Prestige Shantiniketan Whitefield Tower Collapse

A Tower of Prestige Shantiniketan at Whitefield in Bangalore had collapsed and here are some pictures of the same.
We caution our readers about the quality of this project - Prestige Shantiniketan and this Developer - Prestige Constructions before buying their Dream Home.

Hyderabad + Pune + Kolkata - Office Rentals

In Hyderabad, demand has been low in Banjara Hills, Jubilee Hills, Secunderabad and Himayatnagar. Demand has also been subdued in the IT corridor of Madhapur and Gachibowli and rentals have remained stable.

Begumpet, Rajbhavan Rd, Jubilee Hills and Banjara Hills Grade A Office Rentals have been stable at Rs 65. INR 42 at Hitech City, Gachibowli. Rs 30 - Rs 35 at Ameerpet, Pocharam, Shamshabad, Himayatnagar.

Pune is witnessing a slowdown. Some IT SEZ developers have deferred their decision to commence construction. Going forward rentals are expected to remain either stable or undergo a
correction in certain pockets.

Grade A Offices in Shivaji Nagar, Bund Garden Rd commanded rentals of Rs 100. Kalyani Nagar, Shankarsheth Rd were next in line at INR 70 while IT corridors of Hinjewadi, Kharadi, Hadapsar can fetch Rs 50.

Kolkata - The city which witnessed the shifting of Tata's Nano car is likely to undergo some deeper correction according to industry insiders. We have already written how Land Prices crashed in the vicinity of Singur and Salt Lake.

Park Street and Camac Street havs witnessed fall in Grade A office space rentals from Rs 150 to Rs 120 while Salt Lake and Rajarhat have been stable at least until Sept around 50.

20% Price Fall - According to Citi

According to Citigroup Analysts tracking the Indian Real Estate Space, till now there has been 20% correction in Realty Prices which they account for in estimating the NAV of various Realty stocks. What is really surprising is Sobha Developers land bank has fallen from around 4,000 acres to about 3,300 acres as the company is reconsidering some of its land deals where it has not fully paid up, given current difficult markets.

Here are the excerpts from the reports,

Citi on Bangalore / Chennai based Purvankara Projects,

....NAV estimate of Rs104 is based on the following assumptions: 1) 20% decline in property prices; 2) 15-24month delay in project execution.....

Similarly for Delhi NCR and North India based Parsvnath Developers and Ansal Properties and Infrastructure,

....Our NAV estimate assumes: a) 20% decline to current market prices; b) development....

Goldman Sachs in its report said 2Q earnings reflect slowdown. Citi has cut the target prices substantially for all Realty Stocks. DLF's new target is Rs 340 from Rs 585 and that for Unitech is Rs 57 from Rs 193 :-)

Bangalore + Chennai - Office Rentals

Bangalore / Bengaluru CBD Office Space has hardly witnessed corrections like that in Mumbai. However, peripheral business districts have seen a fall due to pathetic infrastructure and continuous negligent attitude from successive state Governments in improving the same. There is huge supply coming up in Whitefield, Outer Ring Road, Electronics City and North Bangalore. ~5m sq ft of office space is currently available in Whitefield and much more is under construction and will be ready for occupancy by 1Q09.

Grade A office Rentals in Bengaluru June-08 to Sept-08 [INR / SFT / Month]

• MG Road, Residency Road - Stable at Rs 85
• Koramangala, Indiranagar - Down from rs 70 to Rs 65
• Outer Ring Road stable around Rs 45
• Whitefield, Electronic City Stable around Rs 30
• North Bangalore - Witnessed a Rise in early 2008 but now stable around Rs 45
  

Chennai CBD locations (MRC Nagar, Guindy and Taramani) rentals have been stable but absorption in 3Q08 was much lower than that recorded in previous quarters. Absorption has remained low in suburban and peripheral locations such as OMR and GST Road thereby keeping rentals at competitive rates.

Grade A office Rentals in Chennai:

• Annai Salai, Nungambakkam - Stable between Rs 70 to Rs 80
• Velachery, Taramani - Stable at Rs 40
• Siruseri, Ambattur, GST Rd - Rs 30 to Rs 35

Can someone share the state of infrastructure in Ambattur and GST Road, Chennai ?

