Tag Archives: Investment Trends

Unitech-Telenor case referred to international arbitration

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unitech share news , real estate news, realty news , india realty news , india newsUnitech on Thursday, April 12, said the Company Law Board (CLB) has accepted the firm’s plea to resolve its dispute with Norway-based Telenor through international arbitration in Singapore.

Unitech along with Telenor run telecom business in India under a joint venture Uninor. The two firms have been at logger heads since quite a few months and the relationship got even worse post the Supreme Court’s order to cancel Uninor’s licences in India.

Both the companies had separately moved the CLB to protect their individual interests following court’s order.

While Telenor filed the petition to “prevent any wrongful obstruction” to its effort to secure its investments, Unitech filed one in response to prevent the Norwegian firm from assuming full control over the business, including assets of Uninor.

“We are pleased that CLB has accepted our plea and respected the shareholders’ agreement which clearly defines the dispute resolution mechanism for settlement of the issues relating to the shareholders’ agreement,” Unitech said in a statement.

Telenor, however, said: “We are yet again surprised at the order of the CLB. We will certainly challenge this order in a higher court, as we have successfully done on matters earlier.”

“There should be no doubt that we will do all that is necessary to secure the future of Uninor’s employees, customers and partners. Our intention remains to establish a new company as a platform for the future and transfer all Uninor assets, employees and customers to it,” said the firm.

Telenor has declared that it intends to form a new company through which it would carry on its mobile business in India and participate in the upcoming 2G spectrum auction.

In order to secure its $3 billion investment in the country, Telenor has also put diplomatic pressure on the Indian government

The firm has 67.25 percent stake in Uninor and claims 40 million subscribers across the country.

Income tax office freezes Unitech shares in Telenor JV

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unitech share news , real estate news, realty news , india realty news , india newsThe income tax department has frozen the shares owned by real estate company Unitech Ltd in its mobile phone joint venture with Norway’s Telenor, the joint venture said on Wednesday, citing notices from the tax authorities.

The joint venture, which operates under the Uninor brand name, said in a statement the stake was owned by three units of Unitech, but did not elaborate. It said the move would not have any effect on its operations.

Two sources with direct knowledge said the tax office had “attached” the shares over a tax demand on the Unitech units related to a deal with Telenor, in which the Norwegian company had taken a majority stake in the telecom venture.

One of the sources said Unitech had challenged the tax demand.

Unitech declined to comment, while a spokeswoman for the tax office was not immediately available for comment.

The joint venture is among the companies that are set to lose their cellular licences in early June after the Supreme Court last month ordered all 122 licences awarded in a scandal-tainted 2008 sale to be revoked.

Telenor, which had bought into the Indian venture after the licences had been awarded, has accused partner Unitech of “fraud and misrepresentation” and wants to migrate the business to a new venture and seek fresh licences in an auction.

Unitech is opposing Telenor’s move and both sides have appealed to the Company Law Board, a quasi-judiciary body.

Telenor owns 67.25% of the joint venture, while Unitech owns the remainder. The joint venture ranks eighth in a market of 15, with 41 million subscribers as of February.

India needs trillion dollar investment in urbanization

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By: Om Chaudhary, CEO, Fire Capital Fund

- india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Delhi NCR real estate, Mumbai Real Estate, Bangalore Real Estate, Pune Real Estate news,Track2Media, Track2Realty, ravi sinha The rate at which economy is growing our urban centers shall add at least 100 million people by year 2020 merely on the account of urbanization. To provide housing to so many people India needs to invest a trillion dollars over the next 10 years. This is equivalent to 80 times our education budget allocation for year 2011-12. While in the short-term there are concerns related to over-supply in certain markets the long-term outlook on an aggregate level is positive from institutional perspective.

Valuations is always a concern in a growing economy, India is no different. It becomes difficult to reach a common ground where interests of both investor and seller are aligned. The current environment presents a good opportunity for PE players to get in a deal on reasonable terms. Most of the investments are happening at a project level rather than entity level where PE players are able to secure their investment while eyeing above normal returns.

