Project Profiles

Development of as many as 17 new sectors, including 11 residential sectors, is on the cards.

Though the residents here appear to be dissatisfied with the growth of the planned residential areas (sectors) in the city over the past few decades, it is perhaps the first time that the Haryana Urban Development Authority (HUDA), which has been the main agency for carving out such pockets in urban areas in Haryana, has announced its plan to develop as many as eight new sectors in the next couple of years.

The city has, at present, just five residential sectors, out of which four are inhabited, while the fifth is being developed, and plots have already been allotted there. The prices of property in the city and its adjoining areas have gone up manifold in nearly all the colonies due to an increased demand as the city is just about 60 km from Delhi, and investors anticipate good appreciation in property prices in the next few years, said an official of the district Town and Country Planning Department.

Admitting that the development of the residential colonies by private persons in the past few decades had been a matter of concern as many of these lack the basic facilities, including proper roads, sewerage, streetlights and space for parks, the officials have claimed that sectors developed by HUDA were equipped with the required amenities, and there was hardly any chance of violation of norms. The property market in the city picked momentum in late 2004 when real estate saw a nationwide boom. In 2005 when the Congress came to power in the state, Rohtak got the status of CM (Chief Minister) city and the much-needed boost on the economic front.

Source: The Tribune On Road To Boom : Rohtak Among The Most Promising Cities In Haryana For Investment in Real Estate

Interestingly, the area around Pataudi might soon be in the news (not just for Roberts's visit) for the development plans slated to take off here.
On offer: Several residential units coming up in the new Gurgaon sectors, the logistics park, SEZs and a commercial sector. Adding to this are the government's plans to upgrade infrastructure facilities along the belt.

INFRASTRUCTURE Better days are ahead for Pataudi Road, which might be widened to 135 m. The sector roads too would be at least 60 m wide. Each sector will be equipped with a substation and have planned sewage facilities. The density too will be less compared to Old Gurgaon. The area also falls in and around the proposed Eastern and Western peripherals that are expected to witness tremendous activity once complete

As per the new GurgaonManesar Master Plan 2021, the availability of land for development has opened up huge possibilities, mainly in the new sectors along Pataudi Road, slated to emerge as a growth corridor in the near future. A draft development plan for Pataudi town, too, is being prepared.It is expected to have about 4-5 sectors.

Source: Hindustan Times On The Fast Track: Check Out The Development Work Planned Along Pataudi Road

However this problem should be hopefully over, as Hindustan Constructions Co.Ltd (HCC) has started work on the construction of flyover at the Badarpur border. The other infrastructure development to take place in the area include the Taj Expressway (near sector 80), and a highway beginning from Kalindi Kunj and running parallel to Mathura Road that will bypass the city -- meant to be a kind of a peripheral road around the Naharpar area.

It should be noted that after the development of Gurgaon, HUDA is now focusing on the development of Faridabad, the forgotten industrial town. HUDA is also widening the existing bypass at Sector 37, and constructing a flyover over it. Sector 79 in the area has been earmarked by the gov ernment -- as per the notifi cation by the Municipal Corporation of Faridabad (MCF) -- as the commercial district.

For buyers who are interested to buy property in Faridabad but worry about the condition of the roads here, the good news is that the government has imposed Section 17(4) of the Land Acquisition Act for compulsory acquisition of land earmarked for sector roads.

Another concern voiced by buyers is the probable increase in external development charge (EDC). It has been increased in Gurgaon, but in Faridabad, since no external development has taken place in the new sectors, the decision to revise EDC has been kept pending.

If officials are to be believed then greening of the area is also being taken care of. "We have reserved Sector 52 A in Gurgaon as the green area and are also taking care of the green belt of Faridabad," says a HUDA official.

Source: Hindustan Times A greater potential:The Naharpar area of Faridabad will become a prime zone once Infrastructure is put in place.

The one reason, according to brokers, that's leading to the development of the area is the land crunch and high property prices in other NCR areas.

Also -- though a number of infrastructure plans have been chalked out but not implemented -- the Naharpar area still offers very affordable prices.

As of now when one drives to this place, a big hurdle on the way is the Badarpur border area because of traffic jams. With Hindustan Constructions Co. Ltd (HCC) beginning construction work for the development of flyover at Badarpur border, this problem should hopefully be over soon.

