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Tatas to finally pull out of Singur

A statement by Tata Motors said that Tatas were ‘’evaluating alternate options'’ and considering relocating the plant and machinery. The move is a result of the agitation at the Singur SEZ (Special Economic Zone). Protests by ultra-Left activists and farmers over acquiring land in Nandigram turned into a bloodbath that led to the end of an SEZ worth several thousand crores by the Indonesian Salim Group.

‘’Tata Motors has been constrained to suspend construction and commissioning work at the Nano plant in Singur in view of the continued confrontation and agitation at the site,'’ the statement said. ‘’This decision was taken in order to ensure the safety of its employees and contract labour, who have continued to be violently obstructed from reporting to work,'’ it said. While the Rs 1 lakh car may yet survive this upheaval, the Tata pullout could signal the end of the road for West Bengal chief minister Buddhadeb Bhattacharjee’s ambitious industrial revival plan. Bhattacharjee had hoped that saving the Rs 1,500-crore Nano project might alter his state’s image of being hostile to industry.

Saturday, September 06, 2008  India-Realestate

SEZ developers to beat land caps with subsidiaries

State’s efforts to set a ceiling on how much land a single entity can acquire has forced companies developing special economic zones (SEZs) and large industrial projects to form hundreds of subsidiaries to buy the required tracts. Corporate India prefers this multiple subsidiary route as it also helps keep costs down by masking the identity of the parent company. Direct entry by a large industrial group would invariably push up land prices dramatically in the area.

State land ceiling laws typically allow a single corporate entity to acquire at the most 25 acres, although some states have set a cap as low as 5 acres. So, in the case of a state with a 25-acre cap, a company developing an SEZ of 10,000 acre would need to form at least 400 subsidiaries. Consultants advising developers note that this is commonplace with most SEZs. Although some states like Maharashtra adopt a more liberal policy, providing land ceiling exemptions based on the Centre’s in-principle approval to an SEZ project, others like Karnataka, Haryana and Uttar Pradesh insist on formal consent from the board of approvals for SEZs at the Centre.

Saturday, September 06, 2008  India-Realestate

Bombay Dyeing to develop surplus land

Textile major, Bombay Dyeing, will develop eight lakh sq ft of property on its surplus land in Mumbai. The company will construct a high-rise building for commercial and residential use. ”We will commence construction of a high-rise tower in two months. The entire project will be sold off in the next 24 months,” Chairman Nusli Wadia told shareholders at the company’s AGM here on Tuesday.

Although it would be difficult to fix a value for the upcoming project, real estate market sources said the company could earn a few thousand crores. Bombay Dyeing had started selling its Spring Mills project at Dadar in 2006 at an introductory price of Rs 10,200 per sq ft, which zoomed to Rs 25,000 per sq ft in January 2008. The company is redeveloping its Spring Mills property in Central Mumbai into a residential tower, 84% of which has been sold. The work at Dadar and Worli is also under way, with two commercial and IT/ITeS towers expected to be ready by 2009-10. Bombay Dyeing, which suffered a Rs 48-crore loss for the quarter ended June 2008, is likely to take a hit in the second quarter too. “We expect a further loss due to production of polyester stable fibre, which started in October 2008. The second quarter is also expected to be the same (loss-incurring). We see positive results in the third quarter,” Mr Wadia said.

Saturday, September 06, 2008  India-Realestate

FIIs reduce holding in Real Estate cos.

Foreign institutional investors (FIIs) have reduced their holding in real estate companies, particularly Unitech and Parsvnath Developers by over 2 percentage points and by 0.8 percentage point respectively, year-on-year. According to shareholding data available on BSE, the financial institutions and banks have increased their holding in Unitech Ltd by just over 1.5 percentage points, even as the stake of FIIs has come down.

In the case of Parsvnath, there were marginal changes in the institutional shareholding (mutual funds/UTI and financial institutions and banks) within the non-promoter category, even as the ‘individual’ holding rose by just less than a percentage point. “The FII stake in Parsvnath had almost doubled between June 2007 and December 2007, but came down subsequently, in line with market trend,” a market observer said. When it comes to ‘public shareholding’ in Unitech, the stake held by various mutual funds and UTI stood at 0.51 per cent on June 30, 2008 — a tad higher than 0.25 per cent in the year-ago period. According to market sources, while FIIs have trimmed their holding in Unitech, the shares sold by them may have been picked up by private Indian insurance firms.

