letter from the editor

Dear Reader, city is made by its people, not by its building structures or road and railway networks. While doing this special edition on Bangalore and its real estate growth story, the underlying theme on various facets of the city was borne out by the stories of people residing in Bangalore. The citys best attractions are well-known job opportunities which actually rode the real estate boom in Bangalore, unbelievably good weather that suits expats as much as Indians, and most importantly, welcoming people. But something far more important, for which people come back to the city to settle down is taken for granted. Young professionals who started their career in Bangalore pine for the citys unique lifestyle much later in life, even when they stay in the best of places around the world. If one goes by the networking sites where such professionals spend time posting on the wall everyday, the top of the mind attraction for them is freedom that the city offers. Though the obvious advantages of working in Bangalore for professionals, businessmen and blue-collared workers, not to mention people engaged in the rest of the corporate world, are overstated, liberty and the devil-may-care attitude of the city escapes from registering in peoples minds. Freedom to choose a vocation without feeling ashamed of revealing it, freedom to perform and excel at work without having to counter the rigours of reservations, freedom to consume liquor at the age of 18, freedom to buy a flat for a live-in relationship and have a roaring sex life, amongst many other things make Bangalore a young professionals ultimate destination. When some fringe religious organization called Ram Sene attacked pub-going women in Mangalore a few months ago, the city of Bangalore took a collective gasp. But all this freedom is taken for granted. In the wake of the deep economic recession in the West that had an equally devastating effect on the IT industry, nothing looked redeemable, least of all real estate development in Bangalore. But today, most players concede, the return to normal business is just a matter of time, and that too not too long away. All these put together, we learnt, during our meetings with industry players in real estate, infrastructure, banking and finance, interiors, exteriors and accessories industry and a few architects and lawyers in Bangalore, make the city a sought-after market for developers, as much as it does for professionals and young job-seekers. It is quite disingenuous of US President Barack Obama to try and arrest US job losses to Bangalore, and even derisively covert the name of the city to a verb. The fact of the matter is that Bangalore offers the best not just in terms of weather and climate for investments, but also in terms of lifestyle provided by innovative developers in the city. The renewed sprightliness in the sector is reflected by the demand growing across the office and residential space. The real estate sector in Bangalore will ride the crest again, and that too, as predicted by most property experts in the city, much sooner than most people think. Continuing with this trend, the editorial team at Property World will be bringing you a series of city and state specific reports in the following editions. Real estate players, mostly coming from abroad, find the Indian real estate markets quite confusing as one region is entirely different from the other. What confounds them further is the fact that statistics and data on these regions are difficult to come by to take an informed decision. We sincerely hope this special edition and the following ones will serve that purpose. If you feel otherwise, just drop in a mail. Cheers! Anil Parameswaran Nair Executive Editor aniln@ubmindia.com

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July, 09

Head Office UBM India Pvt Ltd, 1st floor, 119, Sagar Tech Plaza - A, Andheri-Kurla Road, Saki Naka Junction, Andheri (E), Mumbai 400072, India Tel: 022 6769 2400; Fax: 022 6769 2426 Copyright: UBM India Pvt Ltd Printed at Indigo Press (India) Pvt Ltd, Plot No 1c/716, Off Dadaji Konddeo Cross Road, Byculla (E), Mumbai 400027 Important For private circulation only. Every effort has been taken to avoid errors or omissions in this magazine. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice immediately. It is notified that neither, the editor or the seller or its employees or agents will be responsible in respect of anything and the consequence of anything done or omitted to be done by any person in reliance upon the content herein. This disclaimer applies to all readers of this magazine. UBM India Pvt Ltd. All rights are reserved. No part of this magazine may be reproduced or copied in any form or by any means without the prior written permission of UBM India Pvt Ltd. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only. While care is taken prior to acceptance of advertising copy, it is not possible to verify its contents. UBM India Pvt Ltd. cannot be held responsible for such contents, nor for any loss or damages incurred as a result of transactions with companies, associations or individuals advertising in this magazine. We therefore recommend that readers make necessary inquiries before sending any monies or entering into any agreements with advertisers or otherwise acting on an advertisement in any manner whatsoever.

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contents
cover story

vol. 1 No. 4 juLY 09

Telling 10
q u ot e s o f t h e m o n t h
made available at an interest rate of 5 to 7 per cent and weaker sections should get at 3 per cent. must provide incentives to developers to make 1 Govt investment in real estate. All housing loans should be
Pravin Doshi, President, Maharashtra Chamber of Housing Industry (MCHI)

was always political will, but this time there is 2 There political alignment

Ravi Bhamidipati, India engineering and construction leader, PricewaterhouseCoopers, on the new government thrust on developing infrastructure

4
July, 09

Bangalored!
As the economic tide turns, is Bangalore gaining a formidable premier position amongst metro cities? Our special city coverage
Cover design Shekhar Parkhe

30
in depth

The Budget should provide forward momentum for real estate mutual funds, so that real estate becomes accessible to retail investors as well.
Anuj Puri, Chairman and Country Head, Jones Lang LaSalle Meghraj

22

projects are being sidelined due to 4 Redevelopment the inordinate emphasis on conservation. This overenthusiasm needs to be curtailed.
Manoj Dahisaria, President, Practising Engineers, Architects and Town Planners Association

Mid-income housing Reflecting the pulse of the market

Book Review

it is mystery to me how developers are 5 Actually, claiming sales when the market is still sluggish. I
Pankaj Kapoor, Liases Foras, real estate rating agency

5
July, 09

A case study of how a budget home developer started a successful trend when most others were sold to the idea of luxury housing

believe that there is still scope for another 20 per cent correction.

38

live in rented flats as they cannot afford to 6 People buy property and if such high taxes are levied, it will only aggravate the housing problem.
KV Satyamurty, President, Federation of Accommodation Industry of India

leaders

Perspective

20

Writing on the wall

Triumph of Humility The Making of ETA by M M Mohiuddin

Ram Pradhan is wrong SEZ is not a failed concept

news briefing
All the news round up from real estate, infrastructure, banking, etc.

regulator can make the change

Sustainability 26

7
39 41

By Invitation
Manoranjan Sharma & Sreedhar Krishnamurthy

SBI has brought down its PLR to 11.75 per cent from its peak of 13.75 per cent last year. There has been a general demand for lower interest rates and we have been able to do it because of certain efficiencies in operations.
SS Ranjan, CFO, State Bank of India

You can do away with air conditioning

Legally Yours 34

special report

Mumbai Residential Market to ease Mumbai retail to face oversupply TOKYO most expensive, Mumbai ranks Sixth in rentals
data
News you can use

residential segment will see revival of demand 8 The and price rise in 2010 but on an average there is room for further correction in prices of up to 10 per cent.
Sudhir Nair, Head, Crisil Research

safety has become a major priority area and 9 Road efforts are underway to ensure that the number of accidents come down significantly
AK Parida, Principal Secretary for transport, roads and buildings [Andhra Pradesh]

Innovation

16

Virtual office alleviates pain of high costs

karnataka has fewer archaic property laws

Project approvals and clearances are not major hurdles in Karnataka. The laws here are more conducive.

50

state has been facing load-shedding for up to 14 10 The hours a day. On what basis are we going to seek votes from the people?
Maharashtra Pradesh Congress Committee office-bearer

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leaders

Ram Pradhan is wrong

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July, 09

he Ram Pradhan report on 26/11 terror attack on Mumbai has been categorical in most respects, even as Mr Pradhan has been eloquent on television news about what went wrong in the citys security system. Though parts of the report have been held back by the state government in a brazen attempt to save its own skin, the charges made by the two-member committee are hugely misplaced when it comes to blaming star hotels. The committee almost makes it look as if the star hotels, in this case the Taj, Oberoi and Trident, all based in south Mumbai, had it coming. The police warnings and various guidelines for adequate security measures to be taken on the basis of intelligence reports, Mr Pradhan and V. Balachandran allege, were ignored or taken as routine affair by the hotels. The police received intelligence reports in August-September last year about impending attacks by terrorists who would enter the city from the sea front. Though the warning was passed on to the hotels, the latter seem to have not conceded to additional police security. We are yet to get a complete picture of the events leading to the attack because only one of the three hotels has actually responded to these accusations. The response given by the Taj Group is the standard reply about how the Group puts security of its guests and its personnel at highest priority. That is the way it should be. No one is privy to the security arrangements inside the hotel, yet one gets a feeling that the lobby of most of the star hotels in Mumbai today are swarming with undercover agents. What Mr Pradhan and Mr Balachandran missed out in their analyses is that hospitality

industry is about gentle and gracious treatment of guests. The hotel staff is not expected to strip naked every guest who walks into their lobby. The police have conveniently passed the blame to the private hotel managements in the hope that there will be enough public aversion to the five-star culture which entails gentle treatment of guests. The second most important issue here which the committee as well as the over-the-top media lost is that if the police were in possession of intelligence reports as pointed as to say that the terrorists will enter the city from the sea, then why was no security beefed up along the water front. The sloppy response and the death of all the three top anti-terror squad chiefs minutes after the attack started, tell so much about the police preparedness. The worst was the state chief ministers own admission that the ATS was ill-prepared for the attack. In a news channel interview Ashok Chavan told the anchor that the bulletproof vests provided by the state to the ATS are meant to control crowd, and not counter AK-47-wielding terrorists. By all measure, the hotel managements are much better placed and agile enough to take prompt action when an advisory is issued to them by the police. Terrorism is a war against the state, and fighting terror is the states responsibility from organizing intelligence, to beefing up security at vulnerable points, training security men and taking care of citizens. State governments have to team up with the Centre and share resources. Individual private companies or organizations cannot deal with terrorists, howsoever hard they try. The government has to, at appropriate times, employ military or diplomatic pressure on all

our neighbouring countries which are known to give shelter to anti-India terrorist organizations. The whole government machinery has to be mobilized to deal with this scourge of modern times. It will be ridiculous to watch gun-totting security personnel lining the walls of Taj banquet halls, whenever it receives an advisory from the government. Chairman of the Tata Group Ratan Tata, a few days after the event, complained that the fire brigade took more than an hour to reach the spot and deal with raging fires at various places in the hotel during the three-day blitzkrieg. The fire station is just about walking distance from the hotel. If traffic conditions prevent fire engines from reaching places in time, then what has the state even today done to ameliorate the situation. And this is just one instance of how government is ill-prepared to deal with another attack of this kind. In most developed countries, the police and all the other public utilities are encouraged to think of dealing with multiple situations on an on-going basis. Every public department, be it the police, fire, medical or other emergency services, constantly comes up with probable situations and trains its personnel accordingly. The idea is to preempt the attacker. In Mumbai, or for that matter anywhere in the country, such a practice does not exist. The only hope comes from specialized teams like National Security Guard and its ilk. Ratan Tata, a few weeks after the attack, told the press that his hotels will have their own forces and systems to deal with terrorism. That statement reveals the desperation of the citizens as much as that of the private sector. Also, even after eight months of the event little has changed. The pity of it all, Iago, the pity of it all!

