 17.25 per cent.
Comparatively, real estate companies can raise funds through issuances of CPs at as low a rate as 9 per cent.
The revival of the issuances of CPs comes nearly two months after overnight rate spiralled as high as 22 per cent owing to the acute liquidity crunch. Mutual funds, among the biggest investors in the money market, or short-term instruments, were flooded with redemptions making it difficult for companies to raise funds through issuances of CPs.
Indian companies raised as much as Rs 6,283 crore in the fortnight ended April 15, 2008 through issuances of CPs at a time where interest rates ranged between 7.74 and 10.25 per cent, RBI data showed.
In the last month, mutual funds, after having regained investors’ confidence, stepped up their investments in CPs and other money-market instruments, a treasury official with small private bank said.
Reflecting the sentiments and return of liquidity, banks have also stepped up their investments in CPs and other money-market instruments. Bank investments in CPs have risen 84 per cent in the fortnight ended December 5, 2008 to November Rs 16,275 compared with Rs 15,680 on November 21, the central bank showed.
Banks park their surplus funds with the central bank at a rate of 5.5 per cent while investments in CPs offer them a return of more than 9 per cent, RBI data showed.
Cash-strapped real estate firms are resorting to short-term borrowings of funds to complete ongoing projects as the economic slowdown has virtually halted demand for properties, freezing cash flows.
Issuances of CPs by companies including real estate developers have jumped 66 per cent in the fortnight ended November 30 compared to the previous fortnight, data released by the Reserve Bank of India (RBI) showed. Borrowings through the short-term instrument jumped to Rs 3,430 crore from Rs 2,065 crore in the period.
“Real estate companies have stepped up issuances of CPs even as banks are reluctant to extend loans. Few manufacturing companies have tapped the CP market,” a State Bank of India official said.
Real estate companies are borrowing through CPs as they are able to raise funds at cheaper rates compared to bank loans. The public sector banks are lending to their best customers at an average rate of 12.5-13.5 per cent, while non state-run banks lend at rates as high as 17.25 per cent.
Comparatively, real estate companies can raise funds through issuances of CPs at as low a rate as 9 per cent.
The revival of the issuances of CPs comes nearly two months after overnight rate spiralled as high as 22 per cent owing to the acute liquidity crunch. Mutual funds, among the biggest investors in the money market, or short-term instruments, were flooded with redemptions making it difficult for companies to raise funds through issuances of CPs.
Indian companies raised as much as Rs 6,283 crore in the fortnight ended April 15, 2008 through issuances of CPs at a time where interest rates ranged between 7.74 and 10.25 per cent, RBI data showed.
In the last month, mutual funds, after having regained investors’ confidence, stepped up their investments in CPs and other money-market instruments, a treasury official with small private bank said.
Reflecting the sentiments and return of liquidity, banks have also stepped up their investments in CPs and other money-market instruments. Bank investments in CPs have risen 84 per cent in the fortnight ended December 5, 2008 to November Rs 16,275 compared with Rs 15,680 on November 21, the central bank showed.
Banks park their surplus funds with the central bank at a rate of 5.5 per cent while investments in CPs offer them a return of more than 9 per cent, RBI data showed.
Stimulus package soon
Prime minister Manmohan Singh today held consultations with Reserve Bank of India governor D Subbarao amid expectations that the government would shortly announce its second stimulus package to prop up the economy hit by the global slowdown.
The central bank is likely to complement the fiscal package by announcing further cuts in its key interest rates like repo (the rate at which it lends to banks) and reverse repo (the rate at which it borrows) by up to one percentage point to further bring down interest rates. Other monetary measures could include refinance support to banks to lend to infrastructure projects held up due to non-availability of long-term finance.
Singh, who also holds the charge of the finance ministry, is understood to have discussed specific proposals in the package that are expected to be announced in a few days, sources said.
Meanwhile, Planning Commission deputy chairman Montek Singh Ahluwalia told reporters that stimulus package would be announced within a few days, adding the strategy was to prepare a plan that could be implemented even during the next fiscal.
