Multi usage properties and townships is the new trend in Indian Real Estate

ICICI Seeks $2 Billion for Biggest Indian Realty Fund

ICICI Venture Funds Management Co plans to raise about $2 billion for the nation's biggest real estate fund. The fund will raise the money in India and overseas. The venture unit of ICICI Bank Ltd. will invest in commercial and residential developments and acquire land in India's 12 largest cities.

Set up in 1987, ICICI Venture has $2 billion under management, including $550 million in a real estate fund, and has a venture with New York-based Tishman Speyer Properties LP. It has invested 70 percent of the first fund.

ICICI Venture formed an equal venture with Tishman Speyer in April 2005 for buying and developing offices, houses and shops in India, according to the company's Web site. Tishman owns Rockefeller Center and the Chrysler Center in New York.

TSI Ventures is building 2.2 million square feet space for offices at a special economic zone in Hyderabad, in the vicinity of offices of Microsoft Corp., UBS AG and CA Inc.

October 16, 2007
Source: Bloomberg

DLF gets LoI for Rs 60,000 cr township project in Bangalore

DLF has received the letter of intent from Bangalore Metropolitan Region Development Authority to build an integrated township over 9,178 acre on the outskirts of Bangalore with an investment of about Rs 60,000 crore.

LoI is in favour of a consortium comprising DLF Ltd and Limitless Holdings, a part of Dubai World to develop Bidadi Integrated Township project in BMR region.

The state government had allotted 2,200 acres of land at Bidadi on the city outskirts. DLF would deposit Rs 57.55 lakh per acre as development charges with the state authority.

The state government has awarded the land it owns while remaining area would be acquired from private parties.

October 16, 2007
Source: PTI via Economic Times

Nitesh Estate wins Chennai realty deal

Nitesh estates has acquired a church property in the heart of Chennai city. The 642 crore deal was for a nine-acre plot near Boat Club area.

The just-concluded transaction could well be the fifth-largest land deal in India. Other major deals include Adani’s Rs 2,250-crore pact with HDIL, DLF’s Rs 1,675-crore acquisition of DCM Shriram property in Delhi, Unitech’s Rs 1,586-crore purchase in Noida and DLF’s Rs 702-crore acquisition of National Textile Mills’ land in Mumbai.

October 16, 2007
Source: Economic Times

Indian realtors bite into global pie

DLF declared that it was going to consider international acquisitions and investments in development projects abroad

Ansals API tied up with Malaysia’s UEM Group to form a 60:40 joint venture company, Ansal Api-UEM Contracts Pvt Ltd, which could bid for government projects in Malaysia, as also projects worldwide. They have also tied up with Dubai’s Deyaar to develop integrated townships in India and Dubai.

Parsvnath is looking at greenfield projects in the retail and hospitality sectors in Dubai, Mauritius, Singapore and has tied up with Al-Hasan Group in Oman. Puravankara Group is doing a project in Sri Lanka.

The Hiranandanis are coming up with their showpiece 23 Marina project at Dubai, through a joint venture.

October 15, 2007
Source: PTI via Economic Times

Premier Indian developer, Ansal sets up NY office

Ansals have set up a North America sales associate office in New York. Their US partner is Goodwill Capital. This will target the Indian American investment in residential and commercial projects.

100 percent FDI is allowed under automatic route in townships, housing, built-up infrastructure and construction-development projects. Construction projects would include hotels, resorts, hospitals, educational institutions, housing and commercial premises.

The government has also reduced the minimum mandatory area to allow FDI in real estate sector from 100 acres to 25 acres. Ansals have plans to develop townships in Sirakpur, Jammu, Kurukshetra, Penchkula and Yamunanagar.

October 14, 2007
Source: India Post News Service

A multi-usage strategy

Real estate developers are offering novel concepts to like multi-usage malls, flexi-homes and buy-back options.

Multi-usage malls which include business hotels and in some cases even offices with the retail mix are the new trend as they become an economical and viable business proposition for builders. MBD Neopolis at Ludhiana, MBD Zephyr in Bangalore are examples of mixed-usage, wherein both the malls include luxury retail, a luxury hotel as well as entertainment. The MSX mall coming up at Greater Noida, spread over an area of 6,00,000 sq ft. will have 80 service apartments with dedicated lifts, a business centre with conference rooms, secretarial facilities, a gym and even a swimming pool.

Another concept doing the rounds is that of flexi-homes, where an apartment comes with an annexe that can be used as an office. Though priced slightly higher than the other apartments, this home-cum-office concept not only benefits the self-employed, but also saves them the cost of buying/renting an office as well as on transportation.

October 14, 2007
Source: Indian Express

Rising infrastructure costs a new challenge

Office space rentals are higher in Chennai than in New Jersey.

It is costlier to establish an office at Connaught Place or Nariman Point than in the central business districts of Paris, New York, Hong Kong and Singapore.

Depending on the type of business, it could be cheaper and more profitable to actually operate the office in India, for reasons unrelated to real estate.

October 13, 2007
Source: Hindu Business Line

DLF subsidiary plans $3 bn overseas listing

DLF has now planned the biggest Indian issue overseas. DLF Office Trust Ltd, a subsidiary, is set to mop up Rs 12,000 crore ($3 billion) on the Singapore Stock Exchange. In June, DLF's IPO raised Rs 9,200 crore.

DLF Office Trust, formerly Delhi Asset Ltd, will file a draft red herring prospectus for its IPO within two weeks. It has appointed Goldman Sachs and Lehman Brothers as investment bankers for the issue.

DLF Office Trust will operate as a real estate investment trust, leasing out property developed by its parent. "The company looking at an annual yield of 9-10 per cent from these properties," said a banker.

October 12, 2007
Source: Hindustan Times

Properties near religious place don't attract buyers

Buyers avoid purchasing property near religious places. For example, in New Delhi, property prices near Mata ka Mandir in Friends colony have been stagnant for some time. The rates of DDA flats situated near religious places are around rupees one lakh less than the market rates.

October 12, 2007
Source: Economic Times