leaders

SEZ is not a failed concept

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July, 09

he Special Economic Zones [SEZ] have of late run into trouble due to both the recession and the problems of implementation. But not many are ready to admit that. The debate on the merits of such investment intensive schemes, which can get hijacked by any of the stakeholders, is clearly on viability. Also, are investments into these islands starving more worthy projects, or those projects that desperately need sops to take off? There are those who believe that these are examples of a policy gone astray, a case of misallocation of resources and that, it is time to take a re-look at the scheme. The recession has led to a whole host of developers including prominent players like DLF wanting the government to denotify their SEZs. Developers see no way of making such huge investments at this juncture. Many projects are in a limbo. The protagonists of this point of view have no doubt been influenced by the hype and bad publicity that SEZs have been subject to, following the violence in Nandigram and Singur in West Bengal, the less violent but successful opposition of the scheme in Goa and the opposition to the Maha Mumbai project in Maharashtra. They also believe that the level of investments which are close to Rs2,00,000-crore in projects under implementation are too small to make a difference to the countrys growth rate, exports or employment. However the point is, India does not have much choice. The Special Economic Zones

promoted as growth centres are vital, if we have to compete globally as well as expand employment domestically. India needs to compete globally in terms of its products, and creation of SEZs is the best way to do so, while also incidentally, bring in latest technology. Agriculture is no doubt important for the country but as R K Jha, urban expert who is also involved in SEZ development points out, all SEZs put together will utilize .001 per cent of the land. The income generated from exports will be many times more than the income generated from agriculture. 10 acres of land in agriculture will give you an income of Rs1.5-lakh per year. The same land put to industrial or commercial purpose will give you 1-lakh employment and income of Rs4-5-lakh per person per year. The net income from agriculture is hardly anything. All SEZs together would be about 30,000 hectares. Most of the SEZs will be successful only if they are close to the city. These are SEZs for manufacturing electronic services, which need educated manpower, mostly city-bred. They will not be successful if they come up in an isolated area as the social infrastructure will take a long time to build up. Today Bangalore has the maximum number of operational SEZs. When the Maharashtra Industrial Development Corporation [MIDC] acquired land in different areas for industrial purposes, there were no objections raised. The area required for SEZs is contiguous land, all of which can not be acquired through negotiations. Where required, the government should

intervene with of course riders attached on the infrastructure and industries that should come up within a certain time limit, say within four or five years. Ultimately, the objective should be to generate employment at the earliest and after all, the people in the area would be given preference for jobs created. With so much employment generated, there will be greater incentives for farmers to grow cash crops as there would be a ready market for it. With more purchasing power, agricultural products would fetch better prices too. Jha also cites the example of Navi Mumbai city itself where there was tremendous resistance from farmers during the land acquisition process. Where earlier most of the people were below poverty line, the next generation has benefited and there is prosperity. The SEZ debate has been hijacked and unnecessary hype created without understanding that nothing can happen overnight. The SEZ Act came into force only in 2006, it is a very conducive policy framed by the government but several states including Maharashtra have not yet passed the SEZ Act. We still have a long learning curve. The idea behind bigger SEZs is to make them economically viable, and not too dependant on the nearby cities or eat up the resources of the city. You need 40,000 acres so that you have independent power and water supply, which is not possible in 1,000 acres. When it is a question of 30,000 or 40,000 acres there are bound to be attendant issues. It may be mangrove land or fish beds, but the fact remains that all areas adjoining the city need not be barren. Today, we are not competing with different industries in India, but competing with the world. SEZs are meant for that. Only if our products become competitive globally, will we be able to export and get better returns, as well as new technology. To make it economically viable, you need the size. The problem is that we do not see gradual development, we want overnight wonders. Finally, the most important issue for the country today is that the development model taken up by successive governments for the last six decades has been a stop and go affair. In a diverse country like India where poverty reins supreme, there is little doubt that SEZ model is the only way to create pockets of prosperity and improve standards of living. That is also the reason why China had adopted about this idea in the first place. But in the long run, the government should spend some time thinking about the wealth disparity that would be created within and outside of a SEZ.

news briefing
Edited by Bhaswati Das

Infrastructure

Road projects to be put on fast lane

he road transport and highways ministry will seek the Cabinets approval to overturn an existing system for awarding projects as it seeks to expedite the plan to build 20 km roads per day. Under the existing system, the nodal National Highways Authority of India (NHAI) has to invite bids first on a buildoperate-transfer model under which the operator recoups the expenses by collecting a toll for

a designated period after the highway is completed. NHAI can go for the annuity or Engineering Procurement Contract (EPC) model, where an

open tender is called and the project awarded to the lowest bidder, if it fails to get any developer via the BOT model. According to the new proposal, a committee under the chairmanship of road transport secretary will assess the viability of awarding a contract on the BOT model before the tender is invited. It will decide the model of development of the project before initiating the bidding process.

Reliance Infra turns to local banks for finance

Hyderabad Metro: Decision on Maytas fate soon

he decision on whether to continue with the Maytas Infra Ltd-led consortium for the Hyderabad Metro Rail project will be taken by the Andhra Pradesh government in the first week of July, according to municipal administration and urban development minister Anam Ramnarayana Reddy. He said a meeting would be held shortly and various milestones achieved in the project, ever since

it was awarded to Maytas Infra, would be reviewed. The concession agreement and its clauses would be reviewed at the meeting, said a senior official, adding the government was serious about the clauses and there was no question of taking a soft stance. The government is already weighing various options, like retendering the metro project or taking it up on its own with some funds from the Centre under the

Jawaharlal Nehru National Urban Renewal Mission (JNNURM), in case Maytas fails to execute the project. Maytas, promoted by the family of Satyam Computer Saervices founder B Ramalinga Raju, had failed to achieve financial closure for the Rs 12,100-crore elevated metro rail project in March and sought an extension of the deadline by six months.

fter staying away for over six months for different reasons, construction companies have started looking at private projects again as the situation on the ground improves. The onset of the downturn late last year had resulted in delays in payments from clients and deferment of expansion plans of companie, making infrastructure firms averse to private contracts.

Infra cos show renewed interest in pvt contracts

Instead, they focused on contracts awarded by government bodies and public sector companies where they were surer of timely payments. S Ramnath, Senior Vice-President of Chennaibased Shriram EPC, believes infrasturucture companies cannot afford to ignore private projects now. There is definitely a more positive current after the new government came in. S K Sachdeva, Executive Director, Finance, Ahluwalia Contracts, feels things have improved over the last few months. Payments from Emaar MGF, which it is working for in the Commonwealth Village project, were pending for four months but the situation has improved with the Delhi Development Authority coming to Emaars rescue.

he Anil Dhirubhai Ambani (ADA) group company hasnt yet got the contract for executing the second phase of the Mumbai Metro, but Reliance Infrastructure (R-Infra) CEO Lalit Jalans team has already started negotiating with domestic banks to tie up funds for the estimated Rs 1,000-crore project. R-Infra was the lone bidder for the 32-km metro project. It quoted a viability gap figure of Rs 2,298-crore, which was much less than the permissible limit of 40 per cent (or Rs3,064 crore) of the total cost of the project, which is Rs7,660-crore. It turned to local banks for most of the Rs 1,190 crore it borrowed for phase one of the Mumbai Metro, which will cost a total of Rs 2,360 crore. The other big project that R-Infra is executing Indias first rapid airport rail service which will traverse the 23 km into Delhi at speeds of up to 130 km/hour. The total investment in the Metro projects and the rapid airport rail service is Rs12,560 crore. R-Infra is set to buy the 11-km Bandra-Worli Sea Link. It has become one of the largest developer of roads and highways projects. Financing the large projects is a big issue a reason why R-Infra recently issued up to 43 million preferential shares to its founders and other investors to raise about Rs4,300-crore. The equity capital will enhance its networth to over Rs16,000-crore and augment its borrowing capabilities to Rs32,000 -crore at a debt-equity ratio of 2:1.

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July, 09

Heritage

Churchgate building eyes tentative world list

he building in Churchgate at Mumbai, that housed the administrative offices of Western Railway, has been proposed as an entry in the tentative list of world heritage sites. The proposal comes up for consideration next month. If it is

accepted, the building will be the 30th entry in the tentative list for India, which already has 27 sites on the World Heritage List. Western Railway (WR) has been making sincere efforts for several years to preserve and showcase its heritage. The

heritage building of Bandra station was restored and work has also been done on the Churchgate administrative building, otherwise known as the General Managers office. The proposal to have the building listed in the tentative

list was forwarded by the Railway Board in New Delhi recently. WR has started preparations for getting it included in the final list. If it is included in the tentative list, it opens a door of hope for world heritage status too, said a senior official.

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news briefing
Retail Logistics

Zash not informed about Subhikshas woes

he Azim Premji-owned Zash Investments has sent a legal notice to all its current and former directors since they did not fully probe the troubled retail firm Subhikshas financials when Zash bought a stake in the company last year. The move threatens to further derail Subhikshas attempts to extricate itself from an overdose of debt and unwise investments. At the heart of the dispute is Zashs purchase of 10 percent

in Subhiksha from ICICI Venture in 2008 for Rs 230 crore. A few months after the deal, the retail firm ran out of cash and asked its banks to moderate its debt

obligations. It also closed all its 1,600 shops across the country and could not pay its salaries. Zash is now demanding answers, saying that it was misled on the true financial position of Subhiksha. It is not known if Zash will follow through and actually take the directors to court. A courtroom battle is in the offing if Zash, ICICI Venture and Subhiksha dont resolve the issues soon.

Lack of policy framework breeds illegal warehouses

bsence of laid-out rules or a framework for warehousing segment development, considered to be the first and foremost building block of the logistics value chain, has led to mushrooming of illegal warehousing on the outskirts of most cities. For example, in Mumbai metropolitan region alone there are 40 million sqft of illegal warehousing space in operation. Possibly it is the single largest location of illegal constructions in the world, said an executive of a leading project management consulting firm operating in warehousing space. According to another player in the segment, everything illegal is legal in this space. A developer develops it and sells it. Investors buy it and then use it themselves or lease it to others, and the chain continues. Warehousing clusters have developed in close proximity to demand centres such as Mumbai, Kolkata, Chennai, Gurgaon and Indore. States where land laws are extremely complicated and restrictive, as in Maharashtra, the number of illegal structures is found to be more compared to other states, where easy regulations help developers get necessary approvals fast.

Shop-in-shops gain in prominence

S
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July, 09

tandalone outlets are slowly phasing out while shop-inshops are slowly picking up. That seems to be one of the dominant themes of the organised retail sector, which is now trying to get

its act together after the super growth between 2006 and 2008. Kishore Biyanis Future Group, which owns the countrys largest retailer Pantaloon, is converting the standalone stores of book and music chain Depot into shop-inshops within Big Bazaar. While the number of Depot shop-inshops has risen to 123, that of standalone stores has come down to nine. The Future Group is in the process of converting the 30-odd independent stores of Lee Cooper into shop-in-shops. The group has also converted its home-ware brand Mela as furniture store Collection i and Fashion Station stores as Fashion within the Big

Bazaar outlets. Others such as department store chain Shoppers Stop are also doing the same. The Raheja groupowned retailer had earlier planned to open standalone outlets for its children and womens wear brand Mothercare. That plan has been changed to shop-in-shop formats only. Shoppers Stop recently pulled out of a catalogue retailing venture with UKs Home Retail group under the Hypercity-Argos brand. Dubai-based Landmark Group is also going for more shop-inshops for its brands Kappa and Bossini, though a group official says they are also looking at exclusive stores for these brands.

