The Urban Development Ministry has estimated a shortage of over 20 million homes in India, and has called for reforms in the Indian real estate market, with better coordination between the central and state governments. The Union Urban Development Minister emphasized the need for stronger public-private participation to improve India’s infrastructure at an award presentation ceremony in Mumbai last week. Real estate developers on their part, went ahead with land acquisition, project planning, execution, and marketing activities over the last month, undeterred by the high interest rates and leveling in demand.
Some record-breaking land deals

have been made by developers in purchasing land as rates eased to a certain degree. DLF’s purchase of 39 acres from DCM Shriram and the Lohia’s for Rs.1,675 crore in August have set new benchmarks in Indian real estate. HDIL used some of its Rs.1,450 crore of funds from the IPO to purchase a 8.32 acre property in Mumbai for Rs.124 crore. Real estate Gurgaon developers have taken to buying out textile mills to develop commercial and residential projects. The House of Pearl Fashions property on the Delhi-Jaipur highway will be developed jointly with Ansals API, while Bestech has tied up with Orient Craft for an IT space.

Marketing activities

….by Indian real estate developers are getting more focused on the NRI investor. While Indian investors wait for interest rates to come down, real estate agents are wooing NRIs through promotional activities at Indian property exhibitions in the GCC and USA. These have drawn large crowds, with an encouraging number of conversions taking place at these venues.

New players in the arena

such as Punj Lloyd, the energy and infrastructure giant, tied up with the Ramprastha Group for residential projects in Vaishali, Indirapuram and Gurgaon. The Hyderabad-based Ocean Park Group, established in the entertainment industry has launched two mega real estate projects in Visakhapatnam and one in Hyderabad

Fresh Investments

BPTP received its second funding in three months - Citibank purchased equity worth Rs.325 crore after Merrill Lynch invested Rs.218 crore in the company three months ago. The Indiareit Fund will invest Rs.225 crore for 17 projects of Skyline Constructions in Karnataka for the development of Rs.700 crore worth projects in the next 3 years.

Broadening horizons

DLF won the contract to build an international convention centre for the DDA in upcoming Dwarka to meet the requirements of 2,000 delegates. The Rs.6000 crore centre will be supported by a shopping and commercial complex, multiplexes, hotels, boarding facilities for international students and diplomats, a global arts village and sports facilities. The real estate major also signed two deals this month for residential projects in Chennai and Durgapur. In Chennai, 2 projects on plots of 60 acres each on Old Mahabalipuram Road, will offer 8500 homes in every category at the rate of Rs.2, 750 per sq. ft. In Durgapur, a 95 acre township project was won by DLF from the Asansol Durgapur Development Authority. Another realty major Ansal API, launched its 200 acre Sushant City project in Kurukshetra and entered into a partnership with IL&FS Investment Managers to set up a township and IT SEZ in Gurgaon at an investment of USD 125 million.

Golf-centric residential townships

are the new rage with builders from Hyderabad to Noida to Lucknow embarking on such projects. While Jaypee Greens in Noida and Ansal’s Golf City in Lucknow are already under way, Ocean Park from Hyderabad has announced a 150 acre Prestige Golf City at Denkada, 37 kms from Visakhapatnam. Ocean Park has also launched a Prestige Blues project which will have a Film Studio, and a Sea and Amusement Park within the 150 acre campus. The Prestige Global City is again a landmark 1000 acre project on the Hyderabad-Vijaywada highway with the unique concept of colonies representing architecture of different cultures. High performer Sobha Developers, whose net profit recorded 141% in the 1st quarter of 2007-08, announced its integrated township, the Sobha Hitech city in Kerala at a cost of Rs.5,000 crore. Gurgaon based Vipul Ltd. plans to go national with an investment of Rs.2000 crore over the next two years. Vipul’s new projects will be focused in Nagpur, Bhubaneswar, Chandigarh, Ludhiana, Mohali and Dharuhera

A crossover of realty companies

across borders was witnessed this month - Parsvnath declared its intention to enter the overseas realty market, tapping Sri Lanka, Mauritius, Singapore, UK and West Asia. It has already signed up with the Al-Hassan group of Oman for housing and retail projects. Dubai-based SS Lootah entered the Indian real estate market with the purchase of an IT company in Thiruvananthapuram, and is interested in taking on infrastructure, health care and real estate projects.

Professionals on Board
As India’s real estate market matures, the developers have felt the need for more professionals on its board. Some personalities who are bringing expertise and professionalism into Indian real estate include ex-ONGC CMD Subir Raha who has joined Nitesh Estates of Bangalore; Firdose Vandrevala, former MD, Motorola and Tata Power who has taken over the reins of Hirco; Indiareit, who inducted former SBI Chairman A K.Purwar on board, and HDIL, who appointed ex-deputy RBI governor T.S.Talwar at the helm.

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