International investment management group Aberdeen Asset Management is reportedly in the process of setting up a $1 billion real estate fund for India. The money would be invested over the next three years, at project and entity levels with real estate companies, according to a business daily.
An investment banker associated with Aberdeen in India said the India-dedicated real estate fund from the group would start operations in March or April this year. "The group is quite bullish on the business atmosphere in India. It is particularly gung-ho on the real estate and infrastructure sectors," the investment banker said in the report.
Aberdeen Asset Management has more than $198 billion of funds under management in various parts of the world. The group already has a significant exposure to the Indian stock market and has stake in many listed companies.
The group owns about 5 per cent in Satyam Computer Services, and is the second largest single investor in the company.
As of now, Aberdeen has not taken much exposure to the real estate sector in India.
Friday, January 2, 2009
Leela to launch three new hotels in 2009
The Leela Hotel Group plans to launch three new hotels in 2009, its chairman C P Krishnan Nair said.
"Our next offering will be The Leela, Hotel and Residences in Gurgaon in January 2009 and The Leela Palace, Udaipur shortly thereafter. The Leela Palace, Chennai will open in late 2009," Nair said.
The Leela Palace in New Delhi will be completed in time to accommodate guests for the Commonwealth Games in October 2010, Nair said.
Nair also said the company is planning to make its presence felt in the Indian heritage circuit with projets in Agra and Jaipur. Besides, developments in Hyderabad and Pune are also underway.
"Our next offering will be The Leela, Hotel and Residences in Gurgaon in January 2009 and The Leela Palace, Udaipur shortly thereafter. The Leela Palace, Chennai will open in late 2009," Nair said.
The Leela Palace in New Delhi will be completed in time to accommodate guests for the Commonwealth Games in October 2010, Nair said.
Nair also said the company is planning to make its presence felt in the Indian heritage circuit with projets in Agra and Jaipur. Besides, developments in Hyderabad and Pune are also underway.
Goldman Sachs buys Rs 30 crore shares in Indiabulls realty arm
Foreign fund Goldman Sachs Investments Mauritius (India) bought shares worth Rs 30.84 crore in Indiabulls Real Estate through open market transactions.
According to the information on bulk deals available on the National Stock Exchange (NSE), Goldman Sachs Investments Mauritius bought 20.89 lakh shares at Rs 147.64 per piece aggregating to Rs 30.84 crore.
The share price of Indiabulls Real Estate surged Rs 23.4 to Rs 154.8 on Thursday after Goldman Sachs Investments Mauritius I bought 20,89,000 shares of the realty company at Rs 147.64 during the last half-an-hour of the trading session. The stock on Thursday gained momentum on positive triggers including hopes of expected announcements on the second stimulus plan and rate cuts by the central bank after inflation dipped further to the lowest since march 2008. The expected economic package is expected to be favourable for the interest-sensitive sectors.
The stock has so far outperformed the market in the last one month.
The realty stock has appreciated 71.25 per cent in the last one year as compared to the BSE Realty Index, which gained 63.94 per cent in the same period.
According to the information on bulk deals available on the National Stock Exchange (NSE), Goldman Sachs Investments Mauritius bought 20.89 lakh shares at Rs 147.64 per piece aggregating to Rs 30.84 crore.
The share price of Indiabulls Real Estate surged Rs 23.4 to Rs 154.8 on Thursday after Goldman Sachs Investments Mauritius I bought 20,89,000 shares of the realty company at Rs 147.64 during the last half-an-hour of the trading session. The stock on Thursday gained momentum on positive triggers including hopes of expected announcements on the second stimulus plan and rate cuts by the central bank after inflation dipped further to the lowest since march 2008. The expected economic package is expected to be favourable for the interest-sensitive sectors.
The stock has so far outperformed the market in the last one month.
The realty stock has appreciated 71.25 per cent in the last one year as compared to the BSE Realty Index, which gained 63.94 per cent in the same period.
Citibank likely to slash interest rates
After majority of Indian banks slashed their interest rates taking a cue from Reserve Bank's recent policy signals, leading foreign lender, Citibank is likely to follow the suit by cutting its lending and deposit rates in near future.
Citi is considering up to 0.5 per cent cut in its deposit rates and a similar reduction in its benchmark prime lending rates, a top Citibank Official said.