Project Finance

Srei aims Rs500-crore bond sale

Jaiprakash raises Rs500-crore

rei Infrastructure Finance aims to raise Rs300-500 crore in Srei Equipment Finance, its 50:50 joint venture with BNP Paribas, during this fiscal. The money, to be raised through tier II bonds, will be invested for growth of the company. At present, the JV has assets under management of Rs8,019crore. Srei has management control of the company. Meanwhile, Srei Infra will focus on three areas roads, power and ports. Its cumulative

investments in ports and special economic zones alone will be about Rs227-crore as against Rs130-crore in the last fiscal. Srei is looking at a 20 per cent increase in group disbursals to Rs7,500 crore this fiscal, of which Srei Infra proposes to disburse about Rs2,000-crore against last years Rs1,100-crore. Srei Infrastructure Finance has already begun work on one road project and another three are likely to be started in the next 6-9 months.

onstruction and cement major, Jaiprakash Associates (JAL) raised Rs 500-crore through sale of 2.5 crore treasury shares in a block deal. The funds will be used to partfund the companys three projects comprising Formula 1 race track in Greater Noida, a cement plant in Andhra Pradesh and the Yamuna Expressway between Noida and Agra. The recent merger of four subsidiary companies Jaypee Hotels, Jaypee Cement, Gujarat Anjan Cement and Jaiprakash

Enterprises with JAL had created around 21 crore treasury shares, or 14.5 per cent of the equity capital, of the combined entity. The deal happened at an average price of Rs200 per share. Of the total funds raised, JAL will use Rs 300-crore as equity infusion in subsidiary JPSK, which is building the countrys first Formula 1 track in Greater Noida. JPSK had a total equity requirement of Rs 400 crore, of which Rs 100 crore has already been invested and the balance will be infused now.

news briefing
Policy

New slum redevelopment scheme to cover 74 cities

ork has started on some of the new Governments development priorities into actionable programmes. The Prime Ministers Office (PMO), has already drawn the broad contours of an affordable housing scheme for urban slumdwellers across 74 cities having a population of half-a-million and above as per the 2001 Census. The scheme to be called Rajiv Awas Yojana on the lines of

the existing Indira Awas Yojana to meet the housing needs of the rural poor proposes Central assistance of Rs1.5-lakh for each family living in slums. The plan is to extend Rs50,000 as grant and the balance Rs1-lakh as a 20-year bank loan. Banks will be given an interest subvention of five per cent to enable them to lend at 4 per cent. The equated monthly instalment (EMI) would work out

to around Rs600 in this case, an official said. This assistance is, however, conditional upon the State Governments concerned assigning property rights to slumdwellers. It could be on the land on which they are already squatting or even tenements being built under various slum rehabilitation projects involving public-private partnerships. The sole criteria is

that the beneficiary be assigned a clear heritable title to the property, the sources noted.

Maha govt to levy cess on constructions above Rs10-lakh

Real Estate

M
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July, 09

aharashtra government aims to levy a cess on all public and private constructions in the state costing over Rs10 lakh, in order to generate Rs2,000 crore annually for rolling out schemes for construction labourers. The cess is likely to be 1per cent of total cost of construction of various projects including buildings, real estate, bridges, factories, roads and flyovers, state labour minister Nawab Malik said. The welfare measures include insurance, healthcare and education with the aim of providing security and ensuring well-being of construction labourers.

The measures have already been implemented in Punjab, Haryana and Chhattisgarh and Maharashtra will follow suit while Kerala is in the process of implementing it. The projects to be implemented with this money would be decided by the board set up for the purpose. The Board will have representation from stakeholders, Malik said adding, no construction activity would take off unless the levy was paid. A high-powered committee had been set up for this purpose, he said adding that it has recommended creating a separate Board to initiate various welfare measures for them.

Parsvnath eyes Rs300-crore income

ew Delhi-based real estate developer, Parsvnath Developers Ltd, intends to generate Rs300-crore as lease income from its commercial business over the next three years. The developer, which currently generates minuscule revenue from its leasing business, would start its Delhi Metro Rail Corporation projects in Azadpur, Akshardham and Seelampur in Delhi which include malls and commercial spaces etc. The new projects will generate Rs150-200-crore in lease revenues. Overall, Parsvnath would deliver 2.2 million square

feet of commercial space over the next three years which will generate rentals of Rs300-crore. The company recently announced plans to raise about Rs2,500crore through issuing securities and by qualified institutional placement of shares to retire its outstanding debt and invest in hospitality and special economic zone projects. The developer would cut its debt from the Rs1,600-crore to Rs600-700-crore by end of this fiscal. To increase its cash flow, Parsvnath would also sell stakes in its special economic zones and hotels to private equity investors.

Bengal FM in favour of land acquisition by industry

est Bengals finance minister Asim Dasgupta recently stated that the land acquisition for industrial projects is better handled by business leaders than the government. Very often, industrialists can handle it (land acquisition) better (than the state government), Dasgupta said, citing the example of hundreds of small and medium industrial units in the state for which farmland had been acquired by the owners on their own.

Unitech reports 28 per cent fall in net profit

If large tracts are needed, industrialists and the state government should only consider sites in the arid regions in the western parts of the state, where agricultural yield is low, and not in the fertile Gangetic plains in the south of West Bengal, added Dasgupta. His views come against the backdrop of the Lefts 20-seat loss from the eastern state in the April-May general election that dealt a severe setback to the ruling Communist Party of India (Marxist), or CPM, and its allies.

ndias No. 2 listed realty firm, Unitech Ltd, reported a 28 per cent fall in full-year profit on lower prices, but said it was seeing a pick up in demand for new residential projects. Managing Director Sanjay Chandra said, We are expecting to get bookings for 20 million square feet of new development. Unitech sold about 4,000 houses in the last two and the half months.

The firm reported a consolidated net profit of Rs11.98-billion ($247 million) for its financial year ended March, compared with Rs16.62-billion in the previous year. Total income fell 22.5 percent to Rs33.15billion from Rs42.80-billion in the previous year. Fourth-quarter profit was, however, higher than 1.36 billion reported for the preceding three months ended December.

Investors in property stocks face a double whammy

Metro

n the one hand, most of the real estate companies that have declared results so far have chosen not to pay any dividends for 2008-09 and on the other hand, prices of these stocks have eroded up to 70 per cent from their 2008 peaks. Some of these realtors include big names like Indiabulls Real Estate (IBREL), Housing Development and Infrastructure (HDIL) and Parsvnath Developers. These realty firms are blaming their decision to skip dividends this time on declining cash flows. Even DLF, Puravankara

Projects and Orbit Corporation, which have declared their unaudited results, have not yet announced dates for their annual general body meetings

(AGMs) or board meetings. Even in cases where developers have declared dividends, they have cut the rate sharply. Bangalore-based Sobha Developers has declared a 10 per cent dividend (Rs1 per share) for FY09 as against 65 per cent (Rs6.50 per share) it paid in FY08.Unitech, which posted a 29 per cent fall in its net profit for FY09, has declared a 5 per cent (Rs0.10 on Rs2 paid-up shares) dividend for its shareholders. The company had paid 12.5 per cent (Rs0.25 per share) dividend in FY08.

Work on tallest building in Mumbai to kick off in Oct

ork on the Rs 4,000-crore, 531-mt tall iconic tower to come up at Wadala is expected to start in October. It will be the worlds seventh tallest structure with a built-up area of 60,000 lakh sq ft, the largest among such buildings in the world.

Redevelopment

Dharavi redevelopment on fast rack; fate of locals rehab undecided

he state government is fasttracking the Rs15,000-crore redevelopment of Mumbais 535-acre sprawl of Dharavis slums. Financial bids for the Dharavi redevelopment Project (DRP) will be opened by July 20. The vertical development of the slum is likely to face hurdles from slum dwellers residing on the upper floor of the shanties. The cost of the project, which

got delayed by over 10 years due to several factors, escalated to Rs15,000-crore. The project was initially estimated at Rs 9,350-crore. Despite the delay, the state government wants to go ahead with the Dharavi makeover plan before the election code of conduct comes into force for the assembly polls. With hardly any time left for the bids to open, the government

is still undecided on the fate of tenants staying on the upper floors of slums. According to SRA rules, only ground floor structures are eligible for rehabilitation. This indicates that nearly 25,000 families on mezzanine floors in these slums, spread across 590 acres are unlikely to be rehabilitated by either the state or the project developer.

International

US borrowers to be beneficiaries of plain vanilla home loans

free as signing up for a retirement savings plan: A growing number of companies now automatically enroll new employees in 401(k) plans unless they opt out. For mortgage brokers, though, the plan threatens to shrink the fee income some have received from encouraging the use of adjustable-rate, interest-only and other sometimes risky loans. Its the administrations latest step to tackle the aftermath of the housing bust. The administration in March launched a $50 billion plan to give the lending industry financial incentives to modify mortgages to lower payments.

onsumers who take out mortgages may get a plain vanilla loan such as a traditional 30-year fixed-rate mortgage unless they opted for a riskier variety, as per President Obamas new plan. Obamas plan to revamp financial regulation aims to protect borrowers from the confusing and high-risk mortgages that fed a pandemic of delinquencies and foreclosures, led to the worst financial crisis in decades and thrust the nation into a deep recession. Government officials want to make the process of getting a mortgage as simple and abuse-

aSalle Investment has $3-billion available for investing in Asian real estate and is ready to re-enter the market after nine months on the sidelines, focusing initially on Japan and Australia. The process of debt restructuring and market resetting and capital and economic stabilization seems to be happening fast in those countries, said Ian Mackie, Chief Investment Officer for Asia Pacific. But the firm will probably give Indian real estate a miss as it feels the potential returns do not compensate for the risks. We have seen an attractive investment in India. The risks are higher here, he said.

LaSalle to invest $3bn in Asia

The Mumbai Metropolitan Region Development Authority (MMRDA) commissioner, Ratnakar Gaikwad, said permissions should be ready shortly for the project. The building will generate Rs2,000 - crore in revenue through rent, which will go towards other development projects in the region, said Gaikwad. The pre-qualification bids will be followed by technical and financial bids. It will take four to five years to be completed on a Design, Build, Own, Operate and Transfer basis. Wadala would become a well-connected point with the new tower and infrastructure. The area would be connected to other parts of the city by the monorail and Metro rail lines; the trans-harbour project would link Wadala with Navi Mumbai. About 30 floors of the building will have seven-star hotels and luxury apartments. For the first 60 floors, there will be high-speed elevators while the rest of the building will have normal elevators. The building would be centrally air-conditioned, have electronic circuits, elevated transport and security, and the tenants would be allowed to change the decoration according to their needs.

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July, 09

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Intelligence for the Indian Real Estate Professional

readers and counting

Due to the fantastic demand from real estate professionals like you, we are delighted to announce that Property World is increasing its print run from the next issue.

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innovation

Virtual office alleviates pain of high costs

By Our Correspondent

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July, 09

n the days of economic recession, where the rental costs and employee salaries add to the overheads of a company, corporates are innovating ways to cut costs. Executives across business sectors, geographic locations, and from every size organization, seek to effectively manage business risk, maximize their financial resources, and increase their flexibility to accommodate growth and the dynamic changes in the market. With property constituting more than 40 per cent of the total assets of many of the worlds leading corporations, these businesses are increasingly looking at office space requirements as a strategic component of their business plan. Regus enables companies to maintain that needed flexibility by helping them minimize their second largest cost of doing business: the expenses associated with leasing, equipping and staffing their office space. Property World recently caught up with Madhu Sudan Thakur,

Country General Manager, Regus India. We are a one-stop shop for entrepreneurs who want to start afresh. They get all their needs fulfilled right from getting their visiting cards. When we started off, most of our clients were corporates and multinationals. The situation has reversed in the last 6-9 months. There has been a wide shift in the outlook in India and globally. Nearly 65 per cent of our clients are entrepreneurs. Due to recession, number of companies have started laying off people. This has led to the mushrooming of entrepreneurs, who do not have the necessary funds and cannot invest heavily into infrastructure. Such clients find us a perfect solution for their problems, said Mr Thakur. The US-headquartered company has launched several products including Virtual office, which offers prestigious local business address and professional telephone, fax and mail handling service; Netspace, Private, secured, and customizable office space in a

