In a bid to restore confidence in its dented property market, property developers in Dubai are urging the government to re-consider its visa policy for foreigners.
“The market is in bad shape and needs to be rescued. Buying and selling has nearly stopped. Even although prices are coming down investors are not buying,” said Kabir Mulchandani, chairman, Dynasty Zarooni.
Although the real estate sector has allowed freehold ownership of property since 2002, it suspended the issuing of residence visas to property owners earlier this year and if this decision was reversed it could encourage more buyers, it is claimed.
The developers want a return to the commitment given in 2002 to facilitate three-year renewable residence visas to expatriate property owners, to encourage foreign investment.
“The government should stand firm on its commitment to issue visas for freehold properties, both residential and commercial. They should alleviate people's fears and apprehensions by positively reinforcing the freehold visas rule,” said Syed Mohammad Ali, chief executive of Fortune Group.
”The confusion on this issue has negatively impacted the Dubai realty sector. A constant communication regarding the visas structures should be given to the public,” Ali added.
Tarek Ramadan, chairman of Tharaa Holding, said the government needs to rescue the real estate market. “It should re-introduce the property visa,” Ramadan said.
Ramadan also called for emergency funds to stop prices plummeting, for more liquidity and flexibility in payment across the value chain to give the real estate community some breathing time.
Wednesday, December 31, 2008
Emirates Gardens development on schedule
Dubai-based Damac Properties has announced the completion of the main structure of its Emirates Gardens development.
Emirates Garden (phase one) is the company's first project in Jumeirah Village and comprises three separate buildings each of four storeys. The contracting company Intermass has completed the structure as well as the MEP and finishes for each of the complexes.
Work has already commenced on plastering, tiling and wiring. In addition, work to install elevators has also begun.
Peter Riddoch, CEO of Damac Properties, said: "This will be our first project to be completed in Jumeirah Village so to see the completion of the structures in the first phase is a significant milestone for us. We are also making good progress on the second phase of Emirates Gardens with our other three buildings all at, or past, the third floor. We are working closely with our contractors on site to ensure that this positive progress continues on site."
The three buildings in the first phase (named Gardenia, Lavender and Rose) are due for completion in third quarter of 2009 with the second phase due to follow shortly afterwards. The developer has a number of projects under construction at Jumeirah Village including the recently launched Green Park development and Tuscan Residence.
Emirates Garden (phase one) is the company's first project in Jumeirah Village and comprises three separate buildings each of four storeys. The contracting company Intermass has completed the structure as well as the MEP and finishes for each of the complexes.
Work has already commenced on plastering, tiling and wiring. In addition, work to install elevators has also begun.
Peter Riddoch, CEO of Damac Properties, said: "This will be our first project to be completed in Jumeirah Village so to see the completion of the structures in the first phase is a significant milestone for us. We are also making good progress on the second phase of Emirates Gardens with our other three buildings all at, or past, the third floor. We are working closely with our contractors on site to ensure that this positive progress continues on site."
The three buildings in the first phase (named Gardenia, Lavender and Rose) are due for completion in third quarter of 2009 with the second phase due to follow shortly afterwards. The developer has a number of projects under construction at Jumeirah Village including the recently launched Green Park development and Tuscan Residence.
Sold 70% of Ajman Uptown project : Sweet Homes
Sweet Homes, a UAE-based developer, has announced that it has sold out 70 per cent of its DH3 billion ($545 million) Ajman Uptown project, despite a 40 per cent hike in property prices in Ajman in 2008.
The announcement follows a GCC-wide roadshow organised by the company and is in line with the developer's two billion dirham investment plan for 2008.
Company chiefs said the strong sales reflected the vibrancy of Ajman’s real estate industry and the appeal of Ajman Uptown, which comprises of seven commercial and residential towers, a hotel and hotel apartments complex, and villas and townhouses.
Reports also indicate that investments into Ajman’s property sector have crossed the DH400 billion mark this year.
While other parts of the UAE suffers, Ajman is experiencing a property boom due to its investor-friendly property laws and reasonable project rates, with the emirate having attracted significant foreign direct investment (FDI), which has exceeded the rest of the other emirates by 300 per cent.
“As the third largest property market in the UAE, Ajman is strategically positioned to attract more foreign investments into the real estate sector, with over 33 per cent of development projects in the area owned by expatriates, as compared to 11 per cent in other emirates," said Fahad Sattar Dero, CEO, Sweet Homes Group.
