Project Profiles

Shail Patwardhan had been looking for an apartment to purchase for self use since 2006. But while many developers had launched premium projects that would suit her lifestyle in Gurgaon, where she is part of the senior management of a leading IT company, most were promising delivery about two to three years down the line.

"In a booming market, I could see projects being launched but not much activity on the ground. I wanted a house to live in not to invest in, so I held back." While in 2006 it would have cost her Rs 3,200 per sq ft, she has now paid Rs 4,900 per sq ft. But she does not regret her decision.

"I wanted a house I could occupy immediately on purchase. If I had bought it in 2006 I would have had the pressure of paying the EMIs on the property which was due two years down the line and had to take care of the rental outflow as well. I also feel more comfortable that the house I am buying today is ready and there are no variables on when it will be delivered to me. Therefore, my purchase at this time is a good option."

Patwardhan is not alone in making such decisions. According to Ravi of True Value Homes of Chennai, there is a huge demand for completed property.

Of the 450 apartments in the Central part of the city launched two and a half years ago at Rs 2950 per sq ft xxxx have now been sold at Rs 4750 per sq ft. In the last four months alone he has sold 150 apartments at over Rs 1 crore each. This is despite the slowdown in the market. The buyer, in this case, was the end user, largely businessmen, professionals, corporate executives and even local bureaucrats. However, in his Sriperambudur project he has gone for affordable housing in the Rs 15-25 lakh category.

"Despite the so-called recession we moved 400 apartments by taking token advances of 5-10%. Since, Sriperumbudur is a thickly populated area the number of end users is very high. The property was priced at Rs 2,200 per sq ft and possession is within 18 months."

Suresh Jain of Vijay Shanthi Developers of Chennai, agrees that the end user is active when the property is ready built.

"Everyone was waiting for prices to come down in Chennai but since that has not really happened, end users, who had been watching from the 70-80% completion stage, are concluding deals by the time the property is 85% complete. In the suburbs, they know, the wait is longer for infrastructure to develop and the off-take has been a little slower. But where the properties are in the more affordable ranges, it comes under the end users' scanner once the columns are done. The customer knows that he would get occupancy within 12-15 months. The floor slabs take 4-5 months to complete and the top floor slab is laid within 6 months. The individual client then gets the flat ready for fit-outs. This stage is when the end user is very active."

His decision brought about a revolution in the Terai landscape as the Government State Farm -- later Pantnagar Agriculture University -- cut down forests paving the way for large-scale farming.

As industries have been coming here in droves since 2001, the area's landscape has changed forever. Following setting up of several units at Pantnagar industrial estate, Rudrapur -- the district headquarters of Udham Singh Nagar district -- has gained tremendously.

The economic impact is quite discernible. Its lush green fields have made way for a five-star hotel, malls and branded showrooms, transforming it completely.

When veteran leader Narayan Dutt Tewari was the chief minister of Uttar Pradesh, Pantnagar saw some industrial development but with the Congress losing out, the place went back into oblivion.

• The company will review the situation after three to six months
  
• Five star status for hotel projects

The company is now studying the market conditions and would further re-evaluate the situation and then decide on its future expansion in the retail sector. However, the company said there would be no change in plans on the real estate side and all its projects, including the one connected to the hospitality industry, were proceeding on schedule.

The company had recently got the five star status for its hotel projects in Goa, Ahmedabad and Lucknow that are expected to be in place by 2010-11.

According to a company spokesman, the present adverse market conditions caused by the global financial crisis and the resultant economic slowdown have forced the company to review the retail plans. The development was a temporary phenomenon and had been done after taking into confidence its international partner. "If the condition improves, we would review the situation again in another 3-6 months and take the necessary decision," the spokesman added.

Parsvnath was planning to have 5-10 front-end stores by this fiscal, with an international retail partner supporting the company for logistics. The company's retail plans included, hypermarkets, food joints, and very large retail stores of about 2.5-3 lakh sq. ft. In June, when the company announced its plans to foray into the retail space, it expected a large roll-out number to add to its balance-sheet this fiscal.

Initially, the plans were to roll out stores in Delhi and Mumbai, followed by other cities.

Parsvnath had last year formed a subsidiary, Parsvnath Retail Ltd., for its retail business and has acquired 5.5 million sq. ft. of space across the country.

According to the company, Silver County will feature 200 expandable stand-alone villas with excellent facilities and amazing conveniences to be constructed with an investment outlay of Rs 75 crore.

Further the company claims that each villa will have an earth quake resistant structure and foundations designed for expansion of further one and a half stories. The area of each villa will be 200 sq. yd. with a built-up area of 1150 sq. ft. comprising 2 bedrooms, 1 drawing-dining room, 1 kitchen and 2 bathrooms.