"We may look at an up to 0.5 per cent reduction in our deposit rates across different tenures. With the cost of funds in the banking system coming down, there is a clear downward pressure on interest rates," the official said.
Citi had slashed its PLR by 0.75 per cent in November last year. Its PLR at present stands at 15 per cent.
"Once the deposit rates are lowered, there is an increased scope for effecting a reduction in our lending rates," the official said.
Many banks including the largest Indian lender, State Bank of India (SBI) and ICICI Bank had cut their lending and deposit rates in the recent past to translate the recent cuts in RBI key rates.
In order to improve liquidity in market and to prompt banks to lower their rates, the RBI has cut its cash reserve ratio to 5.5 per cent, repo rate to 6.5 per cent and reverse repo to 5 per cent since October last year.
Citi is considering up to 0.5 per cent cut in its deposit rates and a similar reduction in its benchmark prime lending rates, a top Citibank Official said.
"We may look at an up to 0.5 per cent reduction in our deposit rates across different tenures. With the cost of funds in the banking system coming down, there is a clear downward pressure on interest rates," the official said.
Citi had slashed its PLR by 0.75 per cent in November last year. Its PLR at present stands at 15 per cent.
"Once the deposit rates are lowered, there is an increased scope for effecting a reduction in our lending rates," the official said.
Many banks including the largest Indian lender, State Bank of India (SBI) and ICICI Bank had cut their lending and deposit rates in the recent past to translate the recent cuts in RBI key rates.
In order to improve liquidity in market and to prompt banks to lower their rates, the RBI has cut its cash reserve ratio to 5.5 per cent, repo rate to 6.5 per cent and reverse repo to 5 per cent since October last year.
SBT cuts Benchmark Prime Lending Rate to 12.75%
State Bank of Travancore has effected a cut in its benchmark prime lending rate by 50 basis points from 13.25 per cent to 12.75 per cent with effect from January 1.
A bank spokesman said that rates on all existing and new loans linked to the PLR, including housing and car loans, will come down accordingly.
A bank spokesman said that rates on all existing and new loans linked to the PLR, including housing and car loans, will come down accordingly.
Omaxe rises
Shares of Omaxe have advanced by 2 per cent to Rs 65.8 after reports stated that the company received an order worth Rs 200 crore to build two jails in Punjab.
The scrip has touched an intra-day high of Rs 66 and a low of Rs 64 and has recorded volumes of over 1,00,000 shares on NSE.
The scrip has touched an intra-day high of Rs 66 and a low of Rs 64 and has recorded volumes of over 1,00,000 shares on NSE.
LIC Housing Finance share rises
Shares of LIC Housing Finance have gained by 1.5 per cent to Rs 234. Reports stated that the company cut interest rates by 75 basis points, effective January 1, for its existing home loan borrowers after a reduction in its cost of funds.
The scrip has touched an intra-day high of Rs 234 and a low of Rs 230 and has recorded volumes of over 1,00,000 shares on NSE.
The scrip has touched an intra-day high of Rs 234 and a low of Rs 230 and has recorded volumes of over 1,00,000 shares on NSE.
Infrastructure projects likely to delay
Infrastructure development through so-called public-private partnerships, or PPPs, has ground to a halt in West Bengal as the economic downturn forces cash-strapped private developers to stay on the sidelines and prompting civic bodies such as Kolkata Metropolitan Development Authority (KMDA) and Kolkata Improvement Trust (KIT) to stall or abort several projects.
One casualty has been the planned revamp of Bow Barracks, a run-down residential complex in central Kolkata, a former British garrison. KIT, which owns the property, is no longer sure developers will be interested.
“It is pointless to float a tender now. Auctions are drawing a blank… We would wait and launch these projects at an appropriate time,” said Asok Bhattacharya, West Bengal’s minister for urban development. To be sure, the situation isn’t peculiar to Kolkata or West Bengal. Across India, projects have stalled amid a credit crunch and uncertainty about returns on investment in capital-intensive public works.
The postponement came after KIT stopped taking rent from the 130-odd families living there.
The buildings, spread over an acre, were declared unsafe as far back as 1980. KIT wants residents of Bow Barracks to move so that the buildings could be demolished for new homes.
A blueprint for the proposed redevelopment of Bow Barracks had been prepared. Half the plot was to be given to a developer for commercial use. On the other half, a residential complex was to be built for the 1,500 residents of Bow Barracks, mostly Anglo-Indians living there for generations. KIT had obtained the consent of a large section of the residents, before the downturn caused the project to be stalled.
