Alok Inds plans to exit real estate business

MUMBAI: Alok Industries, a Rs 3,000-crore integrated textile manufacturer, is looking to exit the real estate business  and offload stakes in international retail subsidiaries. With this, the Alok group plans to raise around Rs 1,200 crore, which will go towards repaying its debt in the next two years, according to a person close to the development. The group has debt of about Rs 6,600 crore on its balance sheet, as on March 2009.

for detail visit – Economics Times

Affordable housing to play a key role in 2010, says CREDAI

MUMBAI: Affordable housing segment is set to play a key role in India’s real estate sector in 2010 on the back of a significant pick up in demand, a top industry body has said.

“Affordable housing will be a key factor in driving the sector and we have already started working on progressive solutions in this area for effective and customized implementation of such projects,” Confederation of Real Estate Developers’ Associations of India (CREDAI) Chairman Kumar Gera said.

for more detail visit – Economics Times

Now, buy prime office space for just Rs 5 lakh

MUMBAI: Here is your chance to own a slice of office property at Nariman Point by investing just Rs 5 lakh. The 30-40% decline in property prices coupled with firming interest rates have resulted in private equity (PE) funds eyeing investment
opportunities in real estate rental space. A few fund houses have already begun seeking investment commitments from investors, indicating 16% to 22% as annualised portfolio returns.

PE funds investing in real estate rental space follow a simple investment strategy. These funds are suited for investors who are risk-averse and prefer returns similar to those from fixed income schemes. According to PE industry officials, Milestone Capital Advisors, Xander Real Estate Partners, Indiareit Fund Advisors and an investment arm of Delhi-based real estate company DLF are planning to launch rental yield funds in India.

“Real estate rental funds are launched when property rates are close to their troughs. This helps funds to buy property at lower prices. Moreover, yields of investments increase in a rising interest rate environment,” said Ashish Joshi, managing partner, Milestone Capital Advisors, which raised money for a second fund investing in rental assets.

A ‘rental yield PE fund’ only invests in properties that are either occupied or under long-term lease or rent. In simple terms, the money collected from investors is used to buy out the property from the current owner. Once the property is acquired, the PE fund becomes eligible to receive rent from tenants. The rent portion is restructured or re-negotiated regularly in order to meet the return profile of the investor. The fund (and its investors) gain by way of rent recovery and appreciation in property prices. PE funds, normally, invest in commercial property. The managers route a major chunk of the pool into office properties and the remaining into IT/ITeS parks, shopping malls and warehouses.

source – http://economictimes.indiatimes.com/Now-buy-prime-office-space-for-just-Rs-5-lakh/articleshow/5367854.cms

india property one of best investments for forseeable future

India property is one of the top 3 investments in the world for 2010 and for the foreseeable future according to experts.

Liam Bailey of sector specialist copywriting company Write About Property wrote in a recent article:

“I would have liked to have included India [in the top 10 investments for 2010] as well, which is forecast by the International Monetary Fund — among the most pessimistic of bodies — to grow by 5.4% this year and 6.4% next year. India has among the largest populations in the world, and among the fastest growing middle classes. Buying into an affordable housing development, either buying a property, multiple properties or as venture capital is not only one of the top 3 property investments for 2010, but for the foreseeable future.”

India has potentially the hottest property market in the world, because of just how densely populated it is. Being densely populated alone would be a bad thing, but as more of the population becomes affluent enough to see accommodation of their own, the splitting of households is generating more demand for property than the country has physical room to build.

Those fortunate enough to get a property in an upcoming area at a bargain price, will make unbelievable rental yields, and see significant capital growth as space to build and demand continue to increase.

Property in Mumbai and other areas got more and more expensive as more and more people realised what the future holds, but there are plenty of new upcoming towns and cities to get in at entry level.

source – http://www.property-abroad.com/india/news-story/india-property-one-of-best-investments-for-forseeable-future-19316643/

DB Hospitality to invest Rs 5,500 cr to build 9 hotels by 2014

MUMBAI: DB Hospitality, part of the Mumbai- based real estate developer DB Group, will invest around Rs 5,500 crore to build nine hotels across
India by 2014, a top company official said.

