Current street expectations of high volume growth along with high prices of real estate are unlikely to pan out. Expect prices of residential property to correct to the tune of 10% over the next few months.
The slowdown in home loan disbursements, among other factors, underpins our view that
the residential real estate market has slowed down considerably.On the pricing front, we forecast a correction of 10% from current prices in the next 12 months but do not rule out steeper correction.
Kotak is not very bullish on the sector. Uday Kotak @ India Incredible at 60 in New York said that Equity is the best asset class for Indian investor to be in today.
Unitech's residential division has the largest volumes under development amongst Indian listed real estate companies with more than 25 mn sq. ft under construction in National Capital Region and Kolkata. Unitech has access to a low-cost land bank of 480 mn sq. ft across 14 cities.
NAV estimate for Sobha and DLF for a 10% reduction in selling price in the next 12 months. New fair price for Sobha Developers, based on March 2009 NAV, is Rs870/share and the rating is changed to In-Line (Outperform previously). Revised target price for DLF is Rs750/share (Rs705 previously) based on a 15% premium (5% earlier) to March 2009-based NAV of Rs646.
Friday, September 28, 2007
Wednesday, September 26, 2007
DLF creating new generation workspaces
DLF has announced its second IT park in Kolkata. The company is developing this state of the art, world-class facility on 25 acres of land offering 2.5 million sq.ft. of IT/ITES workspace.
DLF IT park spells success. It will present an ultramodern integrated tech city that offers a modem workspace and is fully-equipped to operate any IT/ITES major 24X7. The IT Park space is spread over an area of 25 acres and will offer developed workspace clubbed with serviced apartments, retail and recreational, all set to revolutionize IT workspace in n00ew IT corridor. Efficiently designed by the renowned architects, it is a ready-built IT workspace to offer unmatched scalable advantages.
This IT Park will involve an investment of Rs 700 crore approximately and will be developed in phases. The first phase of the said development is expected to get operational by the end of this year or early next year. It would cater to all the international and national IT/ITES companies and will be surely the first choice for IT-ITES companies in times to come.
The location advantage of DLF IT Park is not found elsewhere in Kolkata. It is located in the new IT corridor of new town, Rajarhat and in close proximity to key residential areas and salt lake. The project is just 10 minutes drive from CBD and airport.
Over the past decade DLF properties have emerged as the preferred destination for both Indian as well as multinational conglomerates apart from leading IT/ITES firms due to its cost effective office space and best in class infrastructure. DLF is also responsible for triggering the corporate shift from Delhi to Gurgaon in 1990's based on the walk to work culture. This culture implied that corporates could now co-locate their offices and residential places in order to save time in commuting.
DLF IT park spells success. It will present an ultramodern integrated tech city that offers a modem workspace and is fully-equipped to operate any IT/ITES major 24X7. The IT Park space is spread over an area of 25 acres and will offer developed workspace clubbed with serviced apartments, retail and recreational, all set to revolutionize IT workspace in n00ew IT corridor. Efficiently designed by the renowned architects, it is a ready-built IT workspace to offer unmatched scalable advantages.
This IT Park will involve an investment of Rs 700 crore approximately and will be developed in phases. The first phase of the said development is expected to get operational by the end of this year or early next year. It would cater to all the international and national IT/ITES companies and will be surely the first choice for IT-ITES companies in times to come.
The location advantage of DLF IT Park is not found elsewhere in Kolkata. It is located in the new IT corridor of new town, Rajarhat and in close proximity to key residential areas and salt lake. The project is just 10 minutes drive from CBD and airport.
Over the past decade DLF properties have emerged as the preferred destination for both Indian as well as multinational conglomerates apart from leading IT/ITES firms due to its cost effective office space and best in class infrastructure. DLF is also responsible for triggering the corporate shift from Delhi to Gurgaon in 1990's based on the walk to work culture. This culture implied that corporates could now co-locate their offices and residential places in order to save time in commuting.
Tuesday, September 25, 2007
UBS + IL&FS Realty Funds
UBS Global Real Estate is expected to launch India specific Real Estate fund by the end of this year. We have reliably learnt that the company has tied up with Mumbai based property developer K Raheja to finance various real estate projects. UBS Global Real Estate Management has assets of $50 Billion under management across the globe. The proposed fund will have a lock-in period of 7 years with the option of 2 one year extensions.
Realty market has wide speculation that this fund will support K Raheja's retail venture by providing necessary and prime commercial real estate for Shopper's Stop, Crossword, Inorbit Mall and Hypercity super bazaar.
In another development, IL&FS Investment Managers and Milestone Capital Advisors launched a real estate investment fund to raise Rs 1,000 crore to invest in leased or rented properties. This fund is for people who are risk-averse. The fund would be invested in under developed or under construction properties. The funds would be invested in office buildings, hospitals, hotels, warehouses and shopping malls. The managers would invest 30 per cent each in retail and office properties, 20 per cent in IT and ITeS and 10 per cent each in warehousing and office properties.