In addition, there will be open space (verandah) both in front and at the backside of each villa.

Other than these facilities, Silver County will also feature world-class facilities at its clubhouse, which will include Swimming Pool, Lawn Tennis Courts, Badminton Courts Pool and Billiards, Health Club, Steam, Sauna and Coffee Shop.

Shares of the company gained 4%, to settle at Rs 5. The total volume of shares traded was 71,687 at the BSE. (Thursday)

The opinion of AG is likely to shape the discussion in the Group of Ministers set up to discuss UP chief minister Mayawati's proposal for an international airport at Greater Noida.

While giving in-principal approval to this project this February -- when Congress and BSP were still UPA allies -- the Cabinet had formed a lawyer-cum-minister GoM to examine the legal aspect of this vis-a-vis the government's pact with GMR Group for modernizing the IGI Airport. This GoM -- comprising of finance minister P Chidambaram, science and technology minister Kapil Sibal, law minister H R Bhardwaj and aviation minister Praful Patel -- had also sought the law ministry's advice. The ministry, in turn, sought the Attorney General's view.

According to sources, Banerjee in his report held that having another airport within 150km of IGI would be violative of the government's agreement with the GMR Group. The Group has been saying that its development plans for IGI -- that will allow the airport to handle 37 million passengers by 2010 and ultimately have a capacity of 100 million by 2026 -- were sufficient to meet the requirement of Delhi and nearby feeder areas like the NCR.

Moreover, the developer has contended that while signing the agreement for IGI it was not told of any second airport coming up for Delhi. The policy at the time was of not allowing two airports within 150km of each other. Keeping all these factors in mind, the AG is learnt to have given an opinion against a second airport for Delhi. This could also have a fallout for Haryana's proposal for another airport and perhaps leave Delhiites with just one functional airport with contractual restrictions on another one coming up, like Bangalore and Hyderabad.

Armed with this report, the GoM is now unlikely to rule in favour of Mayawati's proposal -- especially in wake of the estranged ties between the Congress and BSP now. The Greater Noida airport has been Mayawati's  Sanjiv Rastogi dream for many years.

However, political circles are closely watching Tuesday's GoM meeting for another reason. Mayawati had recently cancelled the 189 acres of land given to build a rail coach factory in Congress president Sonia Gandhi's "karmabhoomi" Rae Bareli. But she restored this land a few days back and now political circles are wondering if Delhi would return the favour. The chances of this remain slim for two reasons -- soured political relations between Congress and BSP and overall fall in traffic. The GMR Group has contended that having two airports at this time would mean none of them is financially strong as traffic would get divided. "Once there is adequate traffic for multiple airports, they can survive. otherwise both will find it hard to survive, just like today's airlines when there are too many planes chasing too few fliers," said an industry insider.

Sahara Prime City, the real estate arm of Sahara India Pariwar, is building the project in Coimbatore as part of what it says will be a vast chain of townships in 217 Indian locations.

Covering 1113 acres, Coimbatore will soon be home to 3,846 new residential units and will feature high-rise and mid-rise apartments, houses and independent bungalows.

Sushanto Roy, head of Sahara's real estate operations, said:

"The township has been planned to set a new standard of luxury and style. The brand Sahara City Homes is intended to provide quality lifestyle with its range of amenities and facilities."

The township will be fully air conditioned and is also designed at one level higher than the applicable seismic zone as an extra safety measure to guard against earthquakes.

Other Sahra townships have already started taking shape with development and construction underway in the cities of Lucknow, Nagpur, Indore, Ahmedabad and Gwalior.

Work is also in progess at sites in Jaipur, Aurangabad, Solapur and Jodhpur.

During the real estate boom, builders expanded extensively by utilising the proceeds of one project to purchase land in other areas and launch new projects. Today, many realty firms are doing away with the construction-linked payment plan and introducing time-linked payment plans for buyers.

This has the danger of not only exposing buyers to a high risk of late delivery but also increasing apartment costs.

This has now led to projects getting stuck midway Realty experts say that a regulatory authori .

ty is therefore the need of the hour to ensure that funds are not diverted for other projects and delivery deadlines are met.

There have been many complaints pending before consumer courts against developers for delay in possession of property, and builders, too, have their own set of grievances. In their defence against the consumer forum, they often cite the mandatory approvals at various stages to be the prime reason for the delay in their projects.

Banks too have been over zealous in financing the real estate projects.

Real estate developers have been hit by the funds shortage. Many banks have stopped overdraft facility and many are not disbursing sanctioned loans.

• DIAL has tweaked the lease plans to accommodate both small and large hotel and realty firms
  
• The consortium's plan to lease 45 acres may not take off as demand for the land has fallen a year after the proposal

The expected fall in land values has prompted at least one financial analyst to downgrade shares of GMR Infrastructure.