Saturday, September 06, 2008  India-Realestate

Capital cities witnessing price correction

Due to low liquidity of real estate and high mobility of investor capital, the capital cities are witnessing a price correction. Jaipur in particular has seen a fall of 20% in property prices. “The realty market in Jaipur has hit rock bottom as property prices have come down by 20% in the past one year. We were hoping the festive season to bail us out,” says Atmaram Gupta, a builder. Experts are also of the view that the situation is not going to change unless a big corporate investment comes to the market’s rescue.

“The hike in salary after the sixth pay commission will not have much impact in the market due to inflation. For, small investors already reeling under debts and with the rising price of home loan interest it is more difficult for them to think of new ventures,” says Sunil Jain, a member of Township Developer Association of Rajasthan With each passing day, it’s becoming more difficult to predict the future, he added.

Saturday, September 06, 2008  India-Realestate

Chennai to become world class city by 2026

For the first time, the restriction on Chennai’s vertical growth has been lifted. In a vision for the next 18 years, the city has a new master plan. From now on, the Chennai metropolitan development authority will even permit hundred floors if the building is abutting a hundred feet road. Earlier, a ceiling and only 29 floors were permitted. The Chennai real estate industry is delighted. “This means better lighting, better ventilation, and fantastic designs due to the vertical growth,” said T Chitty Babu, CMD, Akshaya Homes.

Those who live in smaller homes will also be benefited by the city’s master plan. The floor space index or FSI has been altered from 1.5 to 1.75, up to a maximum of 450 square feet. It means that those who have a plot of say 200 square feet could build a house up to 350 square feet on two floors. And there could be more residential areas along the city’s mass rapid transport system, as the FSI has gone up from 1.5 to 2. That means they will have thirty percent more space to build. And ten percent of homes ought to be earmarked for economically weaker sections in all private projects developed in a hectare or above. “Our aim is to provide accommodation to the rising population of the Chennai metropolitan area,” said Susan Mathew, vice chairperson, CMDA. Chennai will soon join the high skyline club of Delhi, Mumbai and Gurgaon to become a world class city.

Saturday, September 06, 2008  India-Realestate

3rd Construction World Awards held

The 3rd Construction World Architect & Builders Awards were held recently in Mumbai. The awards, organized by ASAPP Media Information Group to recognize exceptional work done by Architects and Builders in various aspects of infrastructure and real estate sector, were bestowed by the Governor of Maharashtra His Excellency S C Jamir, to Niranjan Hiranandani, Managing Director of Hiranandani Developers, Milind Korde, Managing Director of Godrej Properties, J C Sharma, Managing Director of Shobha Developers, architects Hafeez Contractor, Noshir Talati, Abhin Alimchandani and I M Kadri among others. A total of ten architects and ten builders were awarded.

The winners, selected through a perception mapping process, were finalized after an exhaustive survey conducted among professionals within the construction and architecture industry. “The highlight of CW Architect & Builder Awards 2008 is that it is recognition and admiration by peers. The awards are given by the industry to the industry. The value of the awards is highlighted by the fact that over three hundred senior representatives from the industry congregated at the ceremony,” says Pratap Padode, Managing Director, ASAPP Media Information Group. Russell Gilchrist from Skidmore, Owings & Merril, designers of Burj Dubai, the tallest building in the world who took a marathon flight from Chicago to be present at the occasion and deliver the key note address gave an insight into how sustainable buildings are engineered, he said, “Sustainable buildings though demand a marginally larger investment in the beginning, turn out to be more cost-effective in the long run, because of energy saving.” Thereafter, he demonstrated through the case study of Pearl River Tower, how it can also be space saving.

Saturday, September 06, 2008  India-Realestate

India to set up new land registration system

A report by India’s Department of Land Resources proposed the setting up of a property registration system in the country, with a registry similar to that in the UK proposed. A system of conclusive titles that will guarantee property titles will be introduced soon, according to the Development Minister, Prasad Singh. This will help to combat the problem of fraud over property exchanges that are growing as the country’s real estate market opens up. A single agency will handle all land titles and records so that true ownership is documented and guaranteed. This will be in contrast to the current system, which merely records transactions. Registration of property in India now only amounts to a certification of the transaction, but it does not ensure the title of the property. Currently, in order to verify the title, a prospective buyer or developer has to do an extensive search through various sources, which is costly and time consuming.

In addition to the land registry, the Department is also computerizing all land records using a Geographic Information System (GIS). This process is under way and will combine the two existing programs into the National Land Records Modernization Programme. This system will digitize all land records and help with numerous other services and businesses, including emergency management, real estate, and banks and credit companies.

Saturday, September 06, 2008  India-Realestate