Regus-operated facility, ideal for customers with 20 or more workstations and Executive Club, a membership program that provides mobile professionals access to Regus Groups business lounges worldwide. Several OEMs, who have set up shop abroad, are consumers of the product, virtual office. It has all the facilities of an office and you do not need to physically sit in it. The client may actually demand something in Lisbon, Madrid or any other place. They route their products through us and it would actually be easier for them to work. They can get their telephones answered, mails picked up, email dropped in and check their voice mails, explained Thakur. Workplace outsourcing enables companies to rapidly seize new market opportunities because the office infrastructure is already in place, which is particularly beneficial when businesses are setting up offices in emerging markets. Each location includes a client-driven

innovation
mix of offices, meeting rooms and common areas. An advanced communications system, Internet access and IT and administrative support are also standard features. Additionally, clients can utilize Regus full menu of business services, including meeting rooms, videoconferencing, business support services, and catering on a pay-per-use basis. The prices offered differ depending on the solution. The price may vary from Rs400 per user per hour to Rs18,000 to Rs19,000 monthly for full time users. We have number of products for the entrepreneurs such as the Business World which is priced at Rs950 per day for a single workstation. Through this one can use the office space, be Wi-Fi enabled and of course enjoy the benefits of the office space. With slightly higher priced cards, one can enjoy the same benefits regionally. With increase in premiums, they can enjoy the same benefits Madhu Sudan Thakur Country General Manager Regus India nationally and internationally, said Thakur. The company boasts of a large clientele right from the IT sector to manufacturing, finance, auto mobile manufacturing. Elaborating on the client, Thakur added, a number of clients belong to the services sector such as consultancy, legal, HR and accounting services. Though we have a wide variety of clients, it is the IT and ITeS sector which forms a major bulk of the client. It is generally the SMEs the companies which do not have the resources to invest in a strong infrastructure while at the same time require to be in sync with the modern technology prefer to use this system. These SMEs do not require much of printing or other tertiary services and do not require much of office space. They need the net connectivity and telecommunications to be in place. Speaking about the clients, he said, Most of our clients are US- or UK-based clients. They are clients abroad. It is through their common relationship manager, who happens to be our main contact point, that we bag all the deals around. It is in this manner, companies like Infosys, Wipro and Tata Consultancy Services form our clientele. Most of the clients, approximately 80 per cent, outgrow their present status. The rise may be up to 25 per cent. In such cases, they prefer to have their own offices. We had a client who had around 35 marketing staff who needed to come to the office for one hour once in the morning and evening, while the remaining 3 are in office, In such cases, we provide the travelling staff blackberry phones to stay connected. Wherever required they can use Regus offices located at Churchgate, Bandra Kurla Complex, Santacruz and Andheri, he added. Speaking on the requirements of the clients, Thakur said, We have entrepreneurs, large corporate and tertiary financial companies who would like a office space, yet would not like to be hassled by issues like air-conditioner maintenance , paying electricity bills, and so on. They are merely interested in having ambient office environment and sufficient car parking. Though we are placed in the commercial segment, yet we are priced lower than a permanent office. The cost is actually 60 per cent less than the actual office. It is because that one does not have to account for the depreciation costs, mortgage, deposit and recruitment of staff for administration, IT and other services. Hence the clients actually land up paying 60 per cent of the actual office costs. So if a person anticipates growth and takes up a 3000-square foot office, then he would end up paying costs for a growth which will happen after a year or more. However, it would be much economical to hire the exact number of work stations. The client is charged as per usage. Sometimes the usage is full time. The company also keeps a tab on the credentials of the clients and ensures to keep the security fool-proof in order to avoid fraudulent deals. Thakur added, We actually operate in countries like Pakistan, Lebanon, Somalia, etc. We always counter check our clients. We maintain an intensive database, crosscheck the persons profile on Linkedin, Face book and all other networking sites and also take important documents for verification such as passport copies, pan card copies, etc. Thakur feels acceptability of this unconventional solution is one of the challenges that the company encounters. It is the acceptability to our new concept from sectors like government and others. In UK, our largest client is the British government. The situation is contrary in India- where buying is considered a better option. However in reality, it consumes more time and energy, he said. Regus operates over 950 business centers across 400 cities in 90 countries. It provides services in Bangalore, Chennai, Gurgaon, Hyderabad, Kolkata, Mumbai, Nagpur, New Delhi and Pune. The company is growing 400 per cent year-on-year for the last four years. (Edited by Bhaswati Das)

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July, 09

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Perspective

regulator can make the change

Kapil Wadhawan is Vice-Chairman and Managing Director, Dewan Housing Finance Corporation Limited [DHFL], a company focused on home finance to the low and mid-income segment, particularly in rural and semi urban India. The company has an asset base of over $800 million and registered a 39.90 per cent growth in net profit at Rs91.76-crore for the financial year 2008-09 as compared to the previous years Rs66.59crore. Kapil Wadhawan spoke to Padma Ramakrishnan on various aspects of real estate and housing finance. Excerpts:
What do you think is needed to revive the property market? There are measures being taken by the government and the industry. The mandate given to the Congress government has instilled confidence in the real estate market and business will increase for realty companies as there will be a fair amount of economic activity in the next couple of years. The Qualified Institutional Placements [QIP] by realty companies will go towards reducing their debt burden. However, the commercial market, which is dependent on the services sector will continue to see signs of stress with exports, IT and hospitality having been adversely impacted

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July, 09

due to the global crisis. Overall, there are signs of revival being seen. How will the home loan market perform in the days to come? Housing would be a positive draw. The mid-income segment up to Rs20-lakh has sustained demand. The difficulty is in tracking unit sales city by city. The down payment component that buyers are expected to raise is quite high. What is the way out of this situation. Do you think lending institutions can differentiate between the buyer and investor and peg interest rates differently? One needs to go by the sale agreement value. The Bank or HFC would fund 75 to 80 per cent. Over the last one and a half years, there has not been too much of investor interest in the residential segment. Certain products where speculative interest was taking place, have now come to a naught. Differential interest rates would work but more important is the presence of a strong regulator for the real estate sector which would ensure escrow accounts for advances taken from buyers. Projects get stuck mainly because of money collected for one purpose but used elsewhere. A bull market always sees large number of people with no background come into the realty sector. In the coming year, strong players will come on the surface. Strong developers with good track record is not adequate; we need to continue to work with resources. Margins of 80 to 100 per cent for developers are no longer sustainable, they would have to come down to 30 to 40 per cent. What are the changes developers need to bring in to make it a more organized market. A regulator for the real estate market Your comments On the interest rates, the government has its own constraints. The RBI has reduced rates, but depends on how and when banks will bring down the rates. Despite housing being a state subject, the centre will have to play a key role and start to bring down barriers in housing. Differential stamp duty rates, effective utilization of funds streamlined through escrow accounts are some of the issues. The real estate sector continues to be fragmented with listed players and developers operating in the private domain. Even with listed players everything is not transparent. Enforceability and strict penalties would send the right signals to players. Cash flows need to be regulated and administrative hurdles removed. Despite Urban Land Ceiling Act being banned in Maharashtra, we still need to procure no objections under ULC for certain projects. In certain cities FSI needs to go up, specially in Mumbai. I dont believe in a policy which doles out anything for free like the Slum Rehabilitation schemes, which only lead to a

Kapil Wadhawan Vice-Chairman & Managing Director Dewan Housing Finance Corp.

more complex web of dos and donts. Improving overall infrastructure would help. There are borrowers complaining of unfair practices in terms of not getting the benefit of lowered interest rates, prepayment penalties among other issues Prepayment penalties are common. There are issues in terms of fixed rates not being really fixed in case of some institutions. Floating rates are a function of costing. Earlier we were primarily a fixed home loan market and only moved to floating interest rates in the last six or seven years. The benefits of lowered interest rates should be passed on to all customers. The future of redevelopment projects, specially in Mumbai Redevelopment projects have their own lead time which needs to come down, The government needs to throw in some incentives for developers to come into such projects. There are a lot of uncertainties and variants which means project dont come on stream. Even a single member objecting can stall the process. Residents for their part need to view the risks of living in a dilapidated building. Getting the right developer on board is important and it has to be a careful exercise. What do you think of the projects that have been launched in the garb of affordable housing? What are the time lines for the completion of such projects and how safe is it for buyers to invest in such projects? Having the right regulation and ensuring that once these projects are announced, 10 per cent booking money goes into an escrow account is important. If it can be done in a small place like Dubai, where they have been quick to plan on the back of large projects announced, there is no reason why it can

not happen here. The onus of responsibility lies with the developer in terms of not overleveraging himself and having the requisite approvals in place. The focus should be on helping developers tide over difficult times and safeguarding buyer interests. The buyer for his part needs to check the credentials of the developer. The market reality is such that not all projects will be executed. States which are more proactive, putting in reforms like fast track approvals will become more efficient. The registration process has become more transparent, but the pace of activity in many other areas needs to improve. The need of the hour is for developers to offload their existing stock at reasonable prices. How and when do you see this happening? The new mandate given will change things. There was an absolute lull in activity. Now with sales starting to happen, developers need to improve cash flows. Cash flows based at the cost price is better than no cash flow. Your company is into real estate development and home finance. What would be your focus areas? We are strong in home finance and are projecting a 50 per cent growth in home loan disbursements by mid 2010. The real estate development is carried out under the brand name Dhiraj. Besides this we have the businesses of food and beverage retail, food and grocery retail, hospitality, hotels and resorts, education and financial services. In the food and grocery retail, we operate close to 200 outlets. The retail industry is still evolving and is tied up in with the aspirations of the retail consumer. Economic cycles are very severe and sudden but with business activity improving and confidence levels going up, things will improve.

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cover story

Bangalored!
By Anil Parameswaran Nair

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June, July, 09 09

angalore is a city that never sleeps, if one goes by the BPO culture and lifestyle of young professionals and their drinking binge in the dead of night. But the city is giving sleepless nights to everyone from US President Barrack Obama to chief ministers of various Indian states who have tried to replicate its successful IT development model. The flurry of activity seen in the real estate and construction industry in the last few weeks, mostly by way of changing strategies of circumventing the biting recession in the developed world, has added even more grist to the envious position of Bangalore. A recent research report produced by Zinnov Management Consulting revealed a startling fact: out of the 780 multi-national R&D centres currently active in India, almost 50 per cent are based out of Bangalore. Fortune 500 companies including Boeing, Rolls Royce, Honeywell and other international aviation giants like BAE Systems, EADS, Pratt & Whitney, Spirit Aerosystems, all have connections to Bangalore. One CREDAI member who is actively involved in promoting the city and lobbying with governments for favourable policy decisions for Bangalore joked that more than the West, other Indian states are in blue funk. The growth of the city in the last two decades has tilted the scale in its favour mostly at the cost of other traditionally highly-preferred destinations for investments. When our editorial team fanned out in the city to meet various property players, developers and even fringe industry related to real estate, every meeting turned out to be an eye-opener. Many market observers find it surprising that in spite of the recession in most parts of the world the Bangalore airport is in great shape, bustling with passengers all through the day. Many property developers who were leveraged have gone down under or sold their projects to bigger players. Big real estate players in the city have consolidated

Kishore Jain Managing Director Jain Heights For any NRI who wants to own a house in south India, Bangalore offers the best value for money. The brand value of the city might have come down because of the infrastructure issues like road traffic. Even the crime rate in Bangalore is less than those of many of its peers.

Mohammed Ali Vakil Director Vakil Housing Development Corporation The biggest draw for this city is the environment, and that is not related to good weather alone. Bangalore is peaceful, quiet and safe. When you come from Mumbai or Delhi and stay in Bangalore, you will find heaven here.

their operations in the last one year since the downturn pulled the sector into a quagmire of falling investor interest, undecided home buyers waiting in the wings and default in payments across the industry. The situation is changing, A HNI based out of Marathahalli pointed out that by the time the ink has dried on this page, the situation would have changed even further. On a pointed question regarding what kind of strategies have the developers devised to counter such a downturn the next time, the most important lesson seems to be to spread the risk. The SEZs, to give the best example, coming up in and around Bangalore have an extremely diversified portfolio. The SEZs are on biotechnology, health sciences, research and development, textiles and aerospace. Most of the SEZs which came up in Bangalore in the past have been in IT and ITeS sector along the Outer Ring Road corridor. Bangalore has pioneered the green building movement in India. The government is planning to give tax exemption to green buildings which could give a fillip to the green movement. It is still not very clear if the green buildings in Bangalore are demand-driven. Infrastructure development, especially the Namma Metro project which had got mired in bureaucratic wrangles during the last regime, has now become active again after the new BJP government came to power last year. On the policy front, measures are being taken by the state government to improve the infrastructure of the city. The increased pace of construction of the Metro project and the elevated road to the Electronic City and NICE Corridor have come as an added thrust to the new industrial policy 2009-14 where employment-linked incentives for micro, small

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July, 09

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cover story
Vishwa Prathap Desu Senior General Manager, Brigade Group Bangalore has two major advantages, good government support as well as good manpower supply. Also, we dont see much conversion of IT parks to regular office space as most software companies are confident of the STPI benefits being extended.