In May 2007, the land lease proposal for the same land parcel had seen raising at least Rs2,835 crore in refundable deposits for 28 years and a licence fee that would be determined through bidding for leasing out the land to realty and hospitality firms.

That proposal, however, ran into regulatory hurdles with the civil aviation ministry opposing the fund-raising plan as it was seen as a means to bypass nearly 46% of the airport's revenues that Delhi International Airport Ltd, or DIAL, the company operating the airport, had promised to share with the state-run Airports Authority of India, or AAI.

GMR Infrastructure has nearly 250 acres at the airport and some 1,500 acres at the Hyderabad airport (also developed by a GMR-led consortium) for commercial development.

Being able to realize value from the land banks is key to raising money for airport modernization, given that other avenues such as increasing landing and navigation charges, and passenger fees have been opposed by the ministry, except in Hyderabad, where departing domestic passengers pay Rs375 while international passengers pay Rs1,000 each.

But between 2006, when the land lease plan was first mooted, and now, realty market dynamics have changed drastically with waning demand and soaring construction costs, as also reduced airline traffic at Indian airports as airlines pull back flights hit by steep fuel prices.

A senior government official, who asked not to be named, said GMR was finding it difficult to raise money through the land lease as originally planned. The government, through AAI, owns 26% in DIAL.

In a construction-linked plan, a developer gets payment based on certain construction milestones, and is thereby forced to ensure progress in the project. Under time-linked plan, a developer gets assured money from a home buyer in instalments but is under no obligation to use that money in the same project to deliver homes in time.
It's been a usual business practice for developers to divert sales proceeds from one project to another. During the real estate boom of the past five years, builders expanded massively by routinely using the proceeds of one project to purchase land elsewhere.

Times have changed with the global financial crisis and realty firms are now facing major cash crunch, which is likely to worsen. Therefore, if they were to divert funds from one project to another now, there is a likelihood that some projects may get stuck mid-way, leaving home buyers high and dry.

Much of the new launches by DLF and Unitech this year have not offered construction-linked payment plans.
For instance, DLF's `New Town Heights' and `Express Greens' projects in Gurgaon and Unitech's `Uniworld City' and `Unitech Verve' in greater Noida do not offer construction-linked payment plan, although they give time-linked plan option.

When contacted by ET, DLF and Unitech declined to comment on why they have replaced the option of construction-linked plan with a time-linked payment plan.

DLF spokesperson, however, said time-linked plan is "not a new introduction" for the company. Many other developers are offering time-linked as well as construction-linked plans.

Traditionally, home buyers have had the choice of either paying the full amount upfront or going in for construction-linked plan. Buyers can avail of a discount -- usually up to 10% -- in case of upfront payment, while construction-linked plan gives them a sense of security that the homes they have booked is actually getting built as they pay. But time-linked plan offers neither.

While some developers, including DLF and Unitech, have started offering penalty in case of late delivery, many others do not offer any such reimbursement. The penalty itself is generally Rs 5-7 per sq ft per month to the home buyer.

"The penalty amount is far too less compared to the rentals one pays for the same kind of accommodation," says Raheja Developers chairman Navin Raheja.

Thus, a late delivery imposes additional cost on a home buyer in the form of rentals for the period one has to extend staying in a rented accommodation.

Jones Lang LaSalle Meghraj, in its research report titled, `Greenomics,' states that the Indian construction industry is growing at 10% as compared to the world average of 5.2%, and that the country is expected to develop 110 million sq ft of green space over the next few years. The report focuses on the cost benefit analysis for green buildings. One of the major findings from the analysis is that a green building aiming for LEED (Leadership in Environment and Energy Design) - GOLD certification can recover its additional costs in a payback period of 2-3 years.

Anuj Puri, Chairman and Country Head, Jones Lang LaSalle Meghraj, says, "The challenges faced inherent in the development of green buildings in India are the extra investment in an unstable real estate market scenario, and the difficulty in sourcing green building material and sustainability consultants. Extra investments can be recovered in the medium-to-long term from the non-sustainability discount, which gives green buildings a higher rental value than conventional buildings in their vicinity, and via the carbon credits that can be earned from the reduced GHG emissions."

In short, sustainable development has a triple impact on bottom-line results, as it considers environmental and social development along with economic development. The tangible benefits of green buildings accrue from the operational cost savings, reduced carbon emission credits and high rentals or capital values. Green Buildings are more energy efficient, consume less water and reduce construction waste. The intangible benefits are generated from a healthy living environment and better working conditions within the building.