The government is likely to announce further fiscal incentives for labour-intensive sectors like textiles. A proposal to give a higher tax exemption on home loans is also being considered. Currently, up to Rs 1.5 lakh rebate is annually given for interest and principal payment towards home loans availed by taxpayers.
The government has already announced a 4 per cent cut in excise duty across-the-board and raised the public expenditure by Rs 20,000 crore in the first stimulus package announced early this month to counter the impact of the global meltdown.
The Reserve Bank on its part had injected around Rs 3 lakh crore liquidity into the system through a series of cuts in key policy rates and other measures in the last two months. Taking cues from the RBI, several banks have lowered their lending rates.
Reeling under the global slowdown, India’s industrial growth declined 0.4 per cent in October for the first time in 15 years.
The central bank is likely to complement the fiscal package by announcing further cuts in its key interest rates like repo (the rate at which it lends to banks) and reverse repo (the rate at which it borrows) by up to one percentage point to further bring down interest rates. Other monetary measures could include refinance support to banks to lend to infrastructure projects held up due to non-availability of long-term finance.
Singh, who also holds the charge of the finance ministry, is understood to have discussed specific proposals in the package that are expected to be announced in a few days, sources said.
Meanwhile, Planning Commission deputy chairman Montek Singh Ahluwalia told reporters that stimulus package would be announced within a few days, adding the strategy was to prepare a plan that could be implemented even during the next fiscal.
The government is likely to announce further fiscal incentives for labour-intensive sectors like textiles. A proposal to give a higher tax exemption on home loans is also being considered. Currently, up to Rs 1.5 lakh rebate is annually given for interest and principal payment towards home loans availed by taxpayers.
The government has already announced a 4 per cent cut in excise duty across-the-board and raised the public expenditure by Rs 20,000 crore in the first stimulus package announced early this month to counter the impact of the global meltdown.
The Reserve Bank on its part had injected around Rs 3 lakh crore liquidity into the system through a series of cuts in key policy rates and other measures in the last two months. Taking cues from the RBI, several banks have lowered their lending rates.
Reeling under the global slowdown, India’s industrial growth declined 0.4 per cent in October for the first time in 15 years.
IDBI Home Finance for sale
IDBI Bank has put its wholly-owned housing finance subsidiary IDBI Home Finance for sale five years after it purchased it from the Tatas, a leading financial daily reported.
While discussions with potential buyers have not reached a final stage, an unnamed person familiar with the development was quoted in the report as saying, financial services companies such as Tata Capital, Edelweiss, Religare Enterprises along with two private equity investors have evinced an interest in the housing finance company.
IDBI is looking to sell its subsidiary as the parent company itself is involved in the mortgage lending business and it feels that the present situation of two companies doing the same business was leading to unnecessary duplication, the report said.
According to the source quoted in the report, IDBI Bank is looking for a selling price of around Rs 170-200 crore, IDBI Homefinance’s home loan portfolio as on March 31 2008 was Rs 2,710 crore, up Rs 563 crore from a year earlier.
The company, which has 18 branches across major cities, had reported a net profit of Rs 30 crore for 2007-08.
While discussions with potential buyers have not reached a final stage, an unnamed person familiar with the development was quoted in the report as saying, financial services companies such as Tata Capital, Edelweiss, Religare Enterprises along with two private equity investors have evinced an interest in the housing finance company.
IDBI is looking to sell its subsidiary as the parent company itself is involved in the mortgage lending business and it feels that the present situation of two companies doing the same business was leading to unnecessary duplication, the report said.
According to the source quoted in the report, IDBI Bank is looking for a selling price of around Rs 170-200 crore, IDBI Homefinance’s home loan portfolio as on March 31 2008 was Rs 2,710 crore, up Rs 563 crore from a year earlier.
The company, which has 18 branches across major cities, had reported a net profit of Rs 30 crore for 2007-08.
Unitech intned to meet on January 19
Real estate major Unitech said its shareholders will meet on January 19 to consider raising of Rs 5,000 crore through issue of securities in both domestic and international markets.