The other infrastructure development to take place in the area include the Taj Expressway (near sector 80), and a highway beginning from Kalindi Kunj and running parallel to Mathura Road that will bypass the city -- meant to be a kind of a peripheral road around the Naharpar area.

It should be noted that after the development of Gurgaon, HUDA is now focusing on the development of Faridabad, the forgotten industrial town.

HUDA is also widening the existing bypass at Sector 37, and constructing a flyover over it. Sector 79 in the area has been earmarked by the government -- as per the notifi cation by the Municipal Corporation of Faridabad (MCF) -- as the commercial district.

When it comes to the buyers interested in purchasing property in Faridabad and worrying about the condition of the roads here, the good news is that the government has imposed Section 17(4) of the Land Acquisition Act for compulsory acquiring of land earmarked for sector roads. The roads, therefore, are going to be developed once the plans are implemented.

Source: Hindustan Times A greater potential: The Naharpar area of Faridabad is going to be a premium zone for Haryana once the infrastructure is put in place

Gradual transition:

Connected with just one principal road - the Agra Mumbai road - to the main city, Ghatkopar has steadily caught pace with developments in other parts of the city. The suburb is mainly inhabited by residential and retail projects.

Within Ghatkopar are Ghatkopar (W) and Ghatkopar (E), Garodia Nagar, a large development developed by (and on land owned by) the Garodia family, Pant Nagar, and Rajawadi encompassing a major population of the area. The area enjoys a strategic location and provides easy access to both Western and Central Railway lines.

Development is in full swing here with many retail outlets, shopping complexes, malls and entertainment places coming up. Odeon in Ghatkopar (E), Uday and Shreyas in Ghatkopar (W) are some theatres here. Besides, it has a plethora of good places to shop right from the landmark Shoppers Stop to many small shopping centres such as Jayantvilla, Shree Krupa, that are avid crowdpullers. The area has also developed good educational facilities, modern hospitals and entertainment options for the residents. The well-known private elementary schools in Ghatkopar include North Bombay Welfare Society High School, Fatima High School, Gurukul High School, Garodia High School, Ramji Assar High Schools with coveted colleges like, the Somaiya family of colleges (Arts, Science, Management, Engineering and Medicine).

R Ramanathan, a resident of Ghatkopar (W), says, “I have been living here for the last 35 years. Initially there was no development here. There were no proper approach roads. Also there were not too many builders and people built private houses of their own. It is now after the growth of the city that proper roads and railway network has developed resulting into many builders setting up projects.”

Source: Times Property Gradual transition

"This year, 30% of the total exports will happen from SEZs. However, due to the slowdown, exports this year are expected to be about Rs 1,00,000 crore, a significant shortfall considering the earlier industry projections of about Rs 1,20,000 crore," additional secretary R Gopalan said on the sidelines of an Assocham conclave. He said SEZs should shift their focus from the US and European markets to other lesser-affected markets to sell their produce.

He said 30% of the total exports from SEZs would be from Gujarat. The state has eight operational SEZs and 49 have received formal approval. While 26 of these have been notified, 11 other zones have received in-principle approval, he said.

Mr Gopalan also said a Parliamentary Standing Committee has given recommendations on the new land acquisition and rehabilitation policy for SEZs. The policy is slated to be sent to the Cabinet for approval, he said, adding guidelines for power and port-based SEZs are also in advanced stages of finalisation, he added.

The official dismissed the notion that SEZs were "land guzzlers". "Of the 300-odd SEZs set up on about 120,000 hectares, 78% are on barren land, 19% are on land yielding single-crop, while the remaining 3% are on double-crop land," he said.

Gurgaon
November 18, 2008
Tejeesh N.S. Behl
Indian it's el dorado, Gurgaon, is a living example of an idiot-proof city--with little by way of signages and infrastructure, it ensures that idiots and directionally challenged people stay away. Searching for DLF Royalton, I manage to chance upon the nearing-completion Connoisseur Apartments in Sector 43, right next to the Gold Souk. The 2,500 sq. feet four-bedroom apartments, as I learn, come with an asking price of Rs 6,400 per sq. feet--and I am offered an all-inclusive price of Rs 1.65 crore. Sure, it includes all woodwork, modular kitchen and air-conditioning, but the eight figure digit is way too much, I reason with the company's representative. It's a sign of the times that realtors are amenable to prices suggested by customers--he suggests a discussion on the price. While I start with Rs 1.1 crore, he responds with Rs 1.55 crore. I quote Rs 1.3 crore--he suggests a teleconference with his MD Anil Sharma, who's unwilling to go below Rs 1.4 crore.