Mumbai Commercial / Office Rentals

Mumbai, the aspiring financial capital of Asia which had rentals comparable to New York and Tokyo is now witnessing corrections. Excerpts from CB Richard Ellis

In CBD, rentals across premium buildings have witnessed a correction and this trend is likely to continue over the next quarter. In BKC, new enquiries have slowed and some developers are showing more flexibility in structuring commercial terms. Andheri-Kurla Road, Powai and Malad have not seen substantial activity in the office sector in the current quarter while Thane and Navi Mumbai remain the preferred locations for IT and back office operations are the only locations in Mumbai that have not witnessed a correction in rentals so far.

Mumbai Grade A Office Space Rentals Jun-08 and Sept-08 [INR / SFT / Month]

• Nariman Point, Fort, Cuffe Parade - Down from Rs 475 to Rs 415
• Worli, Lower Parel, Prabhadevi - Down from Rs 375 to Rs 315
• BKC, Kalina - Down from Rs 415 to Rs 375
• Andheri, Vile Parle, Jogeshwari - Down from Rs 220 to Rs 200
• Malad, Powai - Down from rs 100 to Rs 80
• Thane, Navi Mumbai - Stable around Rs 50
  

Commercial / Office Rentals - Delhi - NCR

The realty sector has finally witnessed the much needed correction for genuine industries and offices to expand and help the Indian economy grow. Here is an excerpt from CB Richard Ellis recent report on Delhi NCR Commercial / office Space Realty World.

There has been some correction in rentals, and leasing volumes have been low. In Gurgaon, pre-leasing has been quite slow, a situation that was uncommon before but which clearly highlights lower demand. IT/ITES rentals are expected to be under pressure while rentals for commercial office space are likely to remain stagnant. Noida has significant supply but slow leasing activity because of which rentals are expected to remain low in the next 2-3 quarters.

Delhi NCR - Grade A Office Space Rentals - In June-2008 and Sept-2008

• Connaught Place - Down from Rs 340 to Rs 300
• Nehru Place - Down from Rs 270 to Rs 240
• Jasola - Down from Rs 175 to Rs 160
• Gurgaon - Commercial - Stable around Rs 90
• Gurgaon - IT - Stable around Rs 50
• Noida IT - Down from Rs 50 to Rs 42
  

Who Bought The Real Estate Fall ?

It makes perfect sense to go bargain hunting, especially in the Indian Realty space which corrected more than any other industry vertical in the recent crash. Here is the data on who bought into recent the fall.

• Pan Atlantic in Sobha Developers $10 mn invstment in SPV developing residential project in Bangalore
• LTG International pumped $12 mn in Subsidiary of Prozone Enterprises, Provogue's real estate arm
• Samara Capital invested $12 mn in Shriram Land Development
• Kotak Realty Fund & Sun- Apollo Ventures bought 50% stake in Janapriya Projects and 65% stake in Janapriya Townships respectively. Funding details was not disclosed.
• AIG Global Real Estate pumped into 8.5 mn sft Velankani Tech Park which is a notified IT SEZ in Sriperumbudur, Chennai
• Orient Global bought 1.2% stake in HDIL through the stock market route

Stay tuned for Red Hot updates on the Indian realty sector.

AIM Listed India Realty Funds in Trouble

Indian Realty developers moved to London Stock Exchange's AIM offering part of their Realty cake. Investors bought these funds as if there was no tomorrow and now these scrips are quoting at deep discount to NAVs.

• Unitech Corporate Park is trading at 75% discount to its NAV
• K Raheja's Ishaan Real Estate is quoting at 65% to NAV
• Hiranandani promoted Hirco is quoting at 80% discount to its NAV

Laxey Partners one of the main shareholders in Hirco is asking promoters to Buy-back shares and bridge the difference. In some cases investors are asking companies to liquidate their portfolios / land holdings and BUY-back the shares.

Neerav Investments - Niraj and Ravi Raheja's investment arm has picked up 35% stake in Ishaan Real Estate.

It is time to go and pick up Realty from distressed Sellers if you believe in Realty or want your Dream House.