With offices in the UAE, Oman and Qatar, Sweet Homes continues to undertake regional awareness campaigns and participate in high profile promotional activities, such as its ongoing participation as a major sponsor for the Doha Shopping Festival.
Scheduled for completion by 2010, Ajman Uptown will also feature a school, a healthcare centre, a fire fighting station, several mosques, a health and recreation club, a swimming pool, markets, shopping mall, hotel & hotel apartments, and convenient and spacious parks.
The announcement follows a GCC-wide roadshow organised by the company and is in line with the developer's two billion dirham investment plan for 2008.
Company chiefs said the strong sales reflected the vibrancy of Ajman’s real estate industry and the appeal of Ajman Uptown, which comprises of seven commercial and residential towers, a hotel and hotel apartments complex, and villas and townhouses.
Reports also indicate that investments into Ajman’s property sector have crossed the DH400 billion mark this year.
While other parts of the UAE suffers, Ajman is experiencing a property boom due to its investor-friendly property laws and reasonable project rates, with the emirate having attracted significant foreign direct investment (FDI), which has exceeded the rest of the other emirates by 300 per cent.
“As the third largest property market in the UAE, Ajman is strategically positioned to attract more foreign investments into the real estate sector, with over 33 per cent of development projects in the area owned by expatriates, as compared to 11 per cent in other emirates," said Fahad Sattar Dero, CEO, Sweet Homes Group.
With offices in the UAE, Oman and Qatar, Sweet Homes continues to undertake regional awareness campaigns and participate in high profile promotional activities, such as its ongoing participation as a major sponsor for the Doha Shopping Festival.
Scheduled for completion by 2010, Ajman Uptown will also feature a school, a healthcare centre, a fire fighting station, several mosques, a health and recreation club, a swimming pool, markets, shopping mall, hotel & hotel apartments, and convenient and spacious parks.
Oversupply in commercial real estate likely to continue in 2009: Cushman & Wakefield
The over-supply scenario that 2008 had witnessed in the commercial real estate space could well continue in 2009, says the annual year-end report by Cushman & Wakefield, real estate services firm.
While some companies, which had committed to larger spaces earlier, have scaled down their absorption as a prudent step to mitigate the cost on real estate others, which had taken up space based on anticipated expansion plans, are considering sub-leasing the excess space.
“With this trend continuing in the coming year, coupled with the additional proposed supply and the already existing increasing vacancy levels, the over supply situation is likely to see no early respite. Hence, rental corrections across micro-markets seem probable over the short term,” said Kaustuv Roy, director (tenant strategies and solutions), Cushman & Wakefield.
The south, central and select suburban locations of Mumbai witnessed rental correction over the year and more recently, Thane Belapur Road (IT) and Malad (non-IT) too recorded a southward movement. Vashi and the non IT-projects in Thane Belapur Road recorded a stable trend. Central and suburban locations of Lower Parel, Bandra-Kurla, Andheri and Powai are likely to witness a further fall in rentals with all other major markets expected to stabilise.
In Bangalore, the rental market continued to strengthen recording 4-9 per cent annual appreciation in the peripheral locations and nearly 18 per cent year-on-year growth in the CBD and off-CBD regions. Outer Ring Road and the suburban areas are likely to strengthen further in the coming months, whereas ITPB, Whitefield and Electronics City are expected to stabilise, the report said.
Chennai witnessed a drop of 5-10 per cent in rentals in the in the CBD and off-CBD locations of T. Nagar, Alwarpet, Anna Salai and Radhakrishnan Salai, while the suburban and peripheral regions witnessed a 7-9 per cent drop.
Rajiv Gandhi Salai in the peripheries is the only market in the city that has begun to show signs of stabilisation and is likely to continue with the trend as all other major micro markets are anticipated to record a further fall in rentals, the report added.
In Hyderabad, the CBD, off-CBD regions such as Banjara Hills, Begumpet, Raj Bhavan Road, SP Road and the peripheral regions of Pocharam and Shamshabad recorded a 6-19 per cent annual appreciation in rentals, while the suburban regions of Madhapur, Gachibowli-Nanakramguda, Manikonda and Raidurga witnessed a 5 per cent fall. Banjara Hills, Jubilee Hills, Bachupally and Uppal have also recorded a fall in rental values.