Fobbing them off, I head towards DLF's Royalton Towers where a software firm owner, probably singed by the heat of the meltdown, wants to get rid of his fourbedroom 3,900 sq. feet apartment. His asking price: Rs 6,000 per sq. feet. It's probably been bought as an investment, so you could negotiate, suggests the broker. I check a few other properties--Vipul's Belmonte on Golf Course Road, where a four-bedroom 4,100 sq. feet apartment is quoting at Rs 5,800 per sq. feet, DLF's Belaire, launched at Rs 6,000 per sq. feet for a fourbedroom 3,200 sq. feet apartment, fell to Rs 5,600 per sq. feet and has stabilised at Rs 5,800 per sq. feet.

I check into a local real estate consultancy, Temple Estate and Securities and get talking to Anant Bawa, CEO, Gurgaon-Residential. There's been a softening, he confirms, but only to the extent of Rs 100-200 per sq. feet in most cases with a few exceptions like the Ridgewood Estate where a three-bedroom 1,400 sq. feet apartment went for Rs 76 lakh vis-à-vis an asking price of Rs 84 lakh a few months back. He suggests if my budget is in the region of Rs 4,000 per sq. feet, I should probably look at apartments on Sohna Road.

As I make my way out of his office, his sales executive motions me aside. "If you're willing to wait for a month, I can assure you prices around this part (DLF Phase 4 and 5) will be down by another Rs 1,000-1,200 per sq. feet," he informs. My Gurgaon trip hasn't gone waste after all!

Apartment visited: Connoisseur Apartments
Listed price: Rs 1.65 crore
Area 2,500 sq. ft
Price after bargain: Rs 1.4 crore

Noida
November 15, 2008
Tejeesh N.S. Behl
Eldeco Utopia in Noida's Sector 93, just off the Expressway. Inside the on-site marketing office, I quickly get down to business: that I am a bona fide house hunter looking for a minimum three-bedroom apartment.

The sales officer offers me three-bedroom plus servant room units that are ready-to-move-in. I cut directly to the chase: damages. "Rs 1.24 crore is the basic sales price (BSP), plus extra charges like car parking, preferential location charges (PLC), etc.," he says. This, for a 2,150 sq. feet apartment (Super Area)--which would work out to approximately 1,500 square feet carpet area.

While a down payment would fetch me an 8 per cent discount (a teaser, as I discover later), installments make me eligible for only 4 per cent. "Rs 1.24 crore is a bit on the higher side," I tell him, especially since I figure that apart from the Expressway, there's not much this apartment can boast of. No nearby provision stores or markets, no easily available transportation, no education or medical facilities, I argue. He responds with future prospects and valuations--I stick to the present. He throws in another 4 per cent--I am now up at 12 per cent discount and hungry for more. "What's your offer?" he queries. I quote Rs 80 lakh. He baulks, but adds another 4 per cent to the discount basket--making me richer by 16 per cent. Round it off to 20 per cent, I suggest. Clearly, he's a little weary now and hesitatingly accepts. It's not much, but it's a start.

Next halt, the under-construction Omaxe Grand Woods and Omaxe Forest Spa, also in Sector 93. The company's already discounted the listed price of Rs 7,100 per sq. feet for a 2,900 sq. feet three bedroom apartment at Forest Spa by Rs 900 per sq. feet. "If you opt for a down payment, there's a further rebate of 10 per cent," informs the smooth-talking company representative. A price of Rs 5,580 per sq. feet even before I start talking. Greedy, I push for more. He needs authorisation from company for more. At the Omaxe Twin Towers, in Noida's Sector 50, a three-bedroom plus servant room 2,150 sq. feet apartment is offered for Rs 4,950 per square feet--a measly discount of 10 per cent. I protest and gingerly he reaches out to his calculator and punches in a few numbers. Rs 4,851 per sq. feet, he comes back. I push for more--and the outcome is Rs 4,800 per sq. feet. I know there's more juice left and the company representative confirms it with his parting shot: "If you are willing to write a cheque right now, we could negotiate something to your liking." I smile--mission nearly accomplished.