Another stalled project is a 100-acre business park for financial companies planned by KMDA on the eastern fringes of Kolkata. A January launch has been postponed because of lack of interest from private developers. “This was to be a prestigious project for KMDA, so (it) couldn’t afford a bad start,” said Bhattacharya.
Smaller projects such as shopping malls and multiplexes aren’t selling either, according to a KMDA official, who didn’t want to be identified, including a shopping mall and multiplex on a two-acre property in the suburbs of Kolkata that received no bids.
Companies such as Simplex Infrastructures Ltd and Ambuja Realty Development Ltd, which are partners with the state government in several projects, say they aren’t sure about returns from PPP projects in the present scenario.
“There’s hardly any support from financial institutions, plus the returns expected from these projects aren’t exciting,” said BD Mundhra, chairman and managing director of Simplex.
Harshavardhan Neotia, chairman of Ambuja Realty Group, said work on the PPP projects awarded to his company were going on as planned. “But in hindsight, we feel fortunate for having lost out on some PPP projects, for which people had bid very aggressively. Many of these projects are perhaps not viable anymore,” added Neotia.
One casualty has been the planned revamp of Bow Barracks, a run-down residential complex in central Kolkata, a former British garrison. KIT, which owns the property, is no longer sure developers will be interested.
“It is pointless to float a tender now. Auctions are drawing a blank… We would wait and launch these projects at an appropriate time,” said Asok Bhattacharya, West Bengal’s minister for urban development. To be sure, the situation isn’t peculiar to Kolkata or West Bengal. Across India, projects have stalled amid a credit crunch and uncertainty about returns on investment in capital-intensive public works.
The postponement came after KIT stopped taking rent from the 130-odd families living there.
The buildings, spread over an acre, were declared unsafe as far back as 1980. KIT wants residents of Bow Barracks to move so that the buildings could be demolished for new homes.
A blueprint for the proposed redevelopment of Bow Barracks had been prepared. Half the plot was to be given to a developer for commercial use. On the other half, a residential complex was to be built for the 1,500 residents of Bow Barracks, mostly Anglo-Indians living there for generations. KIT had obtained the consent of a large section of the residents, before the downturn caused the project to be stalled.
Another stalled project is a 100-acre business park for financial companies planned by KMDA on the eastern fringes of Kolkata. A January launch has been postponed because of lack of interest from private developers. “This was to be a prestigious project for KMDA, so (it) couldn’t afford a bad start,” said Bhattacharya.
Smaller projects such as shopping malls and multiplexes aren’t selling either, according to a KMDA official, who didn’t want to be identified, including a shopping mall and multiplex on a two-acre property in the suburbs of Kolkata that received no bids.
Companies such as Simplex Infrastructures Ltd and Ambuja Realty Development Ltd, which are partners with the state government in several projects, say they aren’t sure about returns from PPP projects in the present scenario.
“There’s hardly any support from financial institutions, plus the returns expected from these projects aren’t exciting,” said BD Mundhra, chairman and managing director of Simplex.
Harshavardhan Neotia, chairman of Ambuja Realty Group, said work on the PPP projects awarded to his company were going on as planned. “But in hindsight, we feel fortunate for having lost out on some PPP projects, for which people had bid very aggressively. Many of these projects are perhaps not viable anymore,” added Neotia.
UAE among easiest nations to register property
The UAE is the second easiest country in the Arab world to register property, according to a Doing Business report by the World Bank.
The easiest place in the Middle East to register property is Saudi Arabia which grabbed the number one spot. The UAE is followed by Bahrain, Oman and Sudan.
The UAE was fourth in a list of Arab countries that had fewest property registration regulations, with only three procedures. It was also the second fastest country to complete the registration process, with a time period of just six days. Informal titles cannot be used as security in obtaining loans which limits financing opportunities for businesses and individuals.
Many governments, including the UAE and specifically Dubai have recognised this and set the ball rolling to make it easier to register and transfer property officially.
"Efficient property registration reduces transaction costs and helps to formalise property titles. Simple procedures to register property are also associated with greater perceived security of property rights and less corruption," the World Bank said.
To this effect, Dubai's Real Estate Regulatory Authority (Rera) has plans in 2009 to create a specific system where people will go and register their properties.