Rentals in the National Capital Region dropped between 1 and 13 per cent from last year across micro markets, with Noida (IT SEZ) recording about 32 per cent annual depreciation. Over the last quarter, rentals recorded 6-16 per cent dip with the likelihood of a further correction in the months to come.
Though rentals in Pune seem to have appreciated over the last year, the last two quarters recorded a 4-10 per cent dip across locations with the exception of Sholapur Road and Hinjewadi in the peripheries that remained stable and are expected to continue remaining so. All other major micro markets in the city are likely to witness a fall in rentals over the short term.
While some companies, which had committed to larger spaces earlier, have scaled down their absorption as a prudent step to mitigate the cost on real estate others, which had taken up space based on anticipated expansion plans, are considering sub-leasing the excess space.
“With this trend continuing in the coming year, coupled with the additional proposed supply and the already existing increasing vacancy levels, the over supply situation is likely to see no early respite. Hence, rental corrections across micro-markets seem probable over the short term,” said Kaustuv Roy, director (tenant strategies and solutions), Cushman & Wakefield.
The south, central and select suburban locations of Mumbai witnessed rental correction over the year and more recently, Thane Belapur Road (IT) and Malad (non-IT) too recorded a southward movement. Vashi and the non IT-projects in Thane Belapur Road recorded a stable trend. Central and suburban locations of Lower Parel, Bandra-Kurla, Andheri and Powai are likely to witness a further fall in rentals with all other major markets expected to stabilise.
In Bangalore, the rental market continued to strengthen recording 4-9 per cent annual appreciation in the peripheral locations and nearly 18 per cent year-on-year growth in the CBD and off-CBD regions. Outer Ring Road and the suburban areas are likely to strengthen further in the coming months, whereas ITPB, Whitefield and Electronics City are expected to stabilise, the report said.
Chennai witnessed a drop of 5-10 per cent in rentals in the in the CBD and off-CBD locations of T. Nagar, Alwarpet, Anna Salai and Radhakrishnan Salai, while the suburban and peripheral regions witnessed a 7-9 per cent drop.
Rajiv Gandhi Salai in the peripheries is the only market in the city that has begun to show signs of stabilisation and is likely to continue with the trend as all other major micro markets are anticipated to record a further fall in rentals, the report added.
In Hyderabad, the CBD, off-CBD regions such as Banjara Hills, Begumpet, Raj Bhavan Road, SP Road and the peripheral regions of Pocharam and Shamshabad recorded a 6-19 per cent annual appreciation in rentals, while the suburban regions of Madhapur, Gachibowli-Nanakramguda, Manikonda and Raidurga witnessed a 5 per cent fall. Banjara Hills, Jubilee Hills, Bachupally and Uppal have also recorded a fall in rental values.
Rentals in the National Capital Region dropped between 1 and 13 per cent from last year across micro markets, with Noida (IT SEZ) recording about 32 per cent annual depreciation. Over the last quarter, rentals recorded 6-16 per cent dip with the likelihood of a further correction in the months to come.
Though rentals in Pune seem to have appreciated over the last year, the last two quarters recorded a 4-10 per cent dip across locations with the exception of Sholapur Road and Hinjewadi in the peripheries that remained stable and are expected to continue remaining so. All other major micro markets in the city are likely to witness a fall in rentals over the short term.
MIDC is looking for acquiring huge tracts of land for its various projects
At a time when demand for industrial land is declining due to the financial slowdown, the Maharashtra Industrial Development Corporation (MIDC) is looking for acquiring huge tracts of land for its various projects.
“We are taking the opportunity of the economic slowdown to sharpen our land acquisition policy. It will be more inclusive and pro-farmer,” an official from MIDC said.
The official admitted that there is a 50 per cent fall in enquiries for setting up new units in the state, given the global economic recession. The official said improving infrastructure like power availability, roads, effluent treatment plants were high on the priority list.
Land acquisition, however, is still going on, with the MIDC currently negotiating for 1,400 hectares at Chakan near Pune. This includes land for MIDC-Bharat Forge SEZ. Meanwhile, the payment process is on for the 600 acres of land it acquired at Jalna.
“We are taking the opportunity of the economic slowdown to sharpen our land acquisition policy. It will be more inclusive and pro-farmer,” an official from MIDC said.
The official admitted that there is a 50 per cent fall in enquiries for setting up new units in the state, given the global economic recession. The official said improving infrastructure like power availability, roads, effluent treatment plants were high on the priority list.
