The CBI has arrested officials of several financial institutions ranging from CEO to deputy general managers for allegedly accepting bribes from a debt syndicate company, "Money Matters", for facilitating loans to companies across many industries including Indian property developers.
Details of those arrested: Personnel from LIC Housing Finance (CEO), LIC (Secretary, Investments), BOI (GM), Central Bank (Independent Director), PNB (DGM) and 3 people from Money Matters (CMD + 2 others) were arrested.
Pro-forma analysis of commercial real estate books indicates that were half these books to be written off (an extreme outcome, in our view), the impact on NAV would be an average of 16% for our PSU bank universe but 72% for LICHF. On the other hand, were earnings/book values to remain unaffected but multiples reverted to their 5-year averages, our scenario analysis indicates anything up to a 20% impact on the share prices of our PSU bank universe from current levels.
We believe these investigations will have negative implications on the companies involved and will remain an overhang, both from financial impact as well as sentiment perspective.
Has the RBI Woken up yet to take to task all the il-legal money launderers ? Land / Real Estate is the Worst Asset Class for Investment. Read on How Government Sponsors Black Money in Land Dealings.
Thursday, November 25, 2010
Tuesday, November 23, 2010
Historical Returns in Indian Property
JP Morgan was able to capture four transactions in four major markets that gives pointers to a long term price growth trend.
Mumbai (Napeansea Road) over a period of 90 years returned 15% ;
Prime Delhi (Kasturba Gandhi Marg, Barakhamba Road) over 40 years has returned 17%
Gurgaon over a period of last 20 years returned 20%
Chennai (T Nagar) over a period of 80 years returned a CAGR growth of 20% ;
[All Returns in CAGR]
Ansal's residential projects in Prime Delhi have witnessed a price CAGR increase of 15-17% over the last 35-40 years. Based on recent transaction, prime South Mumbai [Carmichael Road] bungalows have registered 15% CAGR over the last 60-70 years.
Mumbai (Napeansea Road) over a period of 90 years returned 15% ;
Prime Delhi (Kasturba Gandhi Marg, Barakhamba Road) over 40 years has returned 17%
Gurgaon over a period of last 20 years returned 20%
Chennai (T Nagar) over a period of 80 years returned a CAGR growth of 20% ;
[All Returns in CAGR]
Ansal's residential projects in Prime Delhi have witnessed a price CAGR increase of 15-17% over the last 35-40 years. Based on recent transaction, prime South Mumbai [Carmichael Road] bungalows have registered 15% CAGR over the last 60-70 years.
Wednesday, November 03, 2010
RBI Checkmates Luxury Residential Projects
The RBI has introduced three measures, which we believe will primarily
impact premium and luxury residential projects.
The RBI has increased the risk weight for residential housing loans of INR7.5m and above, irrespective of the loan-to-value (LTV) ratio, to 125%. However, risk weights for other loans remain unchanged.
So Luxury in India means over 75 Lakhs.
The LTV ratio for home loans has been capped at 80%. Lenders typically have an average LTV ratio of 70%. Hence, we see no significant impact on end-user demand from the 80% LTV imposition. The LTV however, should curb price rises and speculation over the near term in the luxury segment.
The RBI has raised the standard asset provisioning for all 'teaser rate' loans to 2%, from 0.4%. We believe this would end the 'Teaser rate' campaign wherein lenders offered a lower initial 'interest rate' (50bps below the current rate) and calculated affordability (or ability to service loan) of a buyer on the lower interest rate
impact premium and luxury residential projects.
The RBI has increased the risk weight for residential housing loans of INR7.5m and above, irrespective of the loan-to-value (LTV) ratio, to 125%. However, risk weights for other loans remain unchanged.
So Luxury in India means over 75 Lakhs.
The LTV ratio for home loans has been capped at 80%. Lenders typically have an average LTV ratio of 70%. Hence, we see no significant impact on end-user demand from the 80% LTV imposition. The LTV however, should curb price rises and speculation over the near term in the luxury segment.
The RBI has raised the standard asset provisioning for all 'teaser rate' loans to 2%, from 0.4%. We believe this would end the 'Teaser rate' campaign wherein lenders offered a lower initial 'interest rate' (50bps below the current rate) and calculated affordability (or ability to service loan) of a buyer on the lower interest rate
Thursday, October 28, 2010
Mumbai Residential prices riding high
Across all the major micromarkets, prices have risen by 10-30% since April 2010. This is after the 20-40% increases in the period October 2009–April 2010. For example, prices in Borivli, a western suburb in Mumbai, are currently at Rs8,000-11,000p sq ft, up from last year’s Rs6,000–8,000p sq ft.