Ramakrishna Hegde Managing Director Chartered Housing The concern over loss of jobs in IT sector is a little misplaced. In Bangalore the average attrition rate historically has been 11 per cent. Even today it is 11 per cent. There is no need to panic for the real estate sector in these conditions, and the tide is anyway turning.

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Raj Menon Country Head Interface FLOR In the north corporates prefer bright colours, while in places like Chennai muted colours are chosen. But in Bangalore you will find market for all kinds of colours, simply because this city is a melting pot.

and medium industries, stamp duty exemption up to 100 per cent and farmer-friendly land acquisition rules have all been put in place. In all this, property developers, township builders and infrastructure companies will benefit the most. That is also the reason for that hardly concealed mirth among industry leaders. From the governments point of view, the idea to enhance the contribution of the manufacturing sector to the states GDP from approximately 15 per cent to 20 per cent in the next five years, comes as ambitious as it is plausible. Also, on the other hand, as a strategy, city developers had put on hold all development of office space with a potential of adding 4-million sft. That is also changing soon. What are the greatest advantages of having office operations or residing in the city. Foremost is the community living. People in Bangalore have no time even for their personal pursuits, and most professionals here would wish there were 48 hours in a day, says Harish Marwa, a 24-year old cashier at a private bank. The real estate development in Bangalore over a period of time has brought good tidings to industry climate as a whole, not just in generating employment but also by providing economical and high quality residential space for the large floating population. Walk to work is a concept which has come from the First World. In most other Indian cities the distance that people have to travel for work is unbelievable. Here in Bangalore the developers of most of the IT parks and SEZs have accommodated residential space in their plan along with the adjacent office buildings, added Mr Marwa.

First Person

Market is picking up steadily

Bangalores fast changing real estate scene has been analysed by market experts in respect of office space and IT parks. When we asked Satish B N, Director, DTZ about the latest trends in the city he spoke of the lessons that the real estate sector has learnt from the downturn.
oth the government and the developer community are currently witnessing a push from local and global occupiers to formulate certain policies that benefit their tenancy over the years. Many occupiers are leveraging the high vacancy rates in the current stock to achieve better commercial terms as most developers would rather prefer to retain than replace their tenants. The market also has started witnessing a steady demand for fully furnished (second generation) office space, which has been in the range of 3,000 to 12,000 sq.ft as against bare shell space resulting in a substantial saving on the fit-out capex. Adding to the above, the availability of such space has been more towards the M G Road location at some very competitive rentals. However, the construction of Bangalore Metro Rail project has resulted in a major congestion/traffic jams in and around M G Road and is one of the key factors for companies with such space requirements avoiding these locations and will continue to do so for some time, since the completion of the Metro rail work is scheduled to be complete in the next 2 to 3 years. The major portion of the stock (both office and IT parks) that is being added are more from a sublease perspective, which are from the companies looking at reducing their operating expenses and who have
Sachin Wadwadgi Asst System Engineer, TCS The most important attraction for young professionals to come to Bangalore is the walk to work infrastructure around most IT parks. It only means more time to go to gym and have a social life.

been in lock-in period (ie: No option to exit/ terminate as per the contract signed). Firms who have gone ahead with larger commitment of space and who did not grow the way they had anticipated are the ones who have been more active in such sublease offers. The difficulty is for the companies who do not have the right to sublease the space to third party as per the contract signed, but end up continuing with the lease and terminate once the lock-in expires. Observation: l No new large speculative commercial development planned. l Renegotiations of existing lease terms by tenants in order to achieve/reduce the operating cost. l Larger occupiers prefer to consolidate within their facility or business park. l Sublease offers by the existing tenants are compelling developers to compete with availability in their own developments and be more flexible on pricing. l A stream of purchase requirements by Individual investors are mainly trying to target distressed properties l IT Park vacancy is much lesser compared to independent buildings as most large occupiers/clients believe that there are value additions in terms of elbow space for expansion,

amenities, management etc in a IT Park. l The perception of the market witnessing no activity in terms of office space is not true; however the quantum of large significant take up is much lower compared to the last 2 years Lessons: l IT parks have to be planned/designed as integrated facilities that cater to market entrants, mid-sized occupiers, larger tenants, multiple tenants rather than large floor plates that cannot be modified once vacated or when in need. l Consultants and Developers should continue to work with clients with regard to product innovation, customized options that are in sync with the clients capabilities, which could reduce the end users operating cost significantly. l Single occupier in a large property can prove risky for the lessor if vacated in a bad market. l There was too much emphasis on unplanned headcount expansion not planned in tandem with the real estate portfolio planning. This is now left with a large gap between actual operational cost and projected cost.

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Real estate market analysts have predicted that the office rentals will firm up between second half of 2009 and first half of 2010 in National Capital Region (NCR) and Mumbai, but Bangalore will, in all probability, be the dark horse. The oversupply expectations in Bangalore have been tempered mostly by the fact that developers, in their collective wisdom, have tried to align supply with demand growth in the past quarter. From all the inputs we received from Bangalore property market, the significant point is that industry observers are not wont to put riders when making claims of a come back in both residential as well as office space, except that office will take about two quarters more than residential to make it to the mark. And therein lies the tale.

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sustainability
f there is a way to completely do away with air-conditioning in a commercial or residential building, it is by going green. And going green does not infer planting saplings alone or reducing your carbon footprint. When the Confederation of Real Estate Developers Associations of India (CREDAI) floated the idea of green wall amongst its members in Bangalore (appropriately emphasized in its initiative Go Green) it was unusually well-received. CREDAI, according to Raj Menda, Managing Director of RMZ Corp, took lessons from the Singaporean model of going green with green walls. We got a lot of enquiries from real estate developers from across the city on this concept floated by CREDAI. Bangalore has always been known for its greenery and healthy lifestyle. We want to bring back that same ethos even for our future generation. We wanted to adopt the idea also because the air-conditioning in

any commercial or residential building can be completely done away with, he said. The green wall can actually ensure that the plot in which the building stands can become 125 per cent green. If the green wall is set up on the east, west or south side of the plot where the sun hits the most, the planters put up at every stage which can be accessed through balconies and fire staircases maintained with green walls reduce heat radiation. The requirement of air-conditioning can be reduced to a large extent, actual users testify. A green wall, by definition, is most often part of a building not independent of it, and is partially or completely covered with vegetation. The green wall is supported by soil or an inorganic growing medium. Green walls are also referred to as living walls, bio-walls or vertical gardens, in various countries. Buildings, in countries which have adopted this technique, have been categorized to

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You can do away with air conditioning

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sustainability
ENERGY CONSERVATION IN RECESSION
By Amit Barve
ven as recession is having a biting effect on industry, there is a felt need to realign our strategies to bring down costs of operations. The fact that energy is a finite resource has dawned on market players. The last boom time flaring up of crude prices brought out the vulnerability of the commodities markets. There is this popular adage used in government advertisements which states quite succinctly that every unit of energy saved is that much generated. Also, energy saved in cities for a few hours can light up villages around for days. Energy can be conserved in day-to-day life in many ways by making small and simple changes in the way energy is consumed. Here are a few tips on energy saving without much compromising to your regular lifestyle.

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Lighting systems l The elementary way of conserving energy is through light switches. Turn off the lights when not required. l Maximise use of automatic devices which help in saving energy used in lighting systems like infrared sensors, motion sensors, automatic times, dimmers or solar cells, wherever applicable to switch off lighting when not required. l Use appropriate light fittings such that it is as close to the place which requires lighting e.g. a reading lamp focuses light on desk and hence best option, than illuminating entire room which might require higher wattage of lighting. l Clean light bulbs and tubes for dust accumulation. Since dirty lamps can absorb up to 50 per cent of the light. l Replace your inefficient incandescent lamp with Compact Fluorescent Lamps (CFLs) which uses up to 75 per cent less energy than conventional light bulbs. l Unplug all the electrical devices when not in use since it keeps drawing residual current. l Make futuristic investment in solar lighting systems which do not have recurring cost of energy consumption.
l

Heating and cooling systems Use ceiling fan or table fan rather than air conditioner wherever possible since it costs you close to 30 paisa an hour to

operate against Rs10 for air conditioner. Set the temperature of air conditioner to 25 degree Celsius rather than 22 degree Celsius. 3-5 per cent of energy is consumed to reduce the temperature by one degree. l Use the timer facility of air conditioner and leave the unit off for some time since a good air conditioner shall require only half an hour to dehumidify and cool the room. l Clean the filter of air conditioner regularly to reduce consumption of energy. l If the air conditioner is old then cost of replacing the unit might work out cheaper than repairing and maintaining the old unit. l While buying new electrical equipments, prefer to buy highest star rated energy saving device. l Reduce temperature setting of water heater from 60 degree Celsius to 50 degree Celsius; you can save 15-20 per cent of energy required to heat the water at high temperature. l Insulate the pipes of water heaters to minimize the loss of heat especially when the pipe is running through unheated areas. l As a long term solution and future investment use solar water heating system rather than conventional water heaters.
l l

location which is away from sources of heat, including direct sunlight, radiators, appliances such as oven and cooking range l Refrigerator motors and compressors generate heat, hence allow enough space for continuous airflow in and around refrigerator to make it more efficient. l Do not stack the refrigerator full; keep some free area inside for air circulation. l Allow hot and warm food to cool down before putting them in refrigerator, also cover the food items. l Use microwave oven which consumes close to 50 per cent less energy as compared to regular oven especially if the quantity of food is less. Computers Turn off office equipments when not in use. If your computer must be left on then at least switch off the monitor since it consumes almost half of the energy required by system. l Set computers, monitors, copiers in sleep mode when not in use which can help cutting your energy consumption by almost 40 per cent. l Battery chargers such as for those equipments like laptop, cell phone and digital cameras draw power whenever they are plugged in; also they are quite inefficient devices hence pull off the plug when not in use and save energy.
l

Cooking systems Refrigerators should be placed at a

Green buildings in India are not demand-driven

he conventional notion in India is that green buildings and LEED ratings are demand-driven and that the occupiers root for such structures. According to Mr Menda, the real estate developers who are so clued-in to various new developments and innovations happening in the developed world, take initiative to build green buildings and seek LEED ratings. I dont find customers insisting on

occupying green buildings. Most of my customers are MNCs, many of them Fortune 500 companies but they have not been seeking to occupy a green building, or even shown preference for it, says Mr Raj Menda, Managing Director of RMZ Corp. Mr Menda told Property World that he makes special efforts to know from his sales team if any new occupier ever stated that they would prefer to take space in a green building, even though RMZ does not charge a premium for that. Many of the occupiers in IT parks and office space have spent millions in CSR activities, extolling their cause for green initiatives. The occupiers dont have to pay more for seeking a green building, yet they dont make a preference for a LEED rated building. There is a disconnect between their stated ethos and their actual behaviour. Unless the industry leaders dont take a lead in these matters, such initiatives taken by the developers will be difficult to sustain. I often need the feedback from the current occupiers to check if I have to go from Gold LEED rating to Platinum rating, added Mr Menda. The occupiers of green buildings dont even make a passing reference to the green cause. The developer only ends up getting brownie points for LEED rating. It is fashionable to talk about

all the green initiatives in a seminar or at the dining table, or even release ads in the media. The developer community, represented by CREDAI, has also sought the governments intervention in reducing taxes on all green products so that it becomes not just viable for developers to use them but also get a premium over regular products.