Land acquisition, however, is still going on, with the MIDC currently negotiating for 1,400 hectares at Chakan near Pune. This includes land for MIDC-Bharat Forge SEZ. Meanwhile, the payment process is on for the 600 acres of land it acquired at Jalna.
Real estate prices in Maharashtra may fall further
Indicative property rates, based on which Maharashtra levies its stamp duty in Mumbai and other key cities of the state, may fall marginally for the first time in about a decade as real estate transactions drop, according to sources in the revenue ministry.
The property rates in the ready reckoner for Mahrashtra may drop marginally reflecting the subdued sentiments, sources said. A final decision may be taken tomorrow.
The property ready reckoner is prepared by the office of the inspector general of registration and stamp duties (IGR) on the basis of transactions in real estate sector in respective areas.
Property prices across key cities of the state have witnessed a decline owing to an economic slowdown that has forced companies to curb expansion plans. Reflecting depressed sentiments property, transactions have also dipped as buyers anticipate a further softening of prices.
Still, the assurance given by minister of state for revenue Rana Jagjit Singh in the state legislature to maintain status quo has created a piquant situation. Pune-based Maharashtra Lawyers Association’s President M P Bendre this week filed a petition in the Bombay
High Court requesting the court to direct the state government to publish rates that reflect the market sentiments. The petition pointed out that the assurance given by Singh amounts to injustice to consumers.
The property rates in the ready reckoner for Mahrashtra may drop marginally reflecting the subdued sentiments, sources said. A final decision may be taken tomorrow.
The property ready reckoner is prepared by the office of the inspector general of registration and stamp duties (IGR) on the basis of transactions in real estate sector in respective areas.
Property prices across key cities of the state have witnessed a decline owing to an economic slowdown that has forced companies to curb expansion plans. Reflecting depressed sentiments property, transactions have also dipped as buyers anticipate a further softening of prices.
Still, the assurance given by minister of state for revenue Rana Jagjit Singh in the state legislature to maintain status quo has created a piquant situation. Pune-based Maharashtra Lawyers Association’s President M P Bendre this week filed a petition in the Bombay
High Court requesting the court to direct the state government to publish rates that reflect the market sentiments. The petition pointed out that the assurance given by Singh amounts to injustice to consumers.
SAS could be back in Bangalore
The Karnataka cabinet sub-committee has recommended re-introduction of area based property tax system similar to the SAS (Self Assessment Scheme) introduced in the year 2000 for Bangalore Mahanagara Palike (BMP) areas.
Through this revised SAS, BMP plans to collect tax from 1.5 million houses to the tune of Rs 600 crore for the year 2008-09. In 2007-08, the BMP had collected Rs 350 crore as property tax. The cabinet sub-committee, headed by R Ashok, who is also the transport and Bangalore district in-charge minister, which was constituted to implement property tax scheme for BMP areas has recommended bringing back SAS.
With this, the proposed Capital Value System, for which an Ordinance was passed during the President’s rule last year, will be put in the cold storage. There are about 650,000 houses in old areas, 550,000 in new areas and 450,000 unauthorised houses in new areas.
Through this revised SAS, BMP plans to collect tax from 1.5 million houses to the tune of Rs 600 crore for the year 2008-09. In 2007-08, the BMP had collected Rs 350 crore as property tax. The cabinet sub-committee, headed by R Ashok, who is also the transport and Bangalore district in-charge minister, which was constituted to implement property tax scheme for BMP areas has recommended bringing back SAS.
With this, the proposed Capital Value System, for which an Ordinance was passed during the President’s rule last year, will be put in the cold storage. There are about 650,000 houses in old areas, 550,000 in new areas and 450,000 unauthorised houses in new areas.
Himachal govt considers satellite towns to check urban migration
Himachal Pradesh government has initiated a process to set up satellite townships at Dharamsala and Mandi to check rural population from moving to cities and to disperse urban populace from the congested towns. A proposal to set up new housing colonies at Theog and Pateog in Shimla district, Bhatolikhurd and Sansiwala in Solan district, Una and Rakkar in Una district, Dhaundi in Mandi district, Katyar, Palampur in Kangra district, Tikkaloharda in Hamirpur district and Bhatyat in Bilaspur district is being considered by the government.