And starting today, there is an online website Ejari, where all tenancy contracts must be registered. Rera hope this will be the final step in compiling a rental index and help them monitor the better and scale down landlord-tenant disputes.
Such plans, if successful, will make business more transparent and the lines of right and wrong less blurry. This is much-needed as, according to the report, the UAE has low rankings for investor protection and contract enforcement.
As other regions of the world remain bleak going into the new year due to crippling financial pressures, the UAE is becoming more and more attractive with business activity continuing relatively untouched.
The Middle East and North Africa (Mena) region is the second fastest reforming region in the world, as it saw 27 reforms in two-thirds of the region's economies.
Linked with property registration, the UAE is also the second easiest Arab country where getting credit is easy and was 68 in global rankings out of 181 countries. In dealing with construction permits, the UAE is heavily regulated, with 21 procedures over a lengthy 125 days.
The UAE is also in the top five Arab countries which offers the most legal rights available for borrowers and lenders.
Despite the credit crunch, the UAE still appears to be ahead, globally and regionally, in terms of getting credit.
The easiest place in the Middle East to register property is Saudi Arabia which grabbed the number one spot. The UAE is followed by Bahrain, Oman and Sudan.
The UAE was fourth in a list of Arab countries that had fewest property registration regulations, with only three procedures. It was also the second fastest country to complete the registration process, with a time period of just six days. Informal titles cannot be used as security in obtaining loans which limits financing opportunities for businesses and individuals.
Many governments, including the UAE and specifically Dubai have recognised this and set the ball rolling to make it easier to register and transfer property officially.
"Efficient property registration reduces transaction costs and helps to formalise property titles. Simple procedures to register property are also associated with greater perceived security of property rights and less corruption," the World Bank said.
To this effect, Dubai's Real Estate Regulatory Authority (Rera) has plans in 2009 to create a specific system where people will go and register their properties.
And starting today, there is an online website Ejari, where all tenancy contracts must be registered. Rera hope this will be the final step in compiling a rental index and help them monitor the better and scale down landlord-tenant disputes.
Such plans, if successful, will make business more transparent and the lines of right and wrong less blurry. This is much-needed as, according to the report, the UAE has low rankings for investor protection and contract enforcement.
As other regions of the world remain bleak going into the new year due to crippling financial pressures, the UAE is becoming more and more attractive with business activity continuing relatively untouched.
The Middle East and North Africa (Mena) region is the second fastest reforming region in the world, as it saw 27 reforms in two-thirds of the region's economies.
Linked with property registration, the UAE is also the second easiest Arab country where getting credit is easy and was 68 in global rankings out of 181 countries. In dealing with construction permits, the UAE is heavily regulated, with 21 procedures over a lengthy 125 days.
The UAE is also in the top five Arab countries which offers the most legal rights available for borrowers and lenders.
Despite the credit crunch, the UAE still appears to be ahead, globally and regionally, in terms of getting credit.
Construction value falls in UAE by 85%
The value of construction contracts awarded in the UAE fell by 85 per cent in the fourth quarter compared to the same period last year, London-based weekly Middle East Economic Digest (MEED) said.
Contract awards worth $14.4 billion were made during the fourth quarter of 2008, down from $98.1 billion during the same period in 2007 as the global credit crisis rendered project financing a struggle, MEED said.
Around $23.2 billion worth of projects have been put on hold, almost 10 per cent of the $249.7 billion of projects under construction in the UAE, MEED reported.
Projects hit by delays include Nakheel Properties' Palm Deira project in Dubai, Dubai Waterfront and Dubailand, MEED said.
In total, $191.8 billion of contract awards were made in 2008, a 60 per cent drop from the $482.5 billion of awards made in 2007.
Contract awards worth $14.4 billion were made during the fourth quarter of 2008, down from $98.1 billion during the same period in 2007 as the global credit crisis rendered project financing a struggle, MEED said.
Around $23.2 billion worth of projects have been put on hold, almost 10 per cent of the $249.7 billion of projects under construction in the UAE, MEED reported.
Projects hit by delays include Nakheel Properties' Palm Deira project in Dubai, Dubai Waterfront and Dubailand, MEED said.
In total, $191.8 billion of contract awards were made in 2008, a 60 per cent drop from the $482.5 billion of awards made in 2007.
What property buyers looking for
Sustainability is a key factor for potential property buyers, reveals a survey conducted by Dubai’s master developer Nakheel.