Most green buildings in India are coming up in Mumbai and Chennai. Mumbai, being India's financial hub, is more preferred by large MNCs, especially financial conglomerates. Similarly, Chennai has seen a tremendous influx of IT and multinational manufacturing firms. The concept of green buildings is gradually catching up in other cities like Kolkata, NCR, Bangalore and Hyderabad.

Though one can buy decent space in NCR, there are few who can afford it and certainly not the middle and salaried classes. Dharuhera seems to be the answer. With bigger and better prospects for residential, commercial and industrial property development due to comparatively low cost of land rates, industry leaders like Parsvanath, Ansal (API), M2K, Tivoli, SNG, BCPL-Vardhman and many others have already started to cash in on the situation. And their target is the segment that simply cannot afford the Rs 50-65 lakh, 2/3 bedroom flats in Gurgaon and Noida.

One of the latest developments in Dharuhera after Omaxe and Parsvanath is initiated by BCPL-Vardhman, which is coming up with a housing project, Woodscapes. "Based on residential needs in our country, these flats will be affordable with all features required for a modern lifestyle. This is the idea behind Woodscapes, Dharuhera," observed its chairman, Rajendra Jain.

Designed by renowned architect Hafeez Contractor, Piyush Group's `Global i' has been designed on an eco-friendly pattern and provides for an infrastructure platform that is customized to meet all the needs of the IT industry. Apart from state-of-the-art offices, this IT unit of Piyush Group also boasts a 3 level basement parking system, a spacious cafeteria as well as a health club and spa.

"We are also planning to set-up five well-equipped Service Rooms within the park so that visiting guests of the tenant companies have a comfortable place to stay." Mr. Goel added. A 12% return on investment has also been assured for 9 years to attract more investors for this project.

As such, the RBI has cancelled the certificate of registration of Sahara India Investment Corporation Limited with effect from 11 August 2008, for carrying on the business of a non-banking financial institution in terms of section 45-IA (6) of the Reserve Bank of India Act, 1934, the RBI said in a release.

This will, however, not affect the business of Sahara India Financial Corporation, the flagship company of the group involved in fund-based activities.

Spokesperson of Sahara India said that the group exited from non-banking business and decided to enter the real estate business.

Sahara India has been under the RBI scanner for some time now over lack of conformity with rules in its insurance business.

Sahara India Investment Corporation, which is one of the group companies of the Lucknow-based Sahara group, cannot transact the business of a non-banking financial institution, the release further said.

Sahara Prime City Limited, the real estate arm of Sahara India Pariwar, has announced the launch of its flagship brand 'Sahara City Homes' in Coimbatore. The project is a part a chain of townships proposed to be developed in 217 cities across the country. Sahara City Homes, Coimbatore is the second project of Sahara group to be launched in south India, after the launch of Sahara Grace - brand of residential complex at Kochi, in April 2008.

FoxMandal Little (FML) advised Vornado on finalising the joint venture agreement along with ancillary documentation of the joint venture company.

FML also negotiated with Reliance Industries' lawyers on the structure and operations of the joint venture company as well as finalising the closing requirements for the transaction.

Sahara City Homes, Ahmedabad plans to house one to five bedrooms residential units in the category of high-rise and mid-rise apartments, independent row houses, penthouses and independent bungalows. The township aims to provide a good community living to the people of Ahmedabad by offering amenities such as club and community center, hospital, shopping mall and multiplex, school, hotel and club, uninterrupted power and water supply, multilevel security, retirement home, local transport and Central park. Playground equipped with floodlights will be the special feature of Sahara City Homes, Ahmedabad.

Every essential service like Convenience Stores, Banking and Postal services etc. will ensure convenience for the residents. A Service Center just a call away will take care of all Plumbing, Electrical Repair and Taxi requirements. A combination of AC and Non-AC buses would provide good commuting facilities.

The project, with saleable area of more than 400,000 sq ft, is to be completed by the end of 2011, it said in a statement.

The company plans to invest over Rs 3,500 crore on development of mall over next four years.

The company has identified locations at Kolkata, Chennai and Visakhapatnam, for mall development during the first phase. The company proposes to build 15 malls, each at a cost of about Rs 200 crore.

In the first phase, the company will roll out a total of 20 million sq. feet of retail space at the three locations with an estimated cost of Rs 630 crore.

According to sources, the company is presently in talks with leading international mall development firms to manage the three properties and the partner may also be a co-investor.

Shriram Properties is engaged in the property development business in South India. The firm develops residential housing and apartments, information technology parks, and auto parks.

Recently, the company has bought a 90-acre property in Vizag, to develop an integrated township.

"MSL envisages to invest 200 mn dollar in real estate projects in the national capital region and Coimbatore in mix use complexes, IT parks, residential and commercial areas in the next 12 months," MSL Managing Director Ashish Bhalla said.