“We plan to have a minimum of 12 properties by 2014. We plan to set up nine more hotels by then at an investment of Rs 5,500-crore,” DB Hospitality’s CEO Julian Groom told PTI here.

The company has three properties–Le Royal Meridien in Mumbai, Le Meridien in Ahmedabad and one property in Rajasthan, currently shut down for refurbishment.

Groom said the company has tied-up with Hyatt International to set up five hotels–Park Hyatt (125-storeyed iconic India Tower) in Mumbai, Grand Hyatt in Goa and Pune, Hyatt Place in Hinjewadi, Pune and Hyatt Place in Mundra, Gujarat.

Besides, the company is setting up four hotels in Delhi’s hospitality district, expected to be ready by end-2013.

The company is eyeing private equity investment to part-fund its expansion and is already in talks with a few firms, he said, without, however, disclosing further details.

“We will fund the remaining requirements through internal accruals and bank-loans,” Groom said.s
source – http://economictimes.indiatimes.com/news/news-by-industry/services/hotels-/-restaurants/DB-Hospitality-to-invest-Rs-5500-cr-to-build-9-hotels-by-2014/articleshow/5358807.cms

Hyatt to Launch 5 New Hotels in India

Chicago-based Hyatt Hotels Corp and the Indian real estate developer DB Hospitality Pvt. Ltd., part of DB Group, announced yesterday that Hyatt will operate five new hotel properties in India between 2010 and 2014.

The properties to come up include- Park Hyatt Mumbai, Grand Hyatt Goa, Grand Hyatt Pune, Hyatt Place Pune and Hyatt Place Mundra.

DB Hospitality will develop and own the properties, which will be in major business centers and Hyatt will manage them.With this decision, the global hospitality company seeks to expand its footprint in what it feels is the world’s most vibrant emerging market.

“The introduction of five new Hyatt properties in India, one of the world’s most vibrant emerging markets, illustrates our commitment to expanding our global footprint,” said Ratnesh Verma, senior vice president of real estate and development for Hyatt. “We are excited to provide our guests with access to our world-class, preferred brands in these increasingly popular markets in India.”

Hyatt has operated properties in India since 1983. Currently, Hyatt manages five hotels in India, including Park Hyatt Goa Resort and Spa, Grand Hyatt Mumbai, Hyatt Regency Mumbai, Hyatt Regency Delhi, and Hyatt Regency Kolkata.

The five new Hyatt properties will include:

• Park Hyatt Mumbai, projected to open in the first quarter of 2014, will include 255 guest rooms and 55 serviced apartments. The hotel will be part of the iconic 125-story India Tower located on Marine Lines in South Mumbai. Foster and Partners, London has been selected as the leading designers for this full-service hotel, which will include exclusive banqueting and meeting facilities.
• Grand Hyatt Goa, under construction and projected to open in the third quarter of 2010, will include 314 guest rooms. The hotel will be located in “Aldeia de Goa,” a 140-acre mixed-use development in North Goa that features a half-mile beachfront and excellent views of the Zuari River. The hotel, which will feature approximately 35,000 sq. ft. in banquet and meeting facilities, will also include extensive dining and entertainment options.
• Grand Hyatt Pune, projected to open in the third quarter of 2011, will include 325 rooms and multiple dining, recreation, banquet, and meeting facilities. The hotel will be part of the “Orchid Centre” development and in close proximity to the Pune Golf Course and other major commercial developments.
• Hyatt Place Pune, projected to open in the first quarter of 2012, will include 130 rooms, a multi-cuisine restaurant, meeting facilities, a fitness center and a pool. The hotel will be located within the Rajiv Gandhi Infotech Park at Hinjewadi, a prominent software hub.
• Hyatt Place Mundra, projected to open in the third quarter of 2013, will comprise of 150 rooms, a multi-cuisine restaurant, meeting facilities, a fitness center and a pool. The hotel will be located in the Special Economic Zone at the Mundra Port, which is the largest private and multi-product port in India.
  • source – http://www.indianwineacademy.com/item_5_353.aspx

DLF board approves plan to absorb DLF Assets

MUMBAI: DLF Ltd, India’s largest listed developer, said on Wednesday its board had approved absorbing DLF Assets, owned by the founders of DLF,
in a cachless transation DLF Assets, which operates rental assets and owns a property trust, is reviving plans for a Singapore listing of its real estate investment trust, DLF Property Trust, aiming to raise between $500 million to $1 billion, sources told Reuters on Tuesday.