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July, 09

two kinds -- green facades and living walls. Climbing plants which are grown directly on a wall or on support structures where the plant shoot system grows up on the side of the building while the roots are in the ground make up for the first type. In a living wall, the modular panels are made up of polypropylene plastic containers, geo-textiles, irrigation systems, a growing medium and vegetation, etc to provide both physical support as well as nutrition. According to a Bangalore-based expert on green walls, the concepts have been changing fast and several new innovations have been added. The living walls can be further categorised into passive and active systems. In the active living wall concept, the living wall is integrated with the air circulation system of the building. Active living walls are entirely based on bio-filtration and phyto-remediation. A study done at the University of Waterloo states that living walls with bio-filters increase the capacity of air-filtration. CREDAI has made the going green initiative much easier for the developer community to understand, as it involves two aspects. One is about planting a tree for

every 100 sq feet of office and 250 sq feet of residential space. This essentially translates into one tree for everyone. In a 1,000 sq feet area there are about four people living, and that is how it gets converted to one tree for a person, Mr Menda explained. In most cases, planting trees may not prove good enough for providing green cover as saplings have to be nurtured with lot of care. Developers in Bangalore have agreed to provide security and protection, even while watering the saplings everyday. The developer community, which promoted the two ideas lately in the city, avers that the two initiatives can bring down the pollution levels in Bangalore. In the past, Bangalore real estate developers have been blamed for everything from dumping concrete slabs in water bodies to contributing to dangerous levels of suspended particulate matter at construction sites. The green wall concept also endears itself to various artistic needs of architecture and interior design elements. The green wall promoted by developers can give an edge in contemporary landscape design, according to an architect in Bangalore, who

explained the economics behind the move. Even as properties with green tag in office space demand a higher status, if not a premium, the green wall concept is being sold to occupiers and foreign companies with a conscience. It is the innovative approach for solving spatial challenges often posed by the commercial space sector that has made green walls popular with architects. The immediate benefit, as Mr Menda explained, of green wall is that it creates square meterage of greenspace while using minimal floor space. The module units of green wall can be vertically stacked to any height. Also, their inbuilt reticulation system ensures maximum resource efficiency in any water sensitive climate like in India. But in technical terms, in addition to providing an instant, textural, green solution to architectural facades, green wall can ensure thermal insulation, improved air quality, reduced noise and increased acoustics. Such walls also add instant aesthetic value to interior and exterior spaces. (The author is General Manager, -- Solar, SCHOTT Glass India Pvt. Ltd)

www.pwindia.in

in depth

Mid-income housing

Reflecting the pulse of the market

Bangalore based CSC Group has launched its smart homes projects in three locations in the city, hoping to make home buying within the reach of one and all. Managing director PC Sukanand, explains his projects, which look like a case study in budget housing

A
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July, 09

seasoned real estate player, Sukanand has witnessed several real estate cycles but this time around, the downward cycle and the recession happened together creating more chaos. Sukanand is one of the few developers who have managed to hold their neck above the water, thanks to his customer-focused approach. Our USP, he says, has been to give more carpet area to the end user

rather than burden him with extra common amenities. Developers need to give a lot of thought into what goes into making homes and apartments. He says all Fortune 500 companies evolved during periods of recession and developers need to take lessons from this. A few years ago, developers were driving the market and buyers were the pillion riders, today it is the other way round.

A buyer knows what he wants. Giving his perspective on what went wrong, he says most developers overstretched themselves on the back of private equity funding and other investor funding in a boom market. All that has now turned topsy turvy due to the lack of demand and projects have come to a standstill. The genesis of the problem is diverting funds meant for project A into project C. The end result is both the projects suffer and the developer is in deep trouble. There are

31
practically no projects that have completed on schedule, he states. Wrong investments and wrong vision are at the root of all this. There is talk of a 30 per cent crash in prices but in reality there is no crash. We see projects launched at Rs3,000, being relaunched at Rs1,800. What then are the profit margins? You cannot be avaricious; you need to look at a cut in profit margins, he says. Also, most of the real estate development in Bangalore has been revolving around the IT space. The big names in realty should have got into different areas of operations. Everybody rushed into IT Software parks and SEZs when they should have ideally got into a variety of areas like residential, SEZs, commercial software parks. The herd mentality is now prevalent in case of budget homes. According to Mr Sukanand, seeing the lull in the market, launching smart homes has vindicated his decision. Now everybody is launching budget homes. But the definition of affordable homes is not clear. We have two parallel brands a luxury project, LXY at Koramangala and CSE, a smart home concept. The luxury homes are being sold at Rs1.5-crore with a swimming pool in each apartment. The luxury in luxury projects should be such that you forget everything once you get into the house. Luxury and common housing thus can not be the same, irrespective of what some developers may say. In the smart homes, the focus has been to cut down on the frills and provide more carpet area. These have been launched in three locations in Bangalore at Attibele near the Electronics City, Devanahalli and Sarjapur Road. All the projects will have apartments in the studio, single-bedroom, two-bedroom and three-bedroom categories. The target customers include senior citizens, exservicemen, young couples, first-time buyers, government employees and all those who would want to move from rentals to EMIs without any difficulty. We have done a lot of research and given to the customer what he wants. The total area of a unit in case of a single BHK is 290 sq ft and in case of a 2-BHK it is 600 sq ft. The costs range from Rs4-lakh to Rs19-lakh for a 3-BHK. If you look at the loading done across various projects in the market, these are very high between 25 to 28 per cent. We are giving good loading and providing bedrooms of 11/12 or 10/10 size for the customer whether it is 500 or 1,000 sq ft area. How much space you are utilizing inside is the critical part. The project is expected to be completed in 18 months time. On the question of utility and maintenance of amenities in projects, the general norm in Bangalore is for developers to maintain them for two years and later hand it over to the society, with an option of working together to maintain them. These are not prickly issues in Bangalore as much as they are in places like Mumbai. The abundance of land in Bangalore works to its advantage as there are about 30-40 acres in the holding capacity of each company. With developers having that kind of land, one can imagine the kind of development that will take place. Developers are also quite happy with the FSI given (of 2.5 to 3) as here there is more of horizontal development than vertical, as opposed to Mumbai where land costs are very high. The future will see townships and walk to work culture working well in the Bangalore milieu, according to Mr Sukanand. Bangalore as an investment destination has a great future. It is a safe city to invest in and returns on investments have always been on the rise. The USP of Bangalore is its climate, friendly population and infrastructure. The international airport, the metro in progress all together means Bangalore will be the most happening place, according to Mr Sukanand. (Edited by Padma Ramakrishnan)

July, 09

www.pwindia.in

in depth
counterpoint

Property developers have promises to keep

By Joseph Sudhakar
here are a number of issues that come to light after the end-user has bought a residential flat, which developers feel are entirely avoidable. It is best, according to market analysts, to make a checklist of issues that can be best dealt with at the beginning of the deal making, rather than wait for things to turn bad. The matters which a flat buyer should keep in mind, considering todays market condition in India, before finalizing his dream house, are as under: 1) First and foremost, a flat buyer should try to buy a ready flat from a builder i.e. a flat which is 100 per cent complete and ready to use. Considering the present market situation, lot of builders might have ready stocks of unsold flat, wherein the flat buyer can actually see his flat physically and can feel his home. Further, the buyer enjoys a unique advantage of knowing some fine details regarding the flats, which otherwise is very difficult to find in advance, such as any seepage problem, the quality of construction, quality of lifts provided, maintenance of the building, internal/common amenities provided, etc and checking the same directly, by meeting few people who are already staying in the complex. However, a buyer may need to pay little more as compared to an under construction flat but its worth it, as you need not worry about your dream house getting delayed/completed, etc. 2) A flat which is 100 per cent complete may be an ideal situation, however ideal situations are rare. So, one should also look for projects which are 75 per cent or more complete, as this enables a flat buyer to understand his dream house better and he may get to shift to his house within 6 month. However a detailed analysis of certain issues should be done so that your expectation on your house remains intact and does not alter. One needs to check

Develoers have to make sure that promised services are provided in all housing projects

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July, 09

future plans of the builder, on the adjoining/opposite vacant land i.e. if there is a proposed construction on the adjoining/opposite vacant land, then it may hamper privacy, light, ventilation, view, etc. 3) For a flat buyer, if time is not a constraint, but budget and choice of flat (floor, view vaastu, etc) are constraints then he can book his flat, in a project launched recently. i.e. the construction work would have just begun and the possession time may be approx. 1.5 to 2 years. However, one needs to be more cautious in such projects as the same may have little more risks involved, as compared to other projects referred above. The risks commonly seen in such projects are: possession time may get extended due to delay in construction, layout plan of the project/ building may get changed/ revised by the builder, interest burden on ones home loan would increase. Apart from the above, a flat buyer needs to look at certain crucial and critical details and seek information of the same, which is normally not done, before one books his flat. For example: If a builder has promised `piped gas connection but the concerned local government body is unable to provide the same due to shortage of supply and informs the same is not possible in the near future, then you can hardly do anything. For instance, currently

in the northern Mumbai suburbs of Bhandup, one big project faces the same problem wherein the residents are staying for almost two years, without piped gas supply. Further the same may hold true for electricity supply, water connections, etc. Hence a confirmation letter from the concerned local government authorities regarding the availability of the services as promised by the builder may be insisted and seen along with other building permission documents, in advance, from the builders. Needless to mention, builders credentials and past track record needs to be checked from other projects which the builder would have completed in the past as this helps in ascertaining whether the builder completes the project in time, whether the promised amenities are provided, whether the project is handed over to the residents, at the earliest, by forming and registering co-operative housing society, as required by the law, whether Occupation Certificate is obtained on time, whether the maintenance staff appointed by the builder is as per the minimum standard for the initial period, whether the maintenance amount collected are properly paid to the respective agencies by the builder, carpet to built-up ratio constructed by the builder, etc.
(The author is Group Head & Area Manager of GIC Housing Finance Ltd. These are his personal views and may not be endorsed by his company)

Legally Yours

karnataka has fewer archaic property laws

Project approvals and clearances are not major hurdles in Karnataka. The laws here are more conducive, feels legal expert Vatsala Dhananjay

Vatsala Dhananjay (seated) along with her team of lawyers

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July, 09

roperty laws in Bangalore do not carry socialist baggage. Evicting an occupier or a tenant is as easy as serving a notice and taking back the property. Many industry leaders feel the conducive legal provisions make business investments much easier and anxiety-free for foreign players too. As opposed to various other states where existing laws are in a flux and developers are busy pushing the envelope, literally most of the time, from table to table to get clearances and NOCs for their projects, building plans in Bangalore require just about 7 NOCs. Juxtapose this to a place like Mumbai where in you require nearly 50 approvals because of the high-rise buildings that are coming up, and projects get completed two and three years after the stated deadline. Bangalore has comprehensive development plans or master plans fixed by the Bangalore Development Authority till the year 2015, with details of set backs allowed, and Floor Area Ratio [FAR] etc fixed, says advocate Vatsala Dhananjay, a leading property lawyer in Bangalore. The FAR can get extended from time to time, but this would be to the advantage of the developer. Another feather in the cap for Karnataka and Bangalore is the fact that land records are fairly good. Being the IT hub, the tenancy laws are not rigid and landlords can get their premises vacated just by giving the occupier a notice that they would require the premises for their personal use. Another major advantage for the practitioners of property law in Bangalore is that it is not difficult for a legal expert from another state to become familiar with these laws with a little help from a local advocate. There are a lot of common laws practiced in all states like Transfer of Property Act, Companies Act, the Indian stamp Act etc. Many states have their own stamp act too. The registration fees vary from state to state, the acquisition laws are different, zonal use of property varies.

