DLF denies Pantaloon space in South Point Mall

Pantaloon Retail India Ltd which is facing tremendous pressure from Dalal Street over slow growth in retail space, has pulled in India's largest realty company DLF Retail over possession of property at Gurgaon's South Point Mall.

Pantaloon Retail India Ltd had booked 110,000 sft space in South Point Mall 3 years ago and an agreement was also signed. In the interim, real estate prices sky rocketed and DLF known for cheating investors decided not to allow Pantaloon Retail occupy the space in the mall. Pantaloon Retail moved to the High Court of Delhi and has filed an injunction against DLF.

In the past 3 years, retail rentals are up by more than 70% and we shall wait to see if just will prevail or K.P.Singh's corrupt practices will rule.

Funding the Maha + Navi Mumbai SEZ

As on today only one thing is certain about the funding for Reliance Maha and Navi Mumbai SEZ. Jai Corp a manufacturing company promoted by Anand Jain's family will have a 10% stake in various segments of the SEZ. Here is what we have got to know.

The total cost of SEZs which includes land Acquisition and Development is estimated at Rs 22,800 crore [$5.5 Billion]. Jai Corp will invest Rs 2,280 crore.

Jai Corp is eligible to bid for International Airport, Metro Rail and Trans Harbour Sea Link. Developers for these projects is not yet finalized. Expansion of Rewas Port and establishment of a power plant to fulfill the needs of Mukesh's dream city :-) . A debt equity of 2:1 is assumed for the project.

When completed the Navi Mumbai and Maha Mumbai SEZ together are likely to be valued in Bear Case, Base Case and Bull case as follows - [$22.5Billion] or [$27 Billion] or [$29.5Billion] Stake holders in the project will get a fixed income of 10% of their investment as Income from asset management every year. This is just the valuation for SEZs excluding Airport, Power Plants, Ports etc.

Nitesh Estates + Citi to Scale new Highs

Bangalore based YoungTurk, Nitesh Shetty, Promoter of Nitesh Estates has roped in Citigroup for an ambitious $300 million retail roll out. Nitesh Estate will mark its presence with world class structures in the cities of Chennai, Kochi, Thiruvananthpuram and ofcourse Bangalore.

In Bangalore, the company is building a 800,000 sft mall in Indiranagar and 200,000 sft of serviced apartments. This project is just off the 50+ International retailers landmark @ Indiranagar just off the 100 ft road. The company has roped in Seattle,WA based architects for the design of the mall.

The JV company is also developing a 350,000 sft mall on Boat Club road in Chennai. The projects in Thiruvananthpuram and Kochi will be around 600,000 sft and 300,000 sft respectively.

Parsvnath's Gem and Jewelley, Jaipur SEZ

Parsvnath Developers has told us that they have signed a Memorandum of Understanding (MoU) by the company's subsidiary viz. Parsvnath SEZ Ltd(PSL), with Government of Rajasthan to develop 112 acres SEZ in Jaipur. The SEZ envisage an investment of Rs 1400 crore and will focus on giving a further boost to gems and jewellery industry.

The MoU entails that the State will provide necessary support for infrastructure facilities in SEZ. The agreement will also ensure smooth implementation towards the development of the SEZ by providing single Window Service through the Bureau of Investment Promotion (BIP). It will also help PSL to avail various incentives and facilities under various schemes announced by the State / Central Government, which will ensure that its development remains on the fast track.

Navi-Maha Mumbai SEZ - Maps

Mumbai, the financial hub of India is located that it can neither grow North nor South, hence the development started moving towards east[Navi Mumbai] and then Mukesh Ambani wants to extend it south-east so that he can still touch base with Mumbai.Mukesh Ambani bought controlling stake in short sighted Nikhil Gandhi's Navi Mumbai SEZ as well in his company Sea King Infrastructure Ltd (SKIL). Reliance also wants to extent the same and here is the map of Navi Mumbai SEZ.Unsatisfied with the tiny area of Navi Mumbai and scaling global ambitions of Mukesh and Anand Jain, made them propose the Reliance Maha Mumbai SEZ as shown below.
According to insiders, Reliance Maha Mumbai SEZ will challenge the Chinese supremacy of Shenzhen and HongKong. Connecting to the financial districts of Mumbai [Dalal Street] from SEZ is so important that here is the proposed SEA Link which Reliance wants to build. In our next issue [December-8th] we will cover the investments that are going into Reliance SEZ. Questions, Comments and Critics are most welcome.

Omaxe Multi-Product SEZ- Alwar Rajasthan

Omaxe has entered into memorandum of understanding with State of Rajasthan for facilitating the setting up of multi product special economic zone at District Alwar Rajasthan.

Further, the company has promoted a wholly owned subsidiary by the name of Omaxe Rajasthan SEZ Developers by making an investment of Rs 5,00,000. The proposed multi product special economic zone (SEZ) project is likely to be built in 5000 hectares area and is to be executed within a period of 5 years.

Mumbai's Bandra Kurla Property Prices Sky Rocket

Our analyst in Mumbai just told me that a Record deal has been struck in Mumbai. Wadhwa Builders mopped up plot number C-70 in Bandra Kurla Complex at a whopping Rs 46,806 / sft. They will develop a commercial complex there.

Mukesh Ambani controlled Reliance Industries mopped up 30,550 sq meters plot in BKC for Rs 918 crore for a commercial center and a car park.

Bangalore + Chennai + Hyderabad Real Estate Review

Exclusive survey of South Indian Real Estate Market. What is common in the Tri-Cities of South India is , IT/ ITeS is still the key demand driver in these markets, though Retailing is fast catching up.

• supply across asset classes gets more visible, while most of this is pre-leased/sold; risks remain.
• residential prices are holding /stabilized after some correction, while rentals are firm/increasing; land prices spiraling; Owning a Bungalow is now a dream for a middle class Indian.
• Infrastructure development is slow compared to Realty

Bangalore Real Estate:
Strong demand for IT space has led to 4-5% increase in rentals (Rs.42-45/sq ft); residential sale prices (Rs 3500/sqft) are holding with yields of 3-4%, relatively better than 1-2% in North. Potential supply risks, however, remain. We see good progress on infrastructure projects; new airport (Apr'08), peripheral road network (large parts complete) to enhance value ahead.

Chennai's Realty Reality:
While Chennai is a growing IT destination, Sriperumbudur near Chennai is an emerging manufacturing hub. This has led to land prices spiraling and greater thrust on infrastructure. IT space rentals (Rs.38-42/sq ft) are on the rise; residential prices are also firm at Rs 3600/sqft. Supply risks are relatively lower vs. other southern markets, barring some pockets.

Hyderbad Emerging IT Hub:
Madhapur (Hi-Tech City) and Gachibowli are the IT CBD of Hyderabad. Land availability/clear titles and spiraling land prices are key challenges. Potential supply risks have kept IT space rentals (Rs.36- 40/sqft) in-check; residential is a relatively (Rs 4000/sq ft) better market. Progress on road/airport projects and the pace of construction is encouraging.