Finally sentiments for real estate are exemplified by the preference given to it as an asset class which corners more than 50% of the investment bucket of an average Indian national. Current tepidness is a short term down cycle which the sector will come out of as global conditions improve. Larger problems with the sector are in fact related to serious land title issues, long approval cycle, use of malpractices in execution and lack of financial depth in financial intermediaries which need considerable public-private participation to address comprehensively.

Private equity with long term capital is allowing developers to withstand short term cash flow pressures. Despite this being a much more expensive capital than any form of debt, developers accede to it as it allows them to scale up, build professionalism, obtain sophisticated advice and enter new markets. Many a time association of a PE player with a project also adds to the marketability as customer is assured of the financial discipline and corporate governance standards demanded by such financial institutions.

As we look at it, this is a symbiotic relationship which developers have started to appreciate due to reasons other than capital. On the whole it works to the final customer’s advantage who is assured of his investment and product quality, the benefit of which accrues to the project’s bottomline.

Need to distinguish between land acquisition and land purchase

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By: Rajeev Talwar- DLF Group Executive Director

- india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Delhi NCR real estate, Mumbai Real Estate, Bangalore Real Estate, Pune Real Estate news,Track2Media, Track2Realty, ravi sinha The recently tabled Land Acquisition, Rehabilitation & Resettlement Bill, 2011 in Parliament is meant to replace the 117-year-old Land Acquisition Bill of 1894.

This Bill calls for Relief and Rehabilitation, which was not there in the past legislation. These provisions would apply on acquisition of land beyond 100 acres in rural areas and 50 acres in urban areas.

The Bill permits the land acquisition under three broad categories, one wherein the Government acquires land for railways, ports, highways and canals. Two where it acquires to ultimately transfer it to private companies for a given public purpose and third where the Government acquires land for immediate and declared use by private firms for public purpose. The land acquired other than the first category would require the consent of 80% of the affected population for acquisition beyond 100 acres and further the public purpose, once stated, cannot be amended.

It is important here to clearly distinguish between land acquisition and land purchase. Land acquisition is only done by the Government for a public purpose. In the case of a land purchase, it is a transaction that is done between a willing buyer and a willing seller at the open market rates. Therefore, transactions are between willing sellers and willing buyers, there is no justification for the Government to impose any condition of relief and rehabilitation on such private sector transactions. Private transactions take place at market-determined rates and give full compensation to the sellers. It would be only fair that conditions of R&R be imposed only where Government acquires land.

The fact is that developers normally purchase/assemble such lands on the outskirts of metropolitan and urban areas. In such cases, the landowners themselves are willing to sell land on account of the attractive prices that they are offered. Further, without any compulsion, the landowner decides to carry out a private transaction based on the market value of the land. In such a case, the introduction of R&R would hold no credence as the seller would lose money due to subtraction of the value of the R&R package from the prevailing market rate. Free market prices self-account for R&R benefits and the farmer is under no compulsion to sell the land. Therefore such purchases should be kept outside the ambit of the present Bill.

Another critical issue that this Bill, in its present form, will lead to is a decline in the number of affordable homes desired by the large middle class population of this nation. Compensation is proposed to be raised to four times the market rate in rural areas and double in urban areas along with Rs 5 lakh compensation to the displaced persons; the provision for displaced families is to be Rs 3,000 a month for 20 years; 20 per cent of developed land is to be given to owners and 20 per cent profit on each transfer of land within 10 years is to be shared with owners; all these would lead to huge price escalation for the home buyers.

The industry is also likely be hurt by the R&R package, which is unfairly loaded on it. Also, the retrospective effect clause would adversely impact land prices.

Clearly, there is a need for proper assessment and research. Critical issues like land acquisition do not warrant any hasty policy decision. It calls for a larger public debate to address the multitude of stakeholders before moving forward on it.

Road ahead for PE funding in real estate

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By: Om Chaudhary, CEO, Fire Capital Fund

- india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Delhi NCR real estate, Mumbai Real Estate, Bangalore Real Estate, Pune Real Estate news,Track2Media, Track2Realty, ravi sinha It has been a difficult market to be in as a developer. Rising interest rates have impacted the customer interest in new properties moderating the flow of new funds and in addition to that high inflation and rising commodity prices have increased substantially the delivery cost for existing projects. Saddled with pressure to deliver on their previous commitments and fraught with balance sheet liabilities due to financial imprudence, developers are desperately seeking new channels of money.