For, instance laws in Mysore, Bangalore and Mangalore are very different. In Mangalore you have coastal laws needed to protect the beaches. SEZs are another phenomenon where you have land totally exempt from laws of the land, where in you dont have to pay registration fees, income tax, exemption from VAT etc, Ms Dhananjay explained while adding that on the byelaws front, one will not know if somebody is violating building laws unless byelaws are clearly intepreted. On the downside, India is peculiarly placed there are central and state property legislations; also, the inheritance laws which are different for Hindus, Muslims, etc. Even in countries like the US you will find regional disparities. Considering that both the US and India are vast countries such disparities are perfectly in order, she adds. In Bangalore, most commonly, there are litigations pertaining to agreement of sale, trespassing into anothers property, power of attorney issues, claiming title or will when the person is alive and the likes. On the issue of special residential zones mooted by CREDAI, Ms Dhananjay does not see specific legal issues that would come in the way of making SRZs a success. The SRZs mooted by CREDAI involve earmarking land specially for housing which would be subject to levy concessions. Land acquisition is an emotional issue in India. The Karnataka Housing Board has vast experience in building budget and lower-end homes. But despite laws to permit government to seize land, the government has many a time dropped the project because of emotional issues. The government has also in the case of SEZs made it clear that it will not be involved in land acquisition. It has asked developers to go in for consent acquisition where in developers get into an agreement after giving fair value to the land owners. Later the government would help in terms of single window clearance for the project. Karnataka has better laws with respect to

conversion of agricultural land for commercial use. Ms Dhananjay said, drawing from her experience, farmers sometimes make a few roads and take the panchayat approval whereby the agricultural land becomes a layout. The farmer then gets the Katha registered. Though this has been supported by the courts, the government is not in favour of it. It has threatened sub-registrars with their jobs if they register such properties. Karnataka government has recently come up with another law asking for betterment charges. They will deem the property as legal, if these betterment charges are paid. The property thus becomes marketable and registrable. Urbanisation is

yet another issue closely related to the city and its surrounding areas. Village areas coming into the city would mean the government has to provide infrastructure which would come under the ambit of the local body. Without regularization, the government will not get revenue. Hence the government has to regularise lands, flats and residential buildings, and without basic documents these properties cannot be registered and banks will not extend loans. The BDA recently permitted a huge high-rise building which had obtained approval from several authorities including the airport authority, Geological Survey of India, among other agencies. However, at the end, it was discovered that BDA would not supply water because the building was far off and BDA did not have jurisdiction. There are two problem

areas when it comes to state laws, one is the Darkast land considered to be wasteland which gets taken over by the government and auctioned. At this point, many people come forward as claimants of the land. The Mysore government had earlier handed over land to certain beneficiaries. There are also the traditional land grabbers, specially the Kammas and Reddys from Andhra Pradesh. These communities have in Andhra Pradesh gone into forcible acquistion of land, and the real owners have had to compromise out of fear. In Karnatka too, these communities have encroached on government land and put up their structures. This is right by a mafia who dare you to throw them out, explained Ms Dhananjay. Every state has been faced with the issue of getting unencumbered land. The usual problems regarding

35
July, 09

www.pwindia.in

Legally Yours
dual ownership arise when agricultural land suddenly moves into layout without requisite permission. The same land is thus defined in a different way with survey number. Bangalore is known for its IT parks, but in IT Parks and luxury townships, Bangalore has typical issues. There are hidden costs as far as maintenance is concerned. Developers will give tenanted property to high net-worth individuals but will keep control of the maintenance costs. The developer will charge parking charges, club house charges, etc. The developer would thus make money out of the property, invite outsiders to use the parking or the club services and charge them for it. Developers take money for construction but still refuse to give up their interests on undivided property. The only solution in such cases would be to allot parking in such high-rise buildings to residents and occupiers. These services cannot be sold since the undivided interest in land is already sold. In terms of maintenance of property the developer maintains it for the first two years after which the residents association looks after it. This model is being followed in Bangalore, though many housing complexes in Mumbai have found it hard to maintain the services once the developer has left the premises in their hands. Even in matters related to management of societies, Bangalore has set a trend. A case in point is Raheja Residency where each wing of the building has its own AGM. But there is an apex body which will look into concurrent issues and disputes between various wings. Redevelopment issues do not arise so much in Bangalore as it is a young city with newer buildings. Secondly, redevelopment in Maharashtra or Mumbai is also tied to the tenancy laws where one cannot evict a tenant easily. Hence developers tend to bend backwards to please tenants and coax them to shift to another building to allow for redevelopment of existing buildings. Also, as the occupiers are mostly from the IT sector the owners need to only issue a notice saying they want their premises back and tenants need to respect it. This was all thanks to the Rent Control Act of 2000. (Edited by Padma Ramakrishnan)

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Italian coffee steams into Bangalore

talian coffee brand Pascucci has made an entry into Indian market with the launch of Caffe Pascucci Shop in Bangalore. The company has chosen Madhura Beverages India Pvt Ltd, part of the Rs300-crore Madhura Group, as the exclusive master franchisee for India. Property World takes a look at its road map. Madhura will invest around Rs60crore over three years to set up 60 outlets across the country. While 10 outlets will be in Bangalore, the rest will be in Chennai, Hyderabad, Mumbai, Pune and Delhi. The outlets, aimed at niche consumers, will be a mix of both companyowned and franchisee outlets. Caffe Pascucci offers a wide range of coffees; the pricing is on par with the other brands. While a cappuccino is priced at Rs55, an expresso cup costs Rs45. Madhura aims to capture a 20-25 percent share of the Rs650crore branded coffee retail business in the country in three-five years. We hope to break-even in four years from now, said V S Sudhakar, Director, Madhura Beverages. India, which is a producer, is a potential market for consumption of coffee as well. When we set up our first outlet in Seoul

from the retail outlets. While elaborating on institutional sales in India, Pascucci added, We are testing retail first in India. We will see the market reaction and later devise a strategy for institutional sales. Madhura Group is into diverse businesses such as construction, education and now food retailing through Madhura Beverages. The company plans to bring to India premium food brands from Europe.

in 2000, the countrys per capita consumption was even lower than in India. And today we have around 50 outlets in Seoul. And in the next seven years, there will be 500 coffee shops there. There is potential in the India market as well, said Mario Pascucci, Managing Director, Caffe Pascucci. Caffe Pascucci, which has been in the coffee business for over 100 years, obtains raw materials from various countries, such as Columbia and Brazil. It also sources Robusta from India. The roasting and blending is done in Italy. The company plans to set up roasting plants in India. Caffe Pascucci is present in over 20 countries. It also supplies coffee to hotels, restaurants and caf bars. Its global turnover is Euro 60-million. Around 80 per cent of the sales comes

REAL ESTATE INVESTMENT & DEVELOPMENT IN INDIA LAND OF TOMORROW

DELHI 23 SEPTEMBER

ALOK AGGARWAL joint md KWALITY DEVELOPERS

AMBRISH BAISIWALA svp development PORTMAN HOLDINGS

GIAN BANSAL ceo UPPAL GROUP

SUBHASH BEDI managing director RED FORT CAPITAL

PHILIP BLUMBERG chairman & ceo BLUMBERG CAPITAL PARTNERS

RAVINDRA CHAMARIA chairman & md INFINITY INFOTECH PARKS LTD

ABHIJIT DAS senior director development - india HILTON HOTELS

SANJEEV DASGUPTA managing director KSHITIJ/FUTURE CAPITAL REAL ESTATE

UTTAM DAV president & ceo, interglobe hotels ACCOR HOSPITALITY

DENIS EPOH vice president, investments SITQ INDIA PRIVATE

BRIAN GARRISON managing director FOREST CITY INTERNATIONAL

SOURAV GOSWAMI managing director WALTON STREET CAPITAL INDIA PRIVATE

ANUJ GUPTA ceo SOUTH ASIAN REAL ESTATE

OEDITH JAHARIA managing director DUTCH HARYANA BUSINESS CONSORTIUM

LALIT KUMAR JAIN chairman KUMAR BUILDERS

AASHISH KALRA co founder & md TRIKONA CAPITAL ADVISERS

PRASAD KONERU managing director RAKINDO DEVELOPERS

SANDEEP KOTAK head - real estate KOTAK MAHINDRA BANK

HOE KIT MAK svp direct investments PACIFIC STAR ASIA

SONICA MALHOTRA director MBD GROUP

ANUJ MALIK head of india ARCH CAPITAL MANAGEMENT

KENNETH MUNKACY sr. managing director GID INTERNATIONAL GROUP

ANURAG MUNSHI transaction director ALPHA REAL CAPITAL INDIA

APURVA MUTHALIA chief investment of cer JP MORGAN INDIA

SHAKTI NATH chairman & md LOGIX GROUP

SAMEER NAYAR md head of real estate, asia paci c CREDIT SUISSE

BRIAN ORAVEC ceo & managing director REALTERM LOGISTICS

JAGDEEP PAHWA director INFINITE INDIA INVESTMENT MANAGEMENT

THOMAS PANG ceo GULF FUND MANAGEMENT

DINKAR RAI ceo GLOBAL TRUSTCAPITAL FINANCE

BALAJI RAO managing director STARWOOD CAPITAL INDIA ADVISORS

ARSHDEEP SETHI vice president, investment & alliances RMZ CORP

SACHIN SHAH managing principal SAMSARA CAPITAL

SUJAL SHROFF managing director VANGUARD REALTY

AVNEET SONI director OMAXE

KAPIL WADHAWAN vice chairman & managing director DEWAN HOUSING FINANCE

...and many more...

www.mygri.com/india

Tel +44. 20 8492 2622 rupa.patel@globalrealestate.org

All material herein is subject to change without notice.

book review

Writing on the wall

By Anil Parameswaran Nair
(Triumph of Humility The Making of ETA; by M.M. Mohiuddin; pages 162; price unstated)
riting a book on a corporate house is a difficult proposition, more so if it is a low-profile, intensely private one. M.M. Mohiuddin, after having spent long years in the company on which he wrote a book, has language skills of a wordsmith. Triumph of Humility has a dash of sprightliness that would even question Mohiuddins age. Some parts of the book a chronological recounting of how ETA Ascon Star Group, are classic in nature not just for the flourish of language but also for the insight it lends to complicated business deals that the company was getting into during hard times, the tenacity of the promoters and the streetsmartness of executors of the plans. What makes the book stand out is that the author has told a story of a company, which is not so well-known in India, more from his own experience than from a point of view of an outsider or an analyst. Yet he is unrelenting in his assessment at many places. To begin with the author himself says, any writing would reflect the writers own perception. This work is no exception. That can be construed as an admission to having overlooked any negativism in the company. But as the narration proceeds his forthrightness becomes stunningly evident. In a passage on reflections, the author says, The extraordinary hardships and humbling experiences which the first generation of the family along with the pioneering employees have passed through to reach where the group is today may be lost on the new generation that has had the good fortune of being born into opulence. Some amount of aristocratic leanings and sycophancy will also invariably enter the management system. Again, it is the extent to which the new generation protects itself from such hazards that will determine the future of ETA Ascon Star Group. The evolution of various subsidiaries of the ETA Ascon Group also makes interesting read. For instance, the air-conditioning business was started in early 1976, when there was no concept of ancillary work like ducting and piping in the UAE, the supplier companies had to organize their own labour force. In those days, as in India now, air-conditioning

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July, 09

Abdullah Al Ghrair Syed Salahudin, Essa Al Ghurair and M.M Mohiuddin in a private jet on a visit to Kazakhstan on July 23, 2006

companies in the UAE carried out only their bit of work, leaving building, electrification and piping to contractors. Some of the construction companies carried out electrical and sanitary work themselves with in-house capability. Mohiuddin goes on to explain that only European contractors undertook complete elctromechanical work involving air-conditioning, electrical, plumbing and sanitary work. We discovered that a company undertaking only air-conditioning work will be able to operate in a small segment of the market. Often, we also had to accept the position of sub-contractor under the electromechanical contractor. Worse, the profit margin in this arrangement was less. To become a composite electro-mechanical contractor Mohiuddin had to acquire capability in electrical, piping and sanitary work. Incidentally, Acson had small outfits for electrical and sanitary work in the UAE which were amalgamated to the air-conditioning firm. Triumph of Humility has three major sections on the founders of the company, the beginning phase which was ostensibly the hardest, the growth phase and the present. There is a

section for the authors own reflections as Director of ETA General, ETA Engineering Pvt. Ltd. and Prime Health Care Group, a chain of medical centres associated with the ETA Ascon Star Group. There are several passages in the book that can be quoted as prime management lessons, but nothing better for the real estate sector in India today than the story of how a convict at a kings court made a last wish of making the kings horse fly in six months. When the bemused king granted him the stay, the convict is known to have counted on three possibilities in six months the king might change his mind and forgive him or the king might die or be dethroned or, in best of situations, the horse might actually start to fly. The only downside to the book is that the number of players covered in various activities of the company leaves a trail of confusion in the readers mind by the time he reaches 100 pages of Triumph of Humility. It would have been best if there was a pictorial representation of the family explained in each chapter.