Realty market has wide speculation that this fund will support K Raheja's retail venture by providing necessary and prime commercial real estate for Shopper's Stop, Crossword, Inorbit Mall and Hypercity super bazaar.
In another development, IL&FS Investment Managers and Milestone Capital Advisors launched a real estate investment fund to raise Rs 1,000 crore to invest in leased or rented properties. This fund is for people who are risk-averse. The fund would be invested in under developed or under construction properties. The funds would be invested in office buildings, hospitals, hotels, warehouses and shopping malls. The managers would invest 30 per cent each in retail and office properties, 20 per cent in IT and ITeS and 10 per cent each in warehousing and office properties.
Wednesday, September 19, 2007
DLF Assets to List on Singapore
Goldman Sachs and Lehman Brothers are advising DLF Assets, a Singapore based unit promoted K.P. Singh, chairman of DLF, for its proposed public issue in Singapore.
Earlier, DLF had reportedly sold some of its leased commercial properties to DLF Assets to separate its development and asset ownership businesses. DLF Assets has already paid about Rs 2400 crore to DLF against a total consideration of Rs 4000 crore.
DLF Assets has a portfolio of IT parks in New Delhi, Hyderabad and Chennai and two large office complexes in Gurgaon, the report added.
DLF reported a net profit of Rs 579.27 crore on sales of Rs 1121.87 crore in Q1 June 2007.
Earlier, DLF had reportedly sold some of its leased commercial properties to DLF Assets to separate its development and asset ownership businesses. DLF Assets has already paid about Rs 2400 crore to DLF against a total consideration of Rs 4000 crore.
DLF Assets has a portfolio of IT parks in New Delhi, Hyderabad and Chennai and two large office complexes in Gurgaon, the report added.
DLF reported a net profit of Rs 579.27 crore on sales of Rs 1121.87 crore in Q1 June 2007.
Monday, September 17, 2007
Ansals Woodbury apartments at Zirakpur
Ansal Housing & Construction on 15 September 2007 has launched a new Project named Ansals Woodbury apartments at Zirakpur (Punjab). This is a residential group housing project located near PSEB Grid, Nabha Road, Babhat, Zirakpur (Punjab).
This residential project will have in-house amenities like designer gate, boundary walled complex, designer external lighting, rain water harvesting, beautifully landscaped parks & gazebo, children play area with swings, club with swimming pool & gymnasium, convenient shopping facility, ample still parking, piped gas supply etc. The company will now undertake all the development and marketing work of the project. The Project is expected to have a turnover of approximately 50 crore and will be completed in the period of 3 years approximately.
We will also have an exclusive coverage on affordable housing in India very soon.
This residential project will have in-house amenities like designer gate, boundary walled complex, designer external lighting, rain water harvesting, beautifully landscaped parks & gazebo, children play area with swings, club with swimming pool & gymnasium, convenient shopping facility, ample still parking, piped gas supply etc. The company will now undertake all the development and marketing work of the project. The Project is expected to have a turnover of approximately 50 crore and will be completed in the period of 3 years approximately.
We will also have an exclusive coverage on affordable housing in India very soon.
Saturday, September 15, 2007
Sarup multiplex cum shopping mall
Sarup Tanneries has tied up with metropolitan MGF for setting up a multiplex cum shopping mall at a prime location in the heart of city at Jalandhar. Bhumi Pooja for this project was done on 10 September 2007 and construction of the project has been started. The total land for this project is about 4 acres and the built up area will be around 6 lakhs sqfts. The construction work has been entrusted to Leighton.
Monday, September 10, 2007
IL&FS banks on new realty fund
The IL&FS - Milestone Fund-I is a four-year close-end fund with an option to extend the term by two more years, if required.
The fund is looking at an initial corpus of Rs 1000 crore, including a greenshoe option of Rs 500 crore. It is looking at an annual yield of 11% and an annual return of 18-20% with the property price appreciation, reports suggest.
The minimum investment in this fund is Rs 10 lakh for individuals and Rs 1 crore for corporates. It opened for subscription on Monday, 11 September 2007 and will close on 30 October 2007.
The fund is looking at an initial corpus of Rs 1000 crore, including a greenshoe option of Rs 500 crore. It is looking at an annual yield of 11% and an annual return of 18-20% with the property price appreciation, reports suggest.
The minimum investment in this fund is Rs 10 lakh for individuals and Rs 1 crore for corporates. It opened for subscription on Monday, 11 September 2007 and will close on 30 October 2007.
Sunday, September 09, 2007
Residential Real Estate Supply in Indian Cities
Merill Lynch report on the Indian Residential Real Estate sector says, Long-term growth factors for the industry remain strong. Short-term oversupply could lead to price correction. Signs of consolidation in the industry are beginning to emerge. Most developers' targets for development seem to be stretched and might not be met in the time span stated.
Here is the Supply Position for Bangalore, Chennai, Hyderabad, Kolkatta, Delhi NCR, Pune and Mumbai.
Here is the Supply Position for Bangalore, Chennai, Hyderabad, Kolkatta, Delhi NCR, Pune and Mumbai.
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