Sustainability and how environmentally friendly a property is tops other factors that have historically been given priority, including reliability of developer, location and prestige. The survey was undertaken following a month-long advertising campaign for the launch of Badrah, a district within Nakheel’s Waterfront development.
A cross section of 400 respondents from Dubai, Abu Dhabi and Sharjah were questioned about which factors were important to them when buying a property as well as the impact of the advertising campaign. When questioned about what makes an ideal development the five most important characteristics were environmental friendliness, reputation, reliability, affordability and innovation.
Matt Joyce, MD, Waterfront Nakheel said: “In the past, quality has been one of the most important factors for potential customers. This is the first time we’ve seen environmental concerns come through this strongly. We are currently working to align our products and services even more closely with this growing demand.”
“Waterfront has been designed, like all of Nakheel’s projects, with sustainability at its heart. The district of Badrah has an emphasis on green open spaces and is being built as a self-sustainable community with a strong focus on reducing the consumption of energy and water. We see it as a city of the future and are delighted that there is a real demand for this type of development from end-users,” Joyce added.
Of those that had seen the advertising campaign, 50 per cent said that the environmental friendliness of the project was the most defining element. Reliability was the second most influencing factor (47 per cent) followed by innovation and healthy living (both 43 per cent).
Sustainability and how environmentally friendly a property is tops other factors that have historically been given priority, including reliability of developer, location and prestige. The survey was undertaken following a month-long advertising campaign for the launch of Badrah, a district within Nakheel’s Waterfront development.
A cross section of 400 respondents from Dubai, Abu Dhabi and Sharjah were questioned about which factors were important to them when buying a property as well as the impact of the advertising campaign. When questioned about what makes an ideal development the five most important characteristics were environmental friendliness, reputation, reliability, affordability and innovation.
Matt Joyce, MD, Waterfront Nakheel said: “In the past, quality has been one of the most important factors for potential customers. This is the first time we’ve seen environmental concerns come through this strongly. We are currently working to align our products and services even more closely with this growing demand.”
“Waterfront has been designed, like all of Nakheel’s projects, with sustainability at its heart. The district of Badrah has an emphasis on green open spaces and is being built as a self-sustainable community with a strong focus on reducing the consumption of energy and water. We see it as a city of the future and are delighted that there is a real demand for this type of development from end-users,” Joyce added.
Of those that had seen the advertising campaign, 50 per cent said that the environmental friendliness of the project was the most defining element. Reliability was the second most influencing factor (47 per cent) followed by innovation and healthy living (both 43 per cent).
Maytas Infra will execute Hyderabad Metro project, says Reddy
In what could bring some respite to Maytas Infra, which is caught in a controversy after Satyam aborted its bid to acquire it, the Andhra Pradesh government refused to see the Satyam issue as a factor that would impact the Rs 12,000 crore Hyderabad Metro Rail (HMR) project, which is being executed by a Maytas-led consortium. Maytas Infra is promoted by the family members of Satyam founder and chairman B Ramalinga Raju.
“There have been some issues in the Satyam management because of some decision taken by its board. They are between the shareholders and the management. We are not concerned with them in any way,” said chief minister YS Rajasekhara Reddy on the sidelines of a press conference here today.
“Satyam is Satyam. Maytas is Maytas. Right now, we do not see any problem. Maytas will do it (metro rail),” Redd said.
Earlier, HMR Corporation managing director NVS Reddy had said the project was on course to achieve financial closure by March 2009. Its consortium partner IL&FS was negotiating with different banks and 60 per cent of the loan component had already been tied up. The Maytas-led consortium comprises Nava Bharat Ventures Ltd, Italian-Thai Development Plc and IL&FS.
“There have been some issues in the Satyam management because of some decision taken by its board. They are between the shareholders and the management. We are not concerned with them in any way,” said chief minister YS Rajasekhara Reddy on the sidelines of a press conference here today.
“Satyam is Satyam. Maytas is Maytas. Right now, we do not see any problem. Maytas will do it (metro rail),” Redd said.
Earlier, HMR Corporation managing director NVS Reddy had said the project was on course to achieve financial closure by March 2009. Its consortium partner IL&FS was negotiating with different banks and 60 per cent of the loan component had already been tied up. The Maytas-led consortium comprises Nava Bharat Ventures Ltd, Italian-Thai Development Plc and IL&FS.
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