The company also announced the launch of Spire Edge, an IT Park in Manesar near the national capital.

Spire Edge, a 50:50 joint venture between MSL and A N Buildwell, is likely to be completed in next three years, Bhalla said.

"We will invest 20 mn dollar in the Rs 400 crore Spire Edge project in which money would also be raised from overseas (if required) apart from the investment of promoters," he said.

The IT park will be spread over 1.6 mn square feet of scalable eco-office complex with an energy saving capacity up to 30 per cent.

The company envisages to invest up to one bn dollar in the next four years in the realty sector and would build university-based townships.

"We have much larger plans. We are in talks with various state governments as we want to set up projects in public-private-partnership mode including setting up university based townships," he said.

The company also unveiled 'Spire World', its maiden platform to 'drive development of mainstream green projects.

Under this agreement, Plaza will acquire from EI a 47.5% stake in Elbit India Real Estate Holdings, a JV owned by the Israeli firm in India. Elbit India Real Estate holds equity between 50% and 80% in three mixed-use projects in India, in conjunction with local Indian partners. EI and Plaza shall have equal voting rights in the JV company, EI informed to the Tel Aviv stock exchange.

The UK firm will pay a nominal amount to the JV for the 47.5% shareholding, plus $126 million to EI reflecting 50% of all loans and financing granted to date to the JV by EI. The loans and financing were used to purchase the plots of land and for other associated costs related to the JV's real estate activities.

The three projects -- located in Bangalore, Chennai and Cochin -- will have a total combined development budget of around $3.4 billion and a built-up area in excess of 3.8 million sqm. (excluding parking spaces).

In Bangalore, Elbit India Real Estate owns 50% equity holding in a mixed-use project with a prominent local developer. The project is located on the eastern side of Bangalore. With a total built area of over 2.1 million sq m, the project will comprise luxury residential units (villas and multi-level), office complexes, a major retail facility, hotel complex, hospital, golf course, club houses and ancillary amenity facilities.

In Chennai, the Israeli firm owns a mixed-use development, 80% is owned by the JV and 20% by a local developer, who is developing a high-quality residential units, a local retail facility and an office complex with a total built area of 1.1 million sqm. Similarly, in Cochin, Elbit has a 50:50 partnership with a prominent local developer for a high-end residential apartment buildings, office complexes, a hotel and serviced apartments complex, retail area and a marina.

The JV will also look for further development opportunities for large scale mixed-use projects, predominantly led by either residential, office or hotel schemes.

DLF
 Aprominent player in the National Capital Region (NCR), DLF is the largest listed realty company in India. Besides being present in homes, offices and shopping mall segments, it has added hotels, infrastructure and special economic zones (SEZs) divisions to its portfolio.

Business: With land reserves of over 16,000 acres spread across 32 cities, the company has delivered 224 million sq feet of completed development since 1949. While residential projects contribute around 65% to its revenue, retail and commercial projects account for the remaining 35%.

After dominating the luxury housing market, the company has now shifted its focus to mid-income housing projects. DLF plans to shift the focus of its product portfolio from residential to commercial and retail projects. Around 46% of future development is expected to take place in metros (Chennai, Bangalore and Kolkata) and another 33% in super metros (Delhi and Mumbai). This will help in maintaining its premium pricing policy.

FINANCIALS: DLF has shown phenomenal growth in sales, as well as profit. With the real estate industry growing at 30%, DLF has been one of the star performers in this sector. Its sales have witnessed a compound annual growth rate (CAGR) of more than 95% over the past three years, while its net profit has seen an over threefold growth during the same period. However, it needs to be noted that sales growth is largely on account of increasing receivables.

The company has a strong asset portfolio with accruing leasing income. Tax sops in IT SEZs make them most lucrative for builders. DLF is expected to benefit significantly, as it has more than 20 million sq ft under IT-SEZ construction. Also, the company will not be able to maintain its premium price when more projects come onstream in the NCR, its core region of operation.

FOREIGN FUNDING: Foreign players find it worthwhile to buy small stakes in individual projects of large developers in India, rather than buying out companies. DLF has managed to secure Rs 1,675 crore of private equity (PE) in seven of its group housing/township projects. Around 49% of its stake was diluted in favour of Merrill Lynch and Brahma Investments in the beginning of this year.

This came at a time when the real estate industry was going through a bad phase. Though small developers are still finding it difficult to finance their projects, DLF seems insulated from this risk by its sheer size in the industry. The company also plans to list its real estate investment trust (REIT) in FY09 and raise funds to finance DLF Assets (DAL)'s purchases.