The state government has identified land measuring 439 bighas while another chunk of 828 bighas has been identified near airport at Dharamsala. Similarly, government land of 602 bigha and 1,722-bigha private land has been identified at village Nasloh near Mandi for setting up of satellite townships. The government has also acquired 670 bigha of land at Kullu Jhanda near Baddi for setting up of education hub. Planning for Rs 28.26-crore project has already been finalised with 10 plots allotted to different educational institutions.
Official sources in the Himachal Pradesh Urban Development Authority (HIMUDA) said the authority has been entrusted the vital task to develop housing colonies at various places in the state. The authority is constructing houses under different housing schemes like social housing schemes, self-financing schemes and rental housing schemes for state government employees and police personnel.
The state government has identified land measuring 439 bighas while another chunk of 828 bighas has been identified near airport at Dharamsala. Similarly, government land of 602 bigha and 1,722-bigha private land has been identified at village Nasloh near Mandi for setting up of satellite townships. The government has also acquired 670 bigha of land at Kullu Jhanda near Baddi for setting up of education hub. Planning for Rs 28.26-crore project has already been finalised with 10 plots allotted to different educational institutions.
Official sources in the Himachal Pradesh Urban Development Authority (HIMUDA) said the authority has been entrusted the vital task to develop housing colonies at various places in the state. The authority is constructing houses under different housing schemes like social housing schemes, self-financing schemes and rental housing schemes for state government employees and police personnel.
RBI should cut key rates by another 100 bps, says Kamath
Forecasting that inflation is inching towards zero, ICICI Bank MD and CEO K V Kamath suggested that the Reserve Bank of India (RBI) should further cut key policy rates by 100 basis points to usher in a low-interest rate regime.
“Let us start by cutting them (repo and reverse repo rates) by 1 per cent or so, and see what happens,” Kamath said, when asked what his advise would be for RBI to reverse the slowdown.
“It would be in everybody’s interest to work interest rates down. Inflation is clearly moving towards zero. It is the right time to work on this front now. The economy thrives in a low-interest rate scenario. By the time inflation comes to zero or near zero, we have interest rates down to where we wanted...So I think use repo and reverse repo in small measures and see what they do to interest rates,” Kamath said.
Inflation has nearly halved from the peak of 12.91 per cent in August.
RBI, Kamath said, could give further fillip to interest rates so that the benefits could be passed on to both industry as well as consumers. Appropriate signals through cut in key policy rates, he said, would “indeed bring down the rates from where they are today”.
Since October, RBI has reduced repo rate by 250 basis points and the reserve repo rate by 100 basis points to 6.5 per cent and 5 per cent, respectively, signalling a soft interest rate regime.
“Let us start by cutting them (repo and reverse repo rates) by 1 per cent or so, and see what happens,” Kamath said, when asked what his advise would be for RBI to reverse the slowdown.
“It would be in everybody’s interest to work interest rates down. Inflation is clearly moving towards zero. It is the right time to work on this front now. The economy thrives in a low-interest rate scenario. By the time inflation comes to zero or near zero, we have interest rates down to where we wanted...So I think use repo and reverse repo in small measures and see what they do to interest rates,” Kamath said.
Inflation has nearly halved from the peak of 12.91 per cent in August.
RBI, Kamath said, could give further fillip to interest rates so that the benefits could be passed on to both industry as well as consumers. Appropriate signals through cut in key policy rates, he said, would “indeed bring down the rates from where they are today”.
Since October, RBI has reduced repo rate by 250 basis points and the reserve repo rate by 100 basis points to 6.5 per cent and 5 per cent, respectively, signalling a soft interest rate regime.
HFCs plan to cut rates on sub-Rs 20 lakh loans
New home loan borrowers, with a loan size of less than Rs 20 lakh, may get cheaper loans from institutional lenders from January 1, 2009.
Following the leaders, second-rung HFCs like Dewan Housing Finance (DHFL), GIC Housing Finance (GICHF), DHFL Vysya Housing Finance, among others are likely to reduce interest rates by 1-1.5 percentage points compared to their existing rates for loans up to Rs 20 lakh. These lenders also plan to reduce rates for existing borrowers, albeit by a lesser extent.
GICHF, with a home loan portfolio of Rs 2,800 crore, has decided to reduce interest rates by 1-1.5 percentage points for fresh borrowers. Accordingly, for loans below Rs 20 lakh, it will charge 10.25 per cent per annum for 5-15 years and 10.5 per cent per annum for over 15 years.
