Biggest Housing Venture in India - Satyagriha

Satyagriha - if executed will be the largest housing venture in India. The project involves building 3,42,000 homes in 634 acres of land at a tentative cost of Rs 62,000 crore. The project is spread across 15 Indian cities. The homes will be priced between Rs 800,000 and Rs 2,500,000.

The project is being marketed and managed by Bangalore based Asiapac projects and 20 other realty developers are also involved in the same project.

Global PEs - Goldman Sachs, Warburg Pincus, AIG, Lightspeed Ventures and Barings Asia have evinced interest in being equity partners in the project according to our sources. Each of them are likely to invest $300 million.

South India's Largest Mall in Yelahanka- Bangalore

North Bengalooru is all set to get the face lift in Realty deals when the first international flight will take off in March-2008. RMZ Corp is building South India's largest mall in Yelahanka, North Bangaluru. The Mega Mall will be 1.2 Mn sft in size and will house 200 retailers and the largest number of multiplexes under one roof. Singapore based DP Architects will work on this project for RMZ.

The project is coming on a massive 12 acre plot that belonged to an old factory. Sonali Lalvani of RMZ group confirmed the same but refused to give any details on the project.

Right from Mekhri Circle to Bangalore International Airport, this will be the only mall and its a fantastic idea to build it on massive scale in the Retail Capital of India. Apart from the Yelahanka Mall, Bangalore International Airport is also expected to be a host for Big Retailers, but will only cater to Travellers :-)

Parsvnath Royal Villas - Jodhpur

Parsvnath Pride Asia, is kicking the housing revolution in India. Parsvnath Developers just a while ago announced that, the company is building Parsvnath city, a self-contained mega township spread over 110.4 acres in Jodhpur. Bookings for Parsvnath Royale Villas, limited edition, exclusively designed, independent villas which are an integral part of Parsvnath city will begin at 10:00 AM this morning.

The company is offering villas in the variant sizes of 200, 250 & 300 Sq. yards in the first phase. The independent villas have been constructed to offer scope for further expansion of the building to suit every individual's growing family requirements.

Strategically located near Basni, Sangaria and Boranada industrial area, Parsvnath city is well connected to pali road by pass & 100 feet Sangaria road. The township is self-contained with all the basic amenities for comfort within the range of accessibility. The project will be ready for occupancy in next 24 months.

Related Reading:
Parsvnath Pride Asia Megacity, Chandigarh
Parsvnath City - Indore

Vizag - Residential Real Estate Market

Our Realty Reporter was recently in Vizag, Andhra Pradesh [Visakhapatnam] and did a survey of the city's residential real estate market. Here is his report, [Property Prices per SFT. Rental is for a 2BHK Good Apartment, Semi-Furnished upto 1200 SFT in size]

• Beach Road: Rs 2300- Rs 2800 / sft. Rental is Rs 15000 to Rs 18000
• Sripuram Junction: Rs2000 - Rs 2500. Rental is Rs 10000 to 15000
• Lawson Bay: Rs2000 - Rs2300. Rental is Rs 10000 to Rs12000
• M.V.P Colony: Rs2100 to Rs 2700. Rentals is Rs 8000 to Rs 15000
• Dwarka Nagar: Rs1500 -Rs2100. Rentals are Rs 8000 to Rs12000
• Akkyapalem: Rs1200-Rs15000. Rentals are Rs5000 to Rs10,000

The retail action has picked up in Vizag and is better than expected. Waltier up-lands and Dwarkanagar command Rs 80-Rs90/SFT/Month in rents for a Ground Floor store. Srirampur Junction and Dhaba Gardens - Rs 60-70/sft/month in rent. Jagdamba and Station Road command Rs 50/sft/month in rent for retail showrooms.

Farm Land not for SEZ - Supreme Court

In a truly Landmark judgment to end the greatest Land Scam in India, the Supreme Court of India presided by Justice S B Sinha and H S Bedi ruled that "Agricultural Land should not be acquired for setting up a factory or any other corporate purpose".