GROWTH DRIVERS: The trend in the real estate industry has changed from amassing land banks to exhibiting delivery capability. DLF has entered into several strategic tie-ups with international companies. The list includes Lang O'Rourke for construction, WSP for design and engineering, Feedback Ventures for project management, and Dubai-based Nakheel for SEZ development.
A key catalyst for the company will be DAL's ability to consistently raise funds to buy commercial assets from DLF. With the shift in the company's focus to commercial and office segments, this can also be made available for listing through a REIT, once DLF gets regulatory approval.

RISKS: The company currently has large projects under execution. Timely delivery of these projects will be a key concern. Moreover, on the financials' side, the company has a high level of receivables that may impact its cash flows, which are stretched as of now. Also, delay in raising funds for DAL can impact DLF's topline in future.

OUR TAKE: DLF's strong record of delivery schedule and its scale of operations are proof of its operational capability. Moreover, the low debt on DLF's balance sheet makes it a much safer bet for long-term investors who can take advantage of growth in the domestic real estate sector.

Beta: 1.22
Institutional Holding: 6.55%
Dividend Yield: 0.36%
P/E: 30.47
M-Cap : Rs 82,105 cr
CMP: Rs 484.90

The realtor is in talks with at least five private equity funds, including Saffron India Real Estate Fund, which has taken a 15% stake in Parsvnath's subsidiary for the Rs 620 crore project near the Bandra Kurla complex in Mumbai.

"Everything related to the stake dilution for the SEZ project is done, and we expect to make a formal announcement within a month," Parsvnath chairman Pradeep Jain told DNA Money.

However, Parsvnath neither provided the financial details of the stake sale nor did it give the names of the equity funds.

"We are not facing any cash crunch," Jain said, dismissing speculation that the company is selling stakes in these projects to tide over liquidity issues. The company's current net debt stands at

Rs 1,700 crore and the highest rate of interest at which the company has borrowed funds is 12.9%, he said.

Parsvnath will develop 15 SEZs in 10 states over 10 years. These will cover an area of 4,000 acres and involve an expenditure of over Rs 60,000 crore, says the company's website.

The projects would include seven IT & ITeS SEZs, two for gems & jewellery and one each for multi-product, food processing, leather & leather products, handicraft, automotive & auto component, and biotechnology.

Meanwhile, Parsvnath posted a 27% decline in its first-quarter net profit at Rs 73.97 crore from Rs 102 crore a year earlier. Sales fell to Rs 381 crore from Rs 414 crore.

"Global Logistix stands to play an integral part in Navi Mumbai. The economic conditions in India are perfect at the moment to support such an initiative," BNA quoted KCB chief executive Ebrahim H. Ebrahim as saying in a statement.

"We are looking forward to sustaining this important endeavour as it will aid the infrastructure and logistics industry development that is sorely needed in that region of the world," he added.

The project is a logistics-focussed real estate development comprising an integrated logistics park on 400 acres of land.

The initial development projects supported by this investment fund will include construction of warehouses, control building, maintenance depots, staff accommodation, parking areas and various other amenities.

All signs point to a typical credit crisis. The perceived risk-reward equation for investing in the domestic realty market is turning awry and seems likely to keep foreign investors at bay, at least in the near future. Following the global cash crunch, one of the major causes of concern for established and emerging real estate firms is to organise financing for ongoing, as well as upcoming projects.

The bloodbath in the stock market has impacted the Indian real estate sector, as a majority of large developers are now finding it difficult to complete ongoing projects. Their shares have tumbled after the RBI's decision not to cut interest rates. Share prices of most listed real estate firms, for instance, fell by nearly 50% from their 52-week highs and are seeing a bearish trend; I fear a further downslide by the time this article goes to print.

The dismal situation in the real estate market is, in fact, reflected in the Asia-Pacific region as well. Indiabulls Real Estate is performing below expectations, while Unitech has had to put on hold its IPO plans for its real estate investment trust (REIT) in Singapore. With the current situation not likely to change very soon, DLF has also delayed its plans for a Singapore REIT listing.

On the domestic front, the Reserve Bank of India (RBI) has declared the real estate space a sensitive sector under its prudential norms. In tune with the rising cost of funds and the need for additional capital for risky assets, banks in India have increased their lending rates for real estate projects. The prime lending rate (PLR) of most public sector banks is in the 12.25-12.75% band, in comparison with last year's rate of 10%. Since banks have to set aside a comparatively higher amount of capital for real estate exposure, compared to other sectors, the sector attracts higher risk weightages and lending becomes closely monitored. Banks have also begun to ask for higher contributions from promoters and developers as a precautionary measure to safeguard themselves against loans. Given the inflationary squeeze that the current government is facing, it is likely that monetary policies will put more pressure on already-high interest rates. That, by no means, is good news.