The shareholders would also consider increasing the authorised share capital of the company to Rs 1,000 crore from the current Rs 500 crore, the company said in a filing to the Bombay Stock Exchange.
Last week, the Unitech board had approved the raising of Rs 5,000 crore or equivalent amounts in other currencies, through issuance of further securities.
Meanwhile, the company said it has received start-up spectrum in four more service areas, taking the total to 20. The allotment has been made for Assam, Rajasthan, North East and Jammu & Kashmir service areas, Unitech said in a filing to the Bombay Stock Exchange.
Now, of the total 22 services areas in the country, the realty major has received spectrum in 20 circles to start its services.
The company had earlier announced its plans to sell a 60 per cent stake in the telecom business to Norway’s telecom major Telenor for Rs 6,120 crore.
The shareholders would also consider increasing the authorised share capital of the company to Rs 1,000 crore from the current Rs 500 crore, the company said in a filing to the Bombay Stock Exchange.
Last week, the Unitech board had approved the raising of Rs 5,000 crore or equivalent amounts in other currencies, through issuance of further securities.
Meanwhile, the company said it has received start-up spectrum in four more service areas, taking the total to 20. The allotment has been made for Assam, Rajasthan, North East and Jammu & Kashmir service areas, Unitech said in a filing to the Bombay Stock Exchange.
Now, of the total 22 services areas in the country, the realty major has received spectrum in 20 circles to start its services.
The company had earlier announced its plans to sell a 60 per cent stake in the telecom business to Norway’s telecom major Telenor for Rs 6,120 crore.
Puravankara going to launch first affordable housing project in Bangalore
Provident Housing and Infrastructure Ltd, a wholly owned subsidiary of the Bangalore-based Puravankara Group, is set to unveil its first affordable housing project in Bangalore.
“We are set to launch our first affordable housing project in Bangalore in January 2009. Initially, we are targeting Bangalore where we will be launching three new projects. Then we are looking at Chennai, Coimbatore and Cochin,” said Ashish Puravankara, director, Puravankara Group. Puravankara already has 105 acres in Bangalore which it would use for the project.
Earlier, in August 2008, the company has earmarked an investment of Rs 8,000 crore to set up affordable homes through its wholly owned subsidiary Provident Housing and Infrastructure Ltd. The funds for these projects will mainly be generated through private equity, the company had said. Meanwhile, it is also looking at internal accruals and customer advances.
The prices of Provident Homes, which are to be developed in a phased manner, are presently priced at Rs 10 lakh, Rs 15 lakh and Rs 20 lakh comprising one, two and three bedroom homes respectively.
Under phase I, Puravankara will cover Bangalore, Chennai, Hyderabad, Coimbatore and Mysore, while in phase II, it will go to cities such as Delhi, Kolkata, Kochi, Jaipur, Pune and Nagpur.
“Major expansion will be seen in our Provident Housing where we will really give a big push in the next couple of years,” Puravankara added.
“We are set to launch our first affordable housing project in Bangalore in January 2009. Initially, we are targeting Bangalore where we will be launching three new projects. Then we are looking at Chennai, Coimbatore and Cochin,” said Ashish Puravankara, director, Puravankara Group. Puravankara already has 105 acres in Bangalore which it would use for the project.
Earlier, in August 2008, the company has earmarked an investment of Rs 8,000 crore to set up affordable homes through its wholly owned subsidiary Provident Housing and Infrastructure Ltd. The funds for these projects will mainly be generated through private equity, the company had said. Meanwhile, it is also looking at internal accruals and customer advances.
The prices of Provident Homes, which are to be developed in a phased manner, are presently priced at Rs 10 lakh, Rs 15 lakh and Rs 20 lakh comprising one, two and three bedroom homes respectively.
Under phase I, Puravankara will cover Bangalore, Chennai, Hyderabad, Coimbatore and Mysore, while in phase II, it will go to cities such as Delhi, Kolkata, Kochi, Jaipur, Pune and Nagpur.
“Major expansion will be seen in our Provident Housing where we will really give a big push in the next couple of years,” Puravankara added.
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