They have also made it mandatory for the government to make it clear weather the land being acquired by the state is being meant for public purpose or private purpose. They made it clear that the Government's land acquisition notifications can't claim both purposes simultaneously. The order came in the case of Punjab Government and an Automobile Company.

The court also said that Agricultural land can be acquired only after an affidavit by the District Collector stating that the land being acquired is unfit for agriculture. The collector is also responsible for the compensation.

The Impact of this Judgement is likely to be felt on Reliance Haryana and Maha Mumbai SEZ. DLF's mega township and land scam in Bangalore's Bidadi Village.
Infosys SEZ plans near Bangalore. Almost all the SEZs where farm land is forcibly acquired.

Parsvnath City - Indore Booking Launched

Parsvnath Developers which successfully completed the booking of Megacity project Parsvnath Pride Asia just a while ago announced the launch of yet another iconic residential development Parsvnath City at Indore, sprawling over 200 acres, the township will offer multistory condominium, villas & plots for cosmopolitan community living.

The company will offer four categories of plots ranging from 1548 square feet to 3825 square feet in the first phase of launch. The entry point has been kept affordable to enable people staying at Indore opt for a modern lifestyle at attractive prices starting from Rs 8 lakh onwards.

The first gated mega township at Indore, Parsvnath City will provide a unique ergonomic environment to all its residents and will offer magnificent features & amenities in line with international standards. The project will have three group housings sprawling over approximately 9.5 lakh square feet that will epitomize sophisticated living. The township will also offer an exclusive mall cum multiplex cum hotel spread over approximately 5 lakh square feet, sports grounds and full-fledged fitness clubs.

The project is being constructed along the Rs 2100 crore IT / ITES special economic zone (SEZ) sprawling over 78 acres. The SEZ will have a built up processing area of 7.47 million sqare feet and will ensure 40,000 potential direct employments.

Parsvnath City will have a realisation value of approximately Rs 800 crores spread over the next three years. The project will be ready for occupancy within 3 years from the commencement of construction.

Mantri Township - Bangalore + Hyderabad + Chennai + Pune

Mantri Developers has set a Billion Dollar aggressive township development plan in Bengaluru, Chennai, Hyderabad and South Pune. This is a 5 year plan to develop aggregate space of 100 million sft.

Mr. Mantri said,

We intend to float special purpose vehicle to execute each project. We are looking at foreign direct investment in the SPV and will invite PE majors to invest in the same as and when necessary. City outskirts are witnessing exponential growth owing to improving social infrastructure. With cities getting choked, developing townships outskirts is the only way for de-congestion.

Mantri has a huge land bank in Bangalore - 1,500 acres. While in Hyderabad its 350 acres. In Pune and Chennai they have 200 acres in each city.

Citi + Carlyle + Kotak Investments in Indian Real Estate

Their is no shortage of fund to pump the Real Estate bubble in India even after the sub-prime mortgage crisis. Citigroup's Real Estate arm has confirmed investment ot $250 Million to Bangalore / Bengalooru based Developer, Nitesh Estates. Citi will get a stake in SPV floated by Nitesh Shetty to develop Luxury Hotels and Shopping Malls.

PE giant, Carlyle group is in advanced stages of negotiations to invest in Indian Real Estate companies. Carlyle is looking to BUY minority stakes in number of ventures. Carleyle's biggest investment so far in India has been in HDFC - $650 Million.

Kotak Realty Fund has picked up 11.5% stake in Pride Hotels. Pride Hotels is developing 5 star hotels in Mumbai, Goa and Hyderabad.

Our internal research team after taking to various industry sources, suggest that the Indian Real Estate market is currently $12 Billion and is expected to be $90 Billion by 2015. Part of this will also come because of the depreciating USD. Foreign Funds are willing to commit $30 Billion for Indian Real Estate.