According to the sectoral deployment data issued by the RBI in the first quarter, the banking sector lent Rs 53,897 crore to the real estate sector as of February 15, 2008. Year-on-year growth in credit deployment for the current period stood at 26.7% (Rs 17,361 crore) as against 79% (Rs 18,770 crore) a year earlier. Credit deployment in the housing sector too decelerated from 25.8% last year to 12% in the current period.

Through equity route, at project level, the company plans to raise $350 million for its hotel venture and will also raise an additional $800 million for various commercial projects that it is executing in Mumbai, Sanjay Chandra, managing director, Unitech Ltd said on Friday

The announcement comes at a time when a spike in inflation and rising interest rates have taken the sheen off the real estate sector and made investors wary of it.

Unitech, Chandra said, is setting up 35 hotels under various subsidiaries. Of this, 15 hotels would be clubbed together under one company for the achieving financial closure. "In the first phase, we are putting up 15 hotels with 2300 rooms at different locations. These would be three star and five star properties," he said.

The company is expanding aggressively in Mumbai in the residential and commercial segments through a joint venture route. In the next two years, Mumbai region is expected to contribute about Rs 3000 crore in revenues, which should be around 50 per cent of the company's total income, Chandra said.

The company is in discussion with strategic partners for diluting 26 per cent stake in its telecom arm to a strategic foreign partner. "We are looking for a minority dilution of 26 per cent stake to a strategic foreign player in Unitech Wireless," Chandra said.

The grade A developers which are facing crash crunch include DLF, MGF Emaar, Shobha Developers, Unitech, Omaxe, Parsvnath Developers, Hiranandani Group, Ansal API, BPTP Developers and TDI Group.

As a result of the crash crunch many developers have started going slow or even stopped construction of projects which are either in their initial stages of development or which would not affect their bottomline in the near future. While most developers that SundayET spoke to, agreed with the problem at hand, none of them were ready to be quoted on how it had affected them.

"There are visible signs that the global liquidity crunch has started to impact real estate companies in India. It is becoming extremely difficult for both small and large realty companies to organise financing, given the global liquidity crisis. The recent slowdown in demand, high interest rates, rising input costs and meltdown of realty stocks have only added to their problems. The real estate companies are in dire need for credit and other sources of capital to complete projects at hand and also to sustain their expansion plans. Some companies are able to access capital, albeit at very high costs, which in the long run may not be a sustainable solution, especially given the size of the market and consequent need for large chunks of capital," says Cushman & Wakefield executive MD (South Asia) Sanjay Verma.

The proposed network, for instance, will enable trains to cover the Mumbai-Ahmedabad distance and Delhi-Amritsar distance in just two hours.

"New commercial and residential constructions along the west-west corridor -- Ahmedabad, Anand, Vadodara, Surat and Mumbai -- and the north-north corridor -- Jaipur, Gurgaon, Delhi, Sonepat, Ludhiana, Jalandhar and Amritsar -- may have to pay a cess to avail high-speed train facility. The third corridor under consideration is Chennai-Bangalore," a senior Rail Bhawan official said.

However, the cess would be levied on upcoming properties only. All the three high-speed rail corridors would be constructed on the public-private-partnership (PPP) model.

"As operating margins may not be big enough to cover debt servicing, there is a valid case for funding part of the debt from sources other than the fare-box revenues," the official said.

 A feasibility study has been done by RITES on the Ahmedabad-Mumbai stretch. These rail systems have also generated significant interest among rail engineering companies in the world. Significantly, several leading companies with experience in building high-speed rail systems have sent their top executives to India.

Chairman of Taiwan High Speed Rail Corporation, Nita Ing, recently met top railway officials recently to discuss bullet trains for India.

High-speed trains take only a sixth of per seat energy consumption and emit carbon dioxide that is only 10% of aeroplanes. The idea of having such trains in India was mooted in 1969-70. Due to cost constraints the project remained on shelves for years till rail minister Lalu Prasad revived it in the 2007 budget.

This follows Unitech's decision to put on hold $1.5-billion qualified institutional placement (QIP), and Emaar MGF's initial public offer (IPO), which was withdrawn midway. Industry insiders says the delay in fundraising plans is unlikely to have any immediate impact on earnings.

"We are waiting for the market to stabilise before we go in for private placement. We may not get the right valuation in the present situation," Omaxe executive director Vipin Aggarwal told ET. Omaxe had originally planned to raise Rs 1,500 crore by issuing fresh equity to institutional investors.

The company intended to use the sale proceeds to buy land. "The stake sold through this process could have been close to 15%," said Mr Aggarwal. At this rate, the transactions could have given Omaxe a valuation of Rs 10,000 crore, close to the company's market capitalisation during mid-December.