DHFL, with a home loan portfolio of around Rs 5,000 crore, is yet to finalise its plan. Going by information trickling in, it may offer special rates, too, for the both sub-Rs 20 lakh and sub-Rs 5 lakh loan categories. Its subsidiary, DHFL Vysya Housing Finance, also plans to introduce special rates for new home loan takers.
These players have taken the cue from public sector banks and the market leader Housing Development Finance Corporation (HDFC). Following the government’s diktat, public sector banks have created a concession rate of 9.25 per cent for home loans below Rs 20 lakh and 8.5 per cent for loans less than Rs 5 lakh. HDFC has announced a floating interest rate of 10.25 per cent for loans up to Rs 20 lakh and 11.25 per cent for loans above Rs 20 lakh.
National Housing Bank (NHB), which offers refinance support to HFCs, has introduced a special Rs 4,000 crore refinance facility at 8 per cent annual rate. It has also announced a Rs 2,000-crore refinance support for loans against rural housing projects. “As we will get refinance from NHB at easy terms, we have decided to pass on the benefit to new customers from January 1,” said M Sivaraman, managing director, GICHF.
Industry players, however, believe that NHB facility would be available only against fresh lending. So, the benefit of the soft rates will be limited to fresh loans. GICHF, for instance, will reduce its interest rates for existing customers by 0.25 percentage points.
According to DHFL Vysya Housing Finance managing director R Nambirajan, the company will cut its rates by 0.5 percentage points for existing borrowers across the spectrum. “Besides offering the special refinance scheme, NHB has reduced its normal refinance rates too. Both the moves will help lowering interest rates,” Nambirajan said.
“As we have reduced rates, we also expect HFCs to reduce rates and pass on the benefits to end-customers,” said S Sridhar, CMD, NHB.
Following the leaders, second-rung HFCs like Dewan Housing Finance (DHFL), GIC Housing Finance (GICHF), DHFL Vysya Housing Finance, among others are likely to reduce interest rates by 1-1.5 percentage points compared to their existing rates for loans up to Rs 20 lakh. These lenders also plan to reduce rates for existing borrowers, albeit by a lesser extent.
GICHF, with a home loan portfolio of Rs 2,800 crore, has decided to reduce interest rates by 1-1.5 percentage points for fresh borrowers. Accordingly, for loans below Rs 20 lakh, it will charge 10.25 per cent per annum for 5-15 years and 10.5 per cent per annum for over 15 years.
DHFL, with a home loan portfolio of around Rs 5,000 crore, is yet to finalise its plan. Going by information trickling in, it may offer special rates, too, for the both sub-Rs 20 lakh and sub-Rs 5 lakh loan categories. Its subsidiary, DHFL Vysya Housing Finance, also plans to introduce special rates for new home loan takers.
These players have taken the cue from public sector banks and the market leader Housing Development Finance Corporation (HDFC). Following the government’s diktat, public sector banks have created a concession rate of 9.25 per cent for home loans below Rs 20 lakh and 8.5 per cent for loans less than Rs 5 lakh. HDFC has announced a floating interest rate of 10.25 per cent for loans up to Rs 20 lakh and 11.25 per cent for loans above Rs 20 lakh.
National Housing Bank (NHB), which offers refinance support to HFCs, has introduced a special Rs 4,000 crore refinance facility at 8 per cent annual rate. It has also announced a Rs 2,000-crore refinance support for loans against rural housing projects. “As we will get refinance from NHB at easy terms, we have decided to pass on the benefit to new customers from January 1,” said M Sivaraman, managing director, GICHF.
Industry players, however, believe that NHB facility would be available only against fresh lending. So, the benefit of the soft rates will be limited to fresh loans. GICHF, for instance, will reduce its interest rates for existing customers by 0.25 percentage points.
According to DHFL Vysya Housing Finance managing director R Nambirajan, the company will cut its rates by 0.5 percentage points for existing borrowers across the spectrum. “Besides offering the special refinance scheme, NHB has reduced its normal refinance rates too. Both the moves will help lowering interest rates,” Nambirajan said.
“As we have reduced rates, we also expect HFCs to reduce rates and pass on the benefits to end-customers,” said S Sridhar, CMD, NHB.
Rate cuts expected by home finance firms
National Housing Bank (NHB) said it expects housing finance companies (HFCs) to reduce interest rates in the coming days.