Realtors responsible for Mall Failure in India

Shopping @ Malls is a new craze in the Indian society. But according to the a recent survey by retailers association, retailers admitted that they have not performed well in the Indian malls and has led to widespread failure of merchants at malls.

Experts and Analysts attributed the sharp rise in Real Estate prices which is compelling developers to charge high rentals. Unplanned development of malls in most cases has failed to attract "enough business" for retailers putting their bottomline under severe pressure.

Mr. Kishore Biyani, MD of Pantaloon Retail India Ltd said,

There is a defnite clash of interest between mall developers and retailers. It's a big problem in India as barring a few, most developers are charging high rentals without really creating enough business opportunity for the retailers. This is hampering the success of malls.

Mr. Hars Neotia of Ambuja Realty said,

Retail margins are not as high as they were. Besides real estate prices are also rising.. This can hamper the success of the malls unless developers and retailers plan the project well.

Mr. Biyani's Future Group runs the Central Malls across many cities in India.

Coverage on Purvankara Builders - Citi

Puravankara has a strong brand and a proven record. Citi has initiated coverage on the stock with a Buy/Medium Risk rating and a target price of Rs536, based on a 5% discount to estimated core NAV of Rs564. The discount to the stock for the company's over dependence on Bangalore (~73% of Gross NAV) and residential projects. [Citi doesn't discount DLF and Unitech though they are over dependent on Delhi NCR region, which doesn't have as much growth potential as Bangalore has]

Quality landbank of 107m sq ft, largely within the city limits of Bangalore; A direct sales model, which tends to reduce speculative activity; and in-house construction expertise. These factors should drive a 3-year EPS CAGR of 65%, positioning it as a quality midscale.

Most houses in Bangalore are sold in the range of Rs 3,000 to Rs 3,500 / sft in Bangalore. [Less than Guragon Rs 4,000 to Rs 4,500 / sft] Bangalore has 978 IT Companies employing 341,374 people. Delhi / NCR has 633 IT companies employing 282,708 folks.

Parsvnath to get Foreign Funds for SEZ

Two of Parsvnath Developers'(PDL) proposed special economic zones (SEZ) in Indore and Gurgaon have already been notified. Report suggests the company is looking to divest about 30%-40% equity stake in both the SEZ projects to financial institutions. The deal size is expected to be in excess of Rs 2,000 crore for both the SEZ projects put together.

The two notified SEZs will have a total developable area of about 17 million square feet (sq ft). In addition, the company also has three formally approved SEZs at Dehradun, Kochi and Hyderabad with total developable area of 11.70 million sq ft and seven SEZs with an in-principle approval.

Delhi-based Parsvnath Developers currently derives most of its revenue from residential and integrated township projects in Harayana and Uttar Pradesh. It has presence in 17 Indian states.

Parsvnath Developers' net profit rose 131.1% to Rs 84.46 crore on a 40.2% increase in sales to Rs 346.16 in Q1 June 2007 over Q1 June 2006.

DLF bags Mega Development Project in Bangalore

DLF has secured a major order from the Government of Karnataka for building Bidadi Knowledge City in 9,1870-acres for positioning it as New Bangalore. The project will entail an investment of over Rs 60,000 crore. The company will join hands with Limitless Holdings, Dubai, a sister company of Nakheel and a part of the diversified Dubai World group in this project.

Karnataka Government, headed by Devegowda family have also secretly joined hands with Mukesh Ambani promoted SKIL [Sea King Infrastructure Ltd] and are using all means to kick off current promoter NICE to takeover the Bangalore-Mysore corridor.

Last week, DLF said it plans to invest nearly Rs 700 crore to develop its second information technology (IT) park in Kolkata. The proposed IT Park will come up on 25 acres of land offering 2.5 million square feet of IT/ITES workspace.

The current price of Rs 856.50 discounts in Q1 June 2007 annualized EPS of Rs 13.59 by a PE multiple of 63.02.