Here are the latest property prices as we obtained from the Exhibition,
Ackruti Sunmist Andheri 16,600
Rustomjee Elanza Malad 12,500
Ackruti Gardenia Mira Road 4,800
Gundecha Symphony Andheri 13,800
Kalpataru Kalpataru Gardens Kandivali 9,500
Kalpataru Kalpataru Towers Kandivali 9,800
Lodha Eternia Andheri 12,500
DSK Developers Madhuban Andheri 7,700
Hiranandani Hiranandani Heritage Kandivali 11,200
Runwal Runwal Elegante Andheri 15,000
Ackruti Vedant Sion 12,500
Ackruti Siddhi Thane 6,300
Nirmal Lifestyle Citi of Joy Mulund 7,776
Nirmal Lifestyle Lifestyle City Kalyan 2,547
Lodha Imperia Bhandup 8,200
Hiranandani Estates Thane 6,700
Gundecha Zenith Mulund 7,200
Nirmal Lifestyle US Open Mulund 7,200
Hiranandani Meadows Thane 6,700
Runwal Pearl Thane 5,200
Runwal Greens Mulund 7,300
Kalpataru Aura Ghatkopar 9,500
Godrej Properties Riverside Kalyan 2,950
Continued strength in volumes at current price levels would hinge on: 1) expectation of continued growth in personal disposable income, i.e., a robust job environment; and 2) stable interest rate.
Here are the latest property prices as we obtained from the Exhibition,
Ackruti Sunmist Andheri 16,600
Rustomjee Elanza Malad 12,500
Ackruti Gardenia Mira Road 4,800
Gundecha Symphony Andheri 13,800
Kalpataru Kalpataru Gardens Kandivali 9,500
Kalpataru Kalpataru Towers Kandivali 9,800
Lodha Eternia Andheri 12,500
DSK Developers Madhuban Andheri 7,700
Hiranandani Hiranandani Heritage Kandivali 11,200
Runwal Runwal Elegante Andheri 15,000
Ackruti Vedant Sion 12,500
Ackruti Siddhi Thane 6,300
Nirmal Lifestyle Citi of Joy Mulund 7,776
Nirmal Lifestyle Lifestyle City Kalyan 2,547
Lodha Imperia Bhandup 8,200
Hiranandani Estates Thane 6,700
Gundecha Zenith Mulund 7,200
Nirmal Lifestyle US Open Mulund 7,200
Hiranandani Meadows Thane 6,700
Runwal Pearl Thane 5,200
Runwal Greens Mulund 7,300
Kalpataru Aura Ghatkopar 9,500
Godrej Properties Riverside Kalyan 2,950
Continued strength in volumes at current price levels would hinge on: 1) expectation of continued growth in personal disposable income, i.e., a robust job environment; and 2) stable interest rate.
Thursday, October 14, 2010
DB Realty Project Pricing Mumbai
Here is the Rate at which DB realty has sold some of its properties in Mumbai.
INR / SFT.
Orchid Ozone Dahisar 4,947
Orchid Suburbia Kandivili 9,470
Orchid Woods Goregaon 10,778
Orchid Turf View Island City 40,000
Orchid Heights Island City 19,997
Orchid Crown Island City 23,888
INR / SFT.
Orchid Ozone Dahisar 4,947
Orchid Suburbia Kandivili 9,470
Orchid Woods Goregaon 10,778
Orchid Turf View Island City 40,000
Orchid Heights Island City 19,997
Orchid Crown Island City 23,888
Thursday, October 07, 2010
Supply Vs Absorption Trends Across India
The Real Estate Absorption has been the highest in 2 years in Aug-Sept in most markets. Realtors are slowly exhausting their inventory and have slowed down new launches. Here is what he scenario is in the Metros.
Gurgaon recorded average monthly absorption of 1,726 units/months in Jul/Aug. This is 23% lower than 2Q average. On YTDCY10 basis the absorption run rate is down 4% as compared to CY09 average. Months of unsold inventory are at its record low of ~7 months.
Absorption pick up in Noida/Greater Noida has been astonishing as run rate in CY10 has tripled from 2009 levels. New launches by Jaypee Infratech and Supertech have contributed a lot to this.
Average monthly sale run rate in Jul/Aug (4,186 units/month) in Mumbai (including Navi Mumbai and Thane) declined by a 13%. Within Mumbai, South Central Mumbai have fared the worst with volumes down 40% Q/Q.
Absorption run rate (at 1,950 units/ month) in Bangalore picked up 13% Q/Q in 3Q despite July being a seasonally weak period (Amavasya). Overall residential volumes in Bangalore are up 13% Y/Y. Months of unsold inventory has been coming down consistently over the last two years and is the Worst Market for Investors because of unstable Government and Massive Money Laundering by Local Politicians.
Chennai is witnessing steady pick up in absorption with 3Q10 sales run rate (1,484 units) higher by 21% from 2Q10 levels. Overall residential volumes in Chennai are up by 5% Y/Y.
Gurgaon recorded average monthly absorption of 1,726 units/months in Jul/Aug. This is 23% lower than 2Q average. On YTDCY10 basis the absorption run rate is down 4% as compared to CY09 average. Months of unsold inventory are at its record low of ~7 months.
Absorption pick up in Noida/Greater Noida has been astonishing as run rate in CY10 has tripled from 2009 levels. New launches by Jaypee Infratech and Supertech have contributed a lot to this.
Average monthly sale run rate in Jul/Aug (4,186 units/month) in Mumbai (including Navi Mumbai and Thane) declined by a 13%. Within Mumbai, South Central Mumbai have fared the worst with volumes down 40% Q/Q.