“As we have reduced rates, we expect housing finance companies to reduce too and pass on the benefits to consumers. Many housing finance companies have already reduced rates by 50-75 basis points. I expect them to cut rates further,” said S Sridhar, chairman and managing director, NHB.
NHB extends refinance for rural housing projects at 8 per cent, while for other sections, the rate varies between 9 per cent and 9.5 per cent. It has also reduced its prime lending rate (PLR) by 50 basis points to 10.75 per cent.
Following the series of measures, the two largest housing finance companies -- HDFC and LIC Housing Finance -- have lowered interest rates. Earlier this month, HDFC lowered its retail PLR by 50 basis points to 14.50 per cent, while LIC Housing Finance said it would cut its offer rate by 175 basis points to 9.75 per cent for loans up to Rs 20 lakh with a tenure of more than five years.
Sridhar also said that NHB is planning to raise Rs 3,000 crore, mostly through bonds, by June 2009. NHB had raised nearly Rs 7,800 crore in the first half of the year. In addition, the Reserve Bank of India (RBI) had granted it a refinance facility of Rs 4,000 crore.
“Our fund-raising plans will depend on demand. We are also getting Rs 4,000 crore refinance facility from RBI. We could be raising Rs 3,000 crore by June 2009. Our last borrowing was 10 days ago, which was a zero coupon bond, with effective interest rate of eight per cent,” Sridhar said.
NHB is also pushing reverse mortgage scheme and expects to finalise tie-up with insurance companies before the launch of a new annuity product for senior citizens.
“We are in talks with major insurance companies for the new product,” Sridhar said, while referring to the restructuring of reverse mortgage.
Sridhar said NHB was hopeful of extending the tenure of loan to senior citizens under reverse mortgage to their entire lifetime from 20 years at present.
“As we have reduced rates, we expect housing finance companies to reduce too and pass on the benefits to consumers. Many housing finance companies have already reduced rates by 50-75 basis points. I expect them to cut rates further,” said S Sridhar, chairman and managing director, NHB.
NHB extends refinance for rural housing projects at 8 per cent, while for other sections, the rate varies between 9 per cent and 9.5 per cent. It has also reduced its prime lending rate (PLR) by 50 basis points to 10.75 per cent.
Following the series of measures, the two largest housing finance companies -- HDFC and LIC Housing Finance -- have lowered interest rates. Earlier this month, HDFC lowered its retail PLR by 50 basis points to 14.50 per cent, while LIC Housing Finance said it would cut its offer rate by 175 basis points to 9.75 per cent for loans up to Rs 20 lakh with a tenure of more than five years.
Sridhar also said that NHB is planning to raise Rs 3,000 crore, mostly through bonds, by June 2009. NHB had raised nearly Rs 7,800 crore in the first half of the year. In addition, the Reserve Bank of India (RBI) had granted it a refinance facility of Rs 4,000 crore.
“Our fund-raising plans will depend on demand. We are also getting Rs 4,000 crore refinance facility from RBI. We could be raising Rs 3,000 crore by June 2009. Our last borrowing was 10 days ago, which was a zero coupon bond, with effective interest rate of eight per cent,” Sridhar said.
NHB is also pushing reverse mortgage scheme and expects to finalise tie-up with insurance companies before the launch of a new annuity product for senior citizens.
“We are in talks with major insurance companies for the new product,” Sridhar said, while referring to the restructuring of reverse mortgage.
Sridhar said NHB was hopeful of extending the tenure of loan to senior citizens under reverse mortgage to their entire lifetime from 20 years at present.
New hospitality projects in north
Kanatal Resorts and Spa Private Ltd, which has recently set up a new property worth Rs 25 crore in Uttaranchal, is considering setting up a similar resort at an offbeat location.
Besides, the company will also come up with a five-star hotel near Dehradun. The construction for the same is likely to start from the mid 2009,which is expected to get functional by the end of 2011.
The Kanatal resort has witnessed occupancy around 52 per cent from June to November and has generated revenue of Rs 1.5 crore till now.
Deepak Mittal managing director, Kanatal Resort said, “Tourism industry now a days is not only about staying in a resort or a hotel. The concept has expanded and people are looking forward for change with additional services, better quality and value for their money. Our resort has catered to various upmarket elites and foreign nationals since its opening. To attract more number of guests all across India and foreign nations in the future, we will expand the concept of spa by introducing various spa packages for the guests travelling to Himalayas. Our luxury spa getaways will attract many visitors to the area and from abroad”.
