Real Estate in India: Prices, Market, Ventures

Weekly news updates on trends in the Indian real estate market

‘Gated communities are popular as they provide security, services and exclusivity to the residents. ‘Built to suit’ work space is popular with builders and MNC clients. Each city has its typical characteristics of preferences, especially amongst the uber rich. Realty stocks have taken a beating due to the global credit crisis.

- Chillibreeze Business Research Team

Makeover plan sees Dharavi prices skyrocketing

Dharavi, Asia largest slum is making the transition to an upscale neighbourhood of Mumbai.

The Rs 9,250-crore Dharavi makeover plan has fuelled a property price. The rates have increased by 30-40 per cent in the last four-five months. Property is currently selling at Rs 4000 per sq ft. Proximity to Bandra Kurla complex is an important factor in rising prices.

Analysts expect property rates to touch Rs 10,000 per sq ft once the makeover is complete.
Aug 28, 2007
Source: Hindustan Times

DLF targets 200 multiplex screens by 2009

DT Cinemas, a DLF Group subsidiary is planning to set up multiplexes in major Indian cities like Mumbai, Delhi, Chennai, Bangalore, Ahmedabad, Noida, Gurgaon, Pune, Goa, Ludhiana, Chandigarh and Kochi.

200 screens are expected to be added in the next 2 years with an approximate investment of Rs 500 crores.
Aug 27, 2007
Source: www.businessofcinema.com

Realty stocks hit hardest in recent fall

Real estate, metal and banking stocks were the hardest hit in the recent slide on the bourses. Investors, sensing that these sectors may be affected by the turmoil in the global credit markets, dumped shares of DLF, Unitech, Indiabulls Real Estate (among real estate), Hindalco and Tata Steel (metals), and ICICI Bank and State Bank of India (banking).

The BSE Realty Index, which shed nearly 20 per cent from its one-month high since July 24, witnessed the highest fall in the recent stock market turbulence among all sector-specific indices and Unitech went down 23 per cent.
Aug 27, 2007
Source: Business Standard

Unitech an underperformer, target Rs 395: Karvy

Unitech is India’s second largest listed real estate developer with a land bank of nearly 10,700 acres spanning across India.

Karvy Stock Broking has rated Unitech as an underperformer, with a 12 month price target of Rs 395 based on 1x FY09 NPV valuation of Rs 395/ share. Firm believes that its valuations are stretched at 1.63x NAV of Rs 280 and 1.15x FY09 NPV of Rs 395.
Aug 27, 2007
Source: moneycontrol.com

Heady days ahead for real estate market

The real estate sector has witnessed boom due to factors like rise in disposable incomes, favorable government policies and exponential growth in sectors like IT, entertainment, retailing and hospitality. Several real estate developers have launched successful IPOs. However, rise in interest rates and spiraling property prices have led to a slow down.

Market trends differ across cities, with Mumbai being totally different from the other cities due to its spatial development focused towards the north of the city, unlike others.

Developers continue to build their land banks. Those developers which acquired property at high rates may be feeling the impact of the slow down.
Aug 26, 2007
Source: The Hindu

Real estate is living dreams

Builders in India are focusing on high end gated communities. Gated communities provide the services, security, exclusive community and luxury for a buyer- at a price.

Jaypee Greens, Emaar MGF, Mantri Developers, Asipac Projects, PS Group are some real estate firms who are developing gated properties across different cities in India.

Townships need large tracts of land, even though the mixed land use makes economic sense. Similary, villas require more land compared to apartment complexes.
Aug 26, 2007
Source: Economic Times

Core sector firms into realty ventures

Infrastructure companies like Soma Enterprise, Simplex Infrastructure and GMR Infrastructure are planning to enter the Indian real estate market.

This follows increase in profit margins, inhouse capabilities, booming & corporatised real estate sector.
Aug 26, 2007
Source: Economic Times

Check out India's most expensive boulevard

Kolkata’s Alipore Road, Delhi’s Lutyens’ zone and Mumbai’s Napean Sea Road are the most exclusive and most expensive addresses.

A study by Cushman & Wakefield took into account only the premium apartment complexes and independent houses in Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad. The most expensive location in each city was identified based on the fact that independent units of the identified location would be of one of the highest values within the city. The sample size, however, is not representative of the total stock or supply of that area and is restricted to the most premium construction in a single location. Hyderabad’s Banjara Hills tops the list with aggregate value of properties stands at Rs 96,000 crore.

An interesting trend that emerged out of the study was that the uber rich in different cities lived differently and had a different view about ‘exclusivity’.
Aug 26, 2007
Source: Economic Times

Realty firms urge Dubai NRIs to invest in Chennai

Real estate companies participating in the HDFC India Homes Fair in Dubai say Chennai's economy has driven a major improvement in the quality and value of the city's property developments.

Dubai NRIs from Chennai are the second highest in numbers to Keralites.
Aug 23, 2007
Source: Gulf News

Work space trends in India

Growth of IT and ITES industry has led to a growth of buil to suit office space. According to industry estimates, a large chunk or about 20-30 per cent of the overall office space supply today is built-to-suit.

According to real estate advisor DTZ, in 2006, 10.6 million sq ft of office space was absorbed in the NCR of which 4.6 million sq ft of space was pre-committed. According to JLL, developers require a commitment of more than 2 lakh sq ft prior to building as per client requirements.

Cities like Bangalore have a different demand scenario and built to suit timelines are not suitable to most MNCs planning to open shop. Some companies have opted for campuses to be developed by a construction company
Aug 25, 2007
Source: Business Standard

The realty bites – freebies for the asking now

Builders and developers are working on adding incentives to keep the sales going to beat the slow down due to the rise in interest rates. For example, builders offer to bear the stamp duty on the property, pay property insurance for three years or offer a car park free or offer furniture and fittings free.
Aug 25, 2007
Source: The Hindu

Orbit sells space to JSW Steel

Orbit Corporation Limited, a real estate developer, has said it would sell commercial space at Kalina in suburban Mumbai for Rs 807 crore to JSW Steel Limited, JSW Power Trading Company Limited and JSW Investments Private Limited.

Orbit will construct about four lakh sq ft of commercial space for JSW at Kalina. On Tuesday, JSW Steel announced that it would be purchasing office premises from Orbit at a cost of Rs 336 crore.
Aug 22, 2007
Source: Hindu Business Line