Traditional funding channels such as banking, public markets have largely become out of reach as financial institutions do not want to increase their already high levels of exposure and public market listings in real estate have performed rather poorly.

With a long term play in mind Private Equity players are keen to capitalize on this need gap. According to reports PE funding into real estate has gone up from USD 480 million in Q1 2011 to USD 504 million in Q2 2011, which are at significantly higher levels when compared to figures for the same period last year.

Professional investors look at combination of three key factors, market opportunity, valuations and sentiments. Long-term opportunity in real estate sector exists and is in the same bracket as the other unfulfilled fundamental needs such as healthcare, education and infrastructure. There exists a huge supply deficit which the country faces today. National Housing Board estimated a shortage of 25 million homes by 2012-13.

FDI rises 31% in 2011, realty gets its share

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- india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Delhi NCR real estate, Mumbai Real Estate, Bangalore Real Estate, Pune Real Estate news,Track2Media, Track2Realty, ravi sinha Despite a gloomy global outlook, foreign direct investment (FDI) clocked a 31 per cent growth to $27.5 billion during January-December 2011 period. FDI inflows for January-December 2010 stood at $21 billion.

Services still attracted largest chunk of FDI inflows at 20 per cent. This was followed by telecom, housing and real estate, and construction and power among others, a Department of Industrial Policy and Promotion data said.

Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE are the major investors in India.

Mumbai attracted the maximum inflow accounting for as much as 40 per cent of the total share of the FDI, followed by Delhi-NCR region, Bangalore and Ahmedabad closely following.

FDI inflows totalled $19.42 billion in 2010-11 financial year, down from $25.83 billion in 2009-10.

Official sources said that the Government’s move to liberalise foreign direct investment polices has been instrumental in sending positive signals.

Some of the norms that have been tweaked in the past include 100 per cent investment in single brand retail besides easing norms in share pledging for external commercial borrowings.

Consim Info to expand footprint in online property market

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Economic Survey, Real estate survey, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyConsim Info Pvt. Ltd with online brands such as BharatMatrimony.com, IndiaProperty.com, EliteMatrimony.com and PrivilegeMatrimony.com has announced plans to expand its footprint in the online property business. The company said it will increase market focus in the Western and Northern regions and expand Indiaproperty’s current market leader position across all four southern states to these markets, as a part of its growth strategy.

Consim Info has also repositioned Indiaproperty.com  and announced marketing spends of  20 crores for the current financial year to support its expansion plans and unveiled its new look portal with advanced first time ever features such as video interviews with builders and developers, virtual property tours and online fairs and its new advertisement, kick starting the new marketing campaign.

Speaking at a press briefing held in Mumbai, Murugavel Janakiraman, Founder & CEO, Consim Info Pvt Ltd, said, “Our property portal business has been witnessing significant growth in alignment with the surging demand for new property and we believe the time is right for us to leverage our experience in online businesses and establish our leadership in this area as well.  We recently crossed the 1.5 million mark in registered users with 250,000 unique daily visitors and more than a million page views a day, establishing us as the number one property portal in the country. Our increased business focus in this area and strengthening of the senior management of Indiaproperty, should help us scale new heights this year.”

Detailing the growth plans, Ganesh Vasudevan, Vice-president and Business Head, Indiaproperty.com said, “IndiaProperty has been growing at over 100% over the last year in terms of revenue and number of projects and this growth has been lead by the Western region. The company is exploring strategic partnerships with builders and agents in the state and is in advanced talks to sign exclusive marketing agreements. We expect the Western and Northern markets to contribute to nearly 50 % of our revenues this year and these are key geographies for us in our expansion plans. Our sales and service delivery teams are being strengthened in alignment to our growth plans.”

PE Analytics plans to launch Real Estate Index

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Economic Survey, Real estate survey, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyNew Delhi-based research firm PE Analytics has drawn up plans to launch Real Estate Price Index in partnership with a leading commodity exchange.