DLF will take over DLF Assets by merging the latter’s holding firm, Caraf Builders and Constructions Pvt Ltd, with DLF Cyber City Developers, a wholly-owned unit of DLF, it said in a statement to the stock exchanges. As a result, DLF’s founders, who now own all of Caraf, will get a 40 percent stake in the merged company, under a cashless deal.

The company did not assign any financial value to the deal. It was advised on the transaction by Kotak Mahindra Capital and Enam Securities, and Citigroup gave a fairness opinion on the exchange ratio.

DLF said the deal was aimed at consolidating rental assets and boosting cash flows, removing perceived conflicts of interest between promoter firms and the company, and enhancing the potential of various rental assets.

Caraf and its units owns four rent-yielding properties with total leased area of 3.3 million sq ft. DLF Assets owns four special economic zone (SEZ) properties with leased area of 6.4 million sq ft, and DLF Cyber City operates 6.7 million sq ft of built out space across commercial buildings and malls.

DLF’s founders raised $783 million by selling shares earlier this year to inject capital into the property trust and also to buy private equity firm D.E. Shaw’s stake. At noon, shares in DLF, valued by the market at about $14 billion, were down 0.2 at Rs 380.40 in BSE that was down 0.1 percent.

source – http://economictimes.indiatimes.com/markets/real-estate/news-/DLF-board-approves-plan-to-absorb-DLF-Assets/articleshow/5343044.cms

Godrej Property sets issue price at Rs 490/sh

After receiving lukewarm response from retail and non-institutional investors, Mumbai based Godrej Properties has fixed the issue price at Rs 490 per share, at lower end of price band of Rs 490-530. Maximum bids came in at Rs 490 per share on the last day.

The IPO (initial public offering) of 9,429,750 equity shares of Rs 10 each was opened during December 9-11, 2009 and was subscribed four times, as per data available on the NSE website. The major support was seen from qualified institutional investors; their reserved portion got subscribed 7.45 times. Retail and non-institutional investors’ portion remained undersubscribed.

The company has collected over Rs 460 crore from this issue. It had already received commitment from anchor investors and collected nearly Rs.90 crore fromthem at Rs 530 per share.

The issue constituted 13.5% of the post issue paid-up capital of the company. Parent company, Godrej Industries currently holds 80.26% of equity share capital in the company.

It is in the business of real estate development in India. It currently has real estate development projects in 10 cities in India, which are at various stages of development.

The proceeds of the issue will be used for acquisition of land development rights for forthcoming projects; construction of forthcoming project and repayment of loans. In an IPO press conference, the company said would use 30% of IPO funds to repay debt.

The company has land reserves of 391.04 acres, developable area of 82.74 million sqft and saleable area of 50.21 million sqft (including 27 million sqft in Ahmedabad).

Global Co-ordinators and book running lead managers to the issue were ICICI Securities Limited and Kotak Mahindra Capital Company Limited. The book running lead managers to the issue were IDFC – SSKI Limited and Nomura Financial Advisory & Securities (India) Private Limited. Karvy Computershare Private Limited was the registrar.

source – http://www.moneycontrol.com/news/ipo-issues-open/godrej-prop-sets-issue-price-at-rs-490sh_430562.html

Mumbai’s property outlook still strong

IF YOU think the Mumbai terror attacks had sowed seeds of doubt in investors looking at that city, think again.

In a survey titled Emerging Trends in Real Estate Asia Pacific released by Pricewaterhouse Coopers (PwC) and the Urban Land Institute (ULI) on Dec 8, Shanghai, Mumbai and New Delhi finished first, second and fourth in that order when it came to development prospects.

Mumbai and New Delhi along with Bangalore also figured in the list of cities which have good investment prospects – eighth, 10th and 14th respectively. Singapore scored higher in investment prospects, coming in fifth, while it took the 11th spot in development prospects.

The survey was done after a series of one-on-one interviews with people who move the real estate industry. Here’s a look at how the three Indian cities fared.

source – http://business.asiaone.com/Business/My%2BMoney/Property/Story/A1Story20091211-185293.html

Mumbai’s property outlook still strong