The Omaxe stock price had touched a high of Rs 613 on December 13, 2007, on BSE. It has lost almost two-thirds of its market cap since then. Omaxe scrip closed at Rs 221.60 on Wednesday on BSE, 5% down from the previous day's close.

The promoters -- Rohtas Goel and family -- hold 89.3% stake in the company. Last December, the promoters pledged their 15% stake to Indiabulls for Rs 300 crore.

"Compared to stocks and gold, which are more liquid investments, real estate is illiquid," said Anuj Puri, chairman and country head, Jones Lange LaSalle-Meghraj. "Investors with portfolios comprising both stocks and real estate could suffer a slight impact, as some investors might want to offload a part of their real estate holdings to offset losses. However, this category of investors is small."

Some analysts see the current fall as a buying opportunity. "About 10 to 20 per cent of an investor's portfolio should be in a more stable asset such as real estate," said Parry Singh, managing director, Red Fort Capital, a private equity real estate firm that launched a Rs 1,000crore fund on January 9. "So apart from development, investment in land is a good option. Besides, the correction in the market offers a good opportunity to buy stocks of listed real estate companies at more affordable prices."

On listed realty companies, however, the going may just get tougher. "This fall will prevent investors from investing huge amounts in the up coming initial public offers of real estate companies," said Sandeep Singh, vice president and national head (capital markets group), Cushman & Wakefield. "But, the fall will also enable investors to move towards a more stable and long-term avenue like realty."

A long time horizon will also help investors survive real estate. "If the purchase is made for investment purpose, only long-term investors survive in such a situation," said Anirudha Joshi, executive director, HIRCO, the investment arm of Mumbai-based construction major, Hiranandani Group.

The registration of independent floor properties in Gurgaon is banned for the last 6 years causing sufferings to thousands of people.

People have bought the following independent floors from all big builders of Gurgaon, hence government must open the registration:

Ansals Viceroy Luxury, Palam Vihar Gurgaon
Ansals Happy Homes, Palam Vihar, Gurgaon
Ansals Spanish Terraces, Palam Vihar Gurgaon
Ansals Palm Homes, Palam Vihar, Gurgaon
Ansals Flexi Homes, Sushant Lok-II & III, Gurgaon
Ansals Royal Casa, Sushant Lok-II, Gurgaon
Ansals Silver Crest, Sushant Lok-III, Gurgaon
Ansals Sushant Floors, Sushant Lok-II, Gurgaon
Ansals Designer Floors, Sushant Lok, Gurgaon
Ansals Executive Residency Floors, Sushant Lok-II, Gurgaon
Ansals Royal Residency Floors, Sushant Lok-II & III, Gurgaon
Ansals Shalimar Residency Floors, Sushant Lok, Gurgaon
Cosmos Executive Floors, Palam Vihar, Gurgaon
Cosmos Designer Floors, Palam Vihar, Gurgaon
Cosmos Designer Floors, Mayfield Garden, Gurgaon
Cosmos Floors, Ardee City, Gurgaon
DLF Exclusive Floors, DLF Phase-V, Gurgaon
DLF phase-I, II, III and IV all have many independent floors
Essel Group Suncity Mega Floors (close to DLF Golf Club), Gurgaon
Essel Group Suncity Exclusive Floors (close to DLF Golf Club), Gurgaon
M2K Aura, Sector 47, Gurgaon
Omaxe Mayfield Garden Independent Floors, Sector 51, Gurgaon
Omaxe Executive Floors, Sun City, Gurgaon
Parsavnath Platinum Independent Floors, Ardee City, Gurgaon
Parsavnath The Presidency Floors, Ardee City, Gurgaon
SS Group Southend Floors
Todays Blossoms I, Ardee City, Gurgaon
Todays Blossoms II, Ardee City, Gurgaon
Todays Luxotica, Sector 47, Gurgaon
Unitech Singleton Floors, South City, Gurgaon
Unitech Executive Floors, Gurgaon, South City-II, Gurgaon
Unitech South City-I also has many independent floors
Vatika City builder floors, Gurgaon
Vipuls Orchid Floors, Ardee City, Gurgaon

Real estate company Omaxe Ltd has decided to develop properties overseas in places such as Dubai in the United Arab Emirates (UAE) as the real estate market in India starts to cool and profits get squeezed.
The developer plans to build commercial and residential properties in Dubai.

"Last year was very bad for developers," Rohtas Goel, chairman and managing director, Omaxe, said. "Prices declined by 10% and even by 30% in some locations, which has forced developers to look at overseas markets for expansion," he added.

The company has decided to enter the Dubai real estate market as the average yearly return on an investment in Dubai is slightly better than in India, Goel said. "It is also easier to do real estate business in Dubai compared to India," he added.

Omaxe wi