PE Analytics owns and operates PropEquity, an online subscription-based real estate data and analytics portal covering over 27,000 projects of 5,100 developers across 40 cities in India. The data and analytics enable clients to spot market trends and maximise risk-adjusted returns.

“We are launching the First Residential and Commercial Indices based on transaction prices in partnership with the leading commodity exchange shortly after a nod from the Government,” PE Analytics CEO Samir Jasuja told PTI in Mumbai.

These indices will be based on the actual transaction and registration values prevailing in various micro-markets for the residential and commercial asset classes.

PropEquity is collaborating with India’s banking and finance regulatory body and the country’s largest commodity exchange to develop housing starts and realty indices.

The indices will be the barometer for measurement of the real estate sector performance and will also enable trade on the exchange. The company is looking at September 2011 to go live with this product offering, Jasuja said.

PropEquity has created products that are unique in the Indian context, and which have been validated through the market and with marquee customers, he said.

With future plans already underway, Jasuja envisions PropEquity as a pan-Asia product and intends to raise a second round of funding for the company in 2011.

Hiked interest rates – Impact on the real estate sector

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Track2Media, Track2Realty, India Real Estate News, real estate news india, india property news, india property investment news, Jones Lang LaSalle India, India Realty news, realty news india, india property news, property news indiaIt has always been axiomatic that when financial institutions raise their lending rates, there are bound to be ripples on the highly cost-sensitive Indian real estate market. The latest rate hike obviously means that  the cost of construction has gone up for developers, and this move by the RBI certainly does not come at the best of times for them. Banks have already taken a cautious approach to real estate lending and reduced their exposure to the sector, and most developers are now prevailed upon to raise a larger component of their construction costs from the private sector. The fact that such funds come at a higher cost of borrowing has already increased their construction costs significantly.

It would be logical to assume that, hoping to maintain their profit margins under such circumstances, developers would not hesitate to mark the incremental burden to buyers. This would certainly happen if buyer sentiments and resultant market activity were high enough to accommodate such a move.

However, the market for residential real estate is far from effervescent at the moment. In a scenario where staying competitive and selling stock is of utmost essence, developers are unlikely to increase the cost of their units and thereby risk losing more customers. While this will certainly impact their revenues to an extent, most developers do see a sufficient profitability quotient to make a strategic decision on this count.

On the buyer side, the low-to-mid income segments are invariably the most affected by a hike in home loan interest rates. That said, the impact of increased cost of borrowing is not as severe as that of the decreased allowable percentage of borrowing. Where this used to be at a steady 85% of the overall cost of the property, most banks are not extending more than 75% now. The fact that the salaried class now have to supply a higher contribution to the cost of their homes that is having a very tangible impact on demand.

The author, Ashutosh Limaye, is Local Director – Strategic Consulting, Jones Lang LaSalle India

TCG-Vornado fund to invest Rs 270 crore in NCR, Mumbai projects

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Eldeco Meadows, Real Estate Investment, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyIndia Property Fund, managed by NRI investor Purnendu Chatterjee’s TCG Real Estate and US-based Vornado Realty Trust, is in the final stages of investing Rs.270 crore in two residential developments in national capital region and Mumbai.

The fund will invest Rs.150 crore and Rs.120 crore in housing projects in Mumbai and Noida, respectively, and pick up 40-45 per cent in each of the projects, according to the sources close to the development.

“The $ 400 million Fund works with land-owners, state governments and developers (particularly mid-size developers who lack both capital and management talent) to develop international-quality real estate products, which cater to the high demand sectors of the industry. The Fund takes both controlling and minority positions,” says TCG Real Estate’s website.

The Fund also looks at investing in related sectors such as construction, mortgage financing and infrastructure. The Fund invests between $ 5 million to $ 50 million in each investment, the post says. TCG Real Estate is the property development and investment arm of Purnendu Chatterjee’s The Chatterjee Group

Property developers are increasingly turning towards private equity funds for financing their projects as commercial banks have tightened their lending to real estate.

“With fresh lending remaining tight, PE players have started to get busy, as all developers have begun to offer good quality assets to raise project level PE fundings,” say analysts from Enam Securities in a recent report.

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