Absorption run rate (at 1,950 units/ month) in Bangalore picked up 13% Q/Q in 3Q despite July being a seasonally weak period (Amavasya). Overall residential volumes in Bangalore are up 13% Y/Y. Months of unsold inventory has been coming down consistently over the last two years and is the Worst Market for Investors because of unstable Government and Massive Money Laundering by Local Politicians.
Chennai is witnessing steady pick up in absorption with 3Q10 sales run rate (1,484 units) higher by 21% from 2Q10 levels. Overall residential volumes in Chennai are up by 5% Y/Y.
Monday, October 04, 2010
Investors Punish Shady Realty Business Stocks
It is a well known fact across the world that Indian Real Estate is a shady business backed by Politicians and Mafia Dons taking hardworking legal & ethical Indians for a ride. It may come as a surprise to readers of this article from else where in the world, but the fact is the Indian society has accepted the evil of Parallel Economy / Black Money and majority of the elected representatives are against curbing this.
Anyway, the main theme of our write-up is how Real Estate Stocks have Destroyed investors Wealth and are still far from their 2008 Highs. So I hope you now understand our bearish stand on the Indian Real Estate Stocks.
Anyway, the main theme of our write-up is how Real Estate Stocks have Destroyed investors Wealth and are still far from their 2008 Highs. So I hope you now understand our bearish stand on the Indian Real Estate Stocks.
- Anant Raj Industries - High 360 - CMP -148
- Ansal Properties - High 400 - CMP - 95
- Brigade Enterprises - High 300 - CMP - 150
- DLF - High 800 - CMP - 386
- HDIL - High800 - CMP -272 [Bonus 1:1]
- IndiaBulls Real Estate - High 600 - CMP -180
- Jai Corp - High 6000 - CMP - 256 [Suspended / Splits - Backed by Chela of Mukesh Ambani. Stay away]
- Omaxe - High 400 - CMP - 144
- Orbit Corp - High 400 - CMP -125
- Parsvnath Developers - High 400 - CMP -145
- Peninsula Land - High 800 - CMP -68 [Split ]
- Purvankara Projects - High 400 - CMP -132
- Sobha Develoeprs - High 800 - CMP -390
- Unitech - High 180 - CMP -94
Sunday, October 03, 2010
Delhi NCR Current Prices - Residential Segment
Here is the latest update on the REsidential Apartment Property Prices in Delhi / NCR - Gurgaon, Noida, Manesar and Greater Noida as of Sept 2010.
Prices in INR / SFT.
New Delhi:
Prithviraj Road 50,000
Aurangzeb Road 50,000
Chanakyapuri 45,000
Golf Links 45,000
Shanti Niketan 35,000
Vasant Vihar 30,000
Anandlok 27,000
Friends Colony 25,000
Greater Kailash - I & II 20,000
Mayur Vihar 14,500
Okhla Tehkhand 12,750
Shivaji Marg 11,000
Model Town 8,700
Kapashera 5,000
Dwarka 5,000
Gurgaon/Manesar
DLF Phase V 7,600
Sector 66 6,000
Sushant Lok III 6,000
Sector 50 5,800
South City II 5,500
Sohna Road 4,700
Sector 109 3,200
Sector 103 2,900
Manesar 2,600
Sector 91 2,600
Dharuhera 1,900
Noida:
Noida EM Bypass 4,500
Jaypee Greens 6,000
Unitech Grande 6,000
Sector 52 4,500
Sector 100 3,700
Sector 119 3,300
Sector 77 3,200
Sector 143 3,050
Sector 137 3,000
Greater Noida:
Jaypee Greens 6,000
Gautam Budh Nagar 2,300
Taj Expressway 2,200
Noida Extension 2,100
Dadri 2,100
Prices in INR / SFT.
New Delhi:
Prithviraj Road 50,000
Aurangzeb Road 50,000
Chanakyapuri 45,000
Golf Links 45,000
Shanti Niketan 35,000
Vasant Vihar 30,000
Anandlok 27,000
Friends Colony 25,000
Greater Kailash - I & II 20,000
Mayur Vihar 14,500
Okhla Tehkhand 12,750
Shivaji Marg 11,000
Model Town 8,700
Kapashera 5,000
Dwarka 5,000
Gurgaon/Manesar
DLF Phase V 7,600
Sector 66 6,000
Sushant Lok III 6,000
Sector 50 5,800
South City II 5,500
Sohna Road 4,700
Sector 109 3,200
Sector 103 2,900
Manesar 2,600
Sector 91 2,600
Dharuhera 1,900
Noida:
Noida EM Bypass 4,500
Jaypee Greens 6,000
Unitech Grande 6,000
Sector 52 4,500
Sector 100 3,700
Sector 119 3,300
Sector 77 3,200
Sector 143 3,050
Sector 137 3,000
Greater Noida:
Jaypee Greens 6,000
Gautam Budh Nagar 2,300
Taj Expressway 2,200
Noida Extension 2,100
Dadri 2,100
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