“Ananda spa is no doubt a great success story in India. But Kanatal Resort and Spa is here to provide our Indian friends with same comfort and therapies, which are available internationally giving the best and the latest healing therapies,” Mittal added.
Besides, the company will also come up with a five-star hotel near Dehradun. The construction for the same is likely to start from the mid 2009,which is expected to get functional by the end of 2011.
The Kanatal resort has witnessed occupancy around 52 per cent from June to November and has generated revenue of Rs 1.5 crore till now.
Deepak Mittal managing director, Kanatal Resort said, “Tourism industry now a days is not only about staying in a resort or a hotel. The concept has expanded and people are looking forward for change with additional services, better quality and value for their money. Our resort has catered to various upmarket elites and foreign nationals since its opening. To attract more number of guests all across India and foreign nations in the future, we will expand the concept of spa by introducing various spa packages for the guests travelling to Himalayas. Our luxury spa getaways will attract many visitors to the area and from abroad”.
“Ananda spa is no doubt a great success story in India. But Kanatal Resort and Spa is here to provide our Indian friends with same comfort and therapies, which are available internationally giving the best and the latest healing therapies,” Mittal added.
Maytas selling assets, wants to raise $500 million
Maytas Properties, the Hyderabad-based real estate firm linked to Satyam Computer Services chairman S Ramalinga Raju’s family, has reportedly approached consulting firms and bankers to chart out a $500 million (about Rs 2,350-crore) fund-raising plan through divestments in key identified assets. Maytas’ fund-raising exercise would see the property firm bring in equity partners in some of its ambitious projects or sell some of its assets spread across most southern states, a business daily reported.
However, a Maytas spokesperson has declined and said: “We cannot comment on market speculation.”
Kotak Realty, a real estate fund promoted by Kotak Mahindra Group, is in talks with Maytas to pick up equity in Maytas’ warehousing project. Confirming the development, Kotak Realty Fund CEO S Srinivasan said: “We are in talks, (but) no deal has been signed so far.”
Some of the assets that could be used to unlock cash, include the group’s three SEZs, an ambitious warehousing project, property developments in various cities and outright sale of land parcels in and around Hyderabad, the report added.
Meanwhile, the firm has already put on block over 60 acres of land situated opposite to the Satyam Technology Centre in the northern outskirts of Hyderabad. With prevailing land valuations in the region at around Rs 4 crore per acre, the total value of this deal could reach Rs 250 crore. Maytas has about 350 acres of land in Nagpur, Maharashtra, as part of its land bank and for 25 upcoming projects in Andhra Pradesh and Tamil Nadu.
The funds from some of these equity dilutions are expected to meet the promoters’ equity contribution in the Rs 12,000 crore Hyderabad Metro Rail project that has been undertaken by the group company Maytas Infra, quoted sources close to the development in the report.
Earlier, Satyam has called off the purchase of Maytas Properties, for $1.3 billion and a 51 per cent stake in Maytas Infra, citing "the market reaction to the decision.
However, a Maytas spokesperson has declined and said: “We cannot comment on market speculation.”
Kotak Realty, a real estate fund promoted by Kotak Mahindra Group, is in talks with Maytas to pick up equity in Maytas’ warehousing project. Confirming the development, Kotak Realty Fund CEO S Srinivasan said: “We are in talks, (but) no deal has been signed so far.”
Some of the assets that could be used to unlock cash, include the group’s three SEZs, an ambitious warehousing project, property developments in various cities and outright sale of land parcels in and around Hyderabad, the report added.
Meanwhile, the firm has already put on block over 60 acres of land situated opposite to the Satyam Technology Centre in the northern outskirts of Hyderabad. With prevailing land valuations in the region at around Rs 4 crore per acre, the total value of this deal could reach Rs 250 crore. Maytas has about 350 acres of land in Nagpur, Maharashtra, as part of its land bank and for 25 upcoming projects in Andhra Pradesh and Tamil Nadu.
The funds from some of these equity dilutions are expected to meet the promoters’ equity contribution in the Rs 12,000 crore Hyderabad Metro Rail project that has been undertaken by the group company Maytas Infra, quoted sources close to the development in the report.
Earlier, Satyam has called off the purchase of Maytas Properties, for $1.3 billion and a 51 per cent stake in Maytas Infra, citing "the market reaction to the decision.
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