Apartment visited: Eldeco Utopia
Listed price: Rs 1.24 crore plus
Area: 2,150 sq. ft
Price after bargain: Rs 1 crore plus

• Mumbai
  
• Kolkata
  
• Bangalore

Health care company Fortis Healthcare Ltd's plans of setting up hospitals with real estate developers Emaar MGF Land Ltd and DLF Ltd appear to be going nowhere amid Fortis' concerns over the sites that were proposed by both builders.

Fortis had signed an memorandum of agreement with DLF in January 2007 to set up 15 hospitals in townships being developed by the builder, India's largest by market capitalization. Fortis was to hold a 51% stake in that venture but it was later revised upward to 74%. However, a final agreement is yet to be inked.

"We are still working on setting up projects," said Shivinder Mohan Singh, chief executive officer of Fortis. "But the questions is where and how many, and is it appetizing enough? I think it is basically an issue of site selection for DLF and I guess in the current market this is not a priority for DLF."

The number of hospitals is also down to four after Fortis found that most of the sites proposed by DLF didn't have much consumer or commercial appeal, Singh said. "We realized that most of these township hospitals were not doable. Then the developer told us that of the 30 sites, only four or five will work. So, are we going to enter into a joint venture with you ( DLF) for four hospitals?"

On an earlier occasion, DLF spokesman Sanjey Roy had maintained that the agreement with Fortis was on track and the hospitals would be set up once DLF starts work on its townships.

Emaar MGF also has an memorandum of understanding with Fortis to develop hospitals in tier I, tier II and some smaller cities. Emaar plans to develop 25 hospitals with a capacity ranging from 75 to 125 beds over 10-12 years. "The agreement with Emaar is in a joint venture format and I am not aware of any dialogue with them in the last few months," said Singh.

He said Emaar too was in the same situation as DLF--ambitious plans but offering remote sites that weren't too appealing to Fortis.

"We realized it's not doable," says Singh. "The (sites) were too far, I mean you have a campus coming up in Manesar, what will I do with that?"
Singh says half of the sites offered had to be rejected. "That's why it's taken time," he said. "Also, the opportunity that was perceived to begin with was not that big. We are not going to say we will do 30 hospitals and do only three. It doesn't work that way with us."

However, "Emaar MGF's partnership with Fortis is on track and working towards developing hospitals that would be positioned as one stop shops for healthcare facilities in the tier one and tier two cities of India," an Emaar MGF spokesperson said. "We are today in the advanced stage of identifying sites for these hospitals."

Fortis, which has a similar tie-up with Ansal Properties and Infrastructure Ltd to set up a medicity within the developer's Sushant Golf City township in Lucknow, says its agreement with Ansal is on track. "As for the 52 acres we bought from Ansal in Lucknow, that is happening. As and when the permission of the property comes to us, we will set up our facility," Singh said. The medicity will be set up in seven years on 52 acres being purchased by Fortis from Ansal in Lucknow. An e-mail to Ansal didn't elicit an immediate response.

Quite a few ambitious plans by most Indian builders have come unstuck amid a significant slowing of the economy, especially when it comes to real estate projects.

Many Indian real estate and construction firms and architects are feeling the heat of a real estate slowdown--in West Asia.

Over the past three-four years, developers and construction firms such as the Dheeraj Group, Hiranandani Developers Pvt. Ltd, Ajmera Group and Mayfair Housing (P) Ltd entered markets in West Asia, attracted by relatively low-cost land, rising demand and the scope for striking joint ventures (JVs) with local developers.

Over the past six months, however, developers in West Asia have seen their finances hurt by the global economic slowdown that ensued in the wake of the credit crisis. Du bai's Nakheel PJSC and Emaar Properties PJSC have both been affected.

Engineering and construction firm Gammon Billimoria Plc., a JV between Gammon India Ltd and BE Billimoria and Co. Ltd, had nearly completed the foundation work for eight of the 12 towers of the Forbidden City project at Dubai's International City when it was informed by developer Nakheel that it would have to suspend work indefinitely.

"We were informed that the project has been shelved because the developer was undergoing a cash crunch. We have no idea when and whether it will resume," said a senior Gammon executive, who asked not to be named because he is not authorized to speak to the media.

Nakheel is struggling to execute its projects and shelving the ones that are far from completion, said two property consultants operating out of Dubai on condition of anonymity.

In an email response to Mint, a Nakheel spokesperson said: "We are witnessing a global negative economic movement and believe we have a responsibility to help this market maintain healthy momentum, which means reassessing our immediate business objectives." The next few months would see a "redirecting of activity" around some of the firm's projects, he added.

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.