By Invitation

Great Expectations
three fiscal stimulus packages and additional post-budget items of expenditure increased Central Governments actual net borrowing to more than two and half times the initial budget estimate. Broad expected policy changes must relate to stepping up overall growth and its sectoral breakdown, drive employment growth and infrastructure; basic thrust on increasing domestic demand and domestic investment as also to facilitate better export performance; focus on Aam Admi and attention to areas, such as, textiles, leather and gems and jewellery that were devastated by global meltdown; operationalisation of the manifestos proposal to increase the minimum wages under the National Rural Employment Guarantee scheme to Rs100 per day and thrust on providing food security and accent on resurgent manufacturing. Micro, small and medium enterprises (MSMEs), which lack the wherewithal to meet the challenges of the downturn, must be significantly promoted. Passing of landmark financial sector legislations, e.g., the Pension Fund Regulatory and Development Authority Bill to bring more private capital into pension fund management; resumption of the disinvestment programme and fast inclusive growth with adequate, timely and cost-effective credit are also needed. While 20 per cent tax break for new investment is undesirable because of its distortionary effects, road map for goods and services tax (GST) is essential. In the banking and financial sector, policy measures could include classification of advances to road projects and other projects as secured where the exposure is not fully secured by tangible security; relaxation in asset classification norms for infrastructure projects; restoration of provisions under Section 10 (23G) of the Income Tax Act and issuance of prudential guidelines on restructuring of advances by Banks to commercial real estate sector. Other proposals could include interest subvention for agricultural term loans; Credit Guarantee Fund for financing tenant farmers; Credit Guarantee Fund for financing MFIs/NGOs for on-lending; credit delivery through agro-processing units and similar intermediaries engaged in contract farming; creation of more irrigation potentialfinancing SPVs and Indirect agriculture status and extension of tax incentives for creation of agricultural infrastructure. The process of broad-based economic growth with distributive justice needs to be vigorously pursued to generate widespread prosperity and raise living standards of persons. In conformity with the Governments pronounced policy focus, all these measures could amount to a new deal for India. But the high fiscal deficit restrains policy choices and necessitates striking a balance between the competing demands of different sections of society. (The author is Chief Economist & DGM, Canara bank)

By Manoranjan Sharma
hile the presentation of the budget is routine, the budget indicates the state of the economy, priorities of the government and the use of instruments to realize identified objectives, influence direction and pace of the economy. Hence the budget, which is a document of estimates of receipts and expenditure based on assumptions and strategies to achieve those estimates, is more than a public statement. This budget is being formulated in the context of the global meltdown with global growth projected to shrink by 0.5 to 1 per cent in 2009 in contrast to an expansion of 3.2 per cent in 2008 (IMFs March 2009 forecast) and global trade to shrink by 9 per cent (increase of 2 per cent in 2008) in volume terms in 2009, the growth moderation in FY 09 to about 6 per cent, near stagnation in the index of industrial production (IIP) and widening of trade deficit to $119-billion during April-March 2008-09. The

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Affordable Urban Housing for all by 2015. But how?

By Sreedhar Krishnamurthy
five to six years, urban India needs to build at least 11-million houses to meet the demand for housing that accompanies rising levels of urbanization. In order to take affordable housing to the masses, we need to study the segment better and reach out to them to make it a success. What really is affordable housing? CRISIL has defined affordable housing as dwelling units that can be afforded by a majority of households in a city (assuming 60 per cent of the households can afford a house). In other words, to call a housing unit affordable, it should be within the means of at least 60 per cent of the families within a city. In order to arrive at housing values, CRISIL has grouped cities into three groups namely GI, GII and GIII. GI represents the top cities (Mumbai, Kolkata, Delhi, Chennai, Hyderabad and Bengaluru). GII represents second tier cities (Pune, Ahmedabad, etc.) while GIII is a sample of low end urban cities like Ujjain, Aurangabad, Tumkur, etc. The mid income category of GI, GII and GIII cities can only afford houses priced below Rs18-lakh, Rs16-lakh and Rs9-lakh respectively.

ffordable housing is suddenly on everyone radar, be it the government, the real estate players, the HNI investors or even the bankers. Many consider affordable housing to deliver the sector from the woes of economic downturn. In the next

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Affordable EMI Affordable Loan Affordable Housing Investment
Source : CRISIL Research

Group I < Rs15,00,000 < Rs20-lakh

Group II < Rs12,00,000 < Rs15-lakh

Group III Rs3,000 Rs7,500 < Rs7,00,000 < Rs10-lakh

Rs7,000 Rs15,500 Rs6,000 Rs14,000

As the cost of the affordable housing unit goes up there will be fewer takers from the midincome category. Now working back-wards, a developer is selling anywhere from Rs2,000 per sft to Rs2,500 per sft units in a radius of 10-15 kms from the Central Business District ( CBD). Assuming that a typical affordable unit is 800 sft , each units basic value would be vary from Rs16-lakh to Rs20-lakh. Adding another 20 per cent to the basic cost to include the car park, statutory deposits, registration and stamp duty , the overall cost of a unit would likely to be in the range of Rs20-lakh to Rs24-lakh. What is the ideal type of unit design? Developers should design the affordable units so that a typical buyer can migrate from one unit to the other based on his earning capacity and need. A typical affordable housing development should be a combination of : Studio units with kitchenette ranging from 250-sft to 450-sft Single BHK units ranging from 500-sft to 700-sft. Two BHK units ranging from 800-sft to 1,000-sft. A typical affordable unit of 2 BHK (800 sft -- 1000 sft ) should provide the following: A living-cum-dining area One master bedroom Second bedroom or a childrens room/ study room Kitchen with attached utility and laundry area One attached and one common toilet One balcony What is the ideal size of development? Every developer should at least develop the affordable units development on a minimum land area of 10-acre to reap the benefits of scale of economy. Typically on 10-acre with a FAR of 2.0, a developer can develop about 1,000 units. As the FAR goes up, more number of units can be developed. The developer can also provide common facilities on pay and use basis - laundry, common food court, ATM, banks, convenience store, creche, schools, gymnasium and swimming pool and also derive a separate revenue stream by renting out the premises to operators. The common or open area as stipulated by statutory guidelines can be utilized for free outdoor sports facilities. When these

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July, 09

facilities are provided, the residents will not feel the need of larger apartment space. Good landscaping with amenities for childrens play area, gazebos, park benches will make the residents feel at home even with smaller homes. The developers should employ fast track construction methods like pre-cast construction, new types of formworks, quick setting concrete and various other technologies to achieve fast turnaround times to deliver the units. The developer should maintain the development for a minimum of five years at optimum standards before handing over the same to the residents association and charge a nominal maintenance fee for the same. Part of the monthly maintenance fee should be collected as a maintenance sinking fund initially with the sale of unit. The sinking fund has to be invested judiciously by the developer and the interest from the same should subsidize the monthly maintenance. A unit buyer can migrate from a studio unit to a 2 BHK unit based on his affordability and need in the same development. Further even senior citizens can scale down in the event of any eventuality. What is required from the state governments? The state governments should encourage affordable housing and provide the following facilities/ incentives: l Recognise the development as a affordable housing unit and provide quick plan sanction and other statutory approvals. l Create a single window agency to process all the documentation and approvals. l Express sanction of power and water and infrastructure facilities to the development. Provide twice or more the FAR to such developments so that it is profitable for the developers. l Exemption of construction materials cement and steel and capital equipment such as lifts, electrical equipments, pumps and gensets from VAT and other taxes. l Reduction in stamp duty and registration charges for affordable units. l Recognise affordable units as a public necessity and set apart land for the same in the new or upcoming layouts so that developers can bid for the land and purchase the same for developing affordable housing units. l Create a state level affordable housing

authority to ensure transparency in the development process and monitor the quality and progress of work and ensure units are transferred to the buyers in a realistic timeframe. l Acquire land and allot land at concessional rates to prospective developers to bring down the overall development cost. l Create a bank of accredited developers for affordable housing units and provide necessary education to the general public. What is required from the Centre? The Centre should create a five year plan for affordable housing and ensure ways and means to meet the shortfall of the housing units. Recognise and stamp a development of a minimum of 10-acre or 1,000 units as an affordable units development (AUD) and provide special benefits to the developer such as service tax exemptions, corporate tax holidays etc. Create a national level Affordable Housing Development Authority which shall provide overall guidelines for affordable unit developers and the state authority. The Centre should set apart certain amount of funds for every five year plan to be disbursed through the National Housing Bank to the banks to provide loans at concessional rates for affordable unit buyers. What is required from the RBI and the Banks? The housing loan interest rates have to be brought down to realistic levels to aid affordable home buyers. The banks should sanction low cost loans as stipulated by the affordable housing authority on a fast track basis as soon as a development has been certified as affordable housing development and all development documents of the developer has been scrutinized. Provide innovative mortgage schemes to assist the buyer. The successful dream of providing affordable housing units to each and every citizen of India lies with the concerted and combined effort of the developer, banks and the state and central governments. (The author is General Manager Sales & Marketing, Adarsh Group, Bangalore. These are his personal views.)

Special Reports

Mumbai Residential Market to ease

By Our Bureau
rices in the Mumbai residential market are expected to remain stable or correct by another 5-10 per cent in the next six months. Buyer sentiments are low even as developers are selling properties at squeezed margins. Developers are offering 25 to 30 per cent discount on the market rate but currently there are not many buyers at the prices that are being quoted both in the primary and secondary market as well as in lease rentals. The Mumbai residential market has seen a 15-20 per cent price correction in the first quarter of 2009 and an almost 50 per cent price correction since the slowdown. The active high end residential real estate markets in South Mumbai including Cuffe Parade, Malabar Hill, Nepean Sea Road, Worli, Churchgate and Prabhadevi. are highly saturated and the average capital value in these areas is around Rs45,000 per sq. ft.

Residential Areas in Central Suburbs Wadala Sion Chembur Ghatkopar Bhandup Mulund Powai
Residental area capital values

Grade A (In Rs. PSF) 6,000-8,000 5,000-6,500 5,500-7,000 5,600-7,500 4,500-6,000 5,000-7,000 9,000-14,500

Grade B (In Rs. PSF) 5,000-6,000 3,500-4,500 4,500-5,500 4,500-5,600 3,750-4,500 3,750-7,000 4,500-8,000
Source: Celadon Real Estate Advisors

Residental area capital values

Residential Areas in Western Suburbs Juhu Andheri East Andheri West Jogeshwari Goregaon East Goregaon West Malad West Malad East Kandivali East Kandivali West Borivali West Borivali East Mira Road Vasai Virar

Grade A (In Rs. PSF) 14,000-18,000 6,500-9,500 12,500-14,000 7,000-8,000 6,500-7,000 5,500-7,000 5,000-6,500 4,600-5,500 6,000-6,500 5,500-6,500 4,500-6,000 4,000-5,500 2,200-2,500 1,500-1,800 1,750-2,000 Grade A (In Rs. PSF) 9,000 -11,000 20,000 - 28,000 14,000 - 18,000 9,000-12,000 15,000-18,000 9,000-11,500 14,000-17,000

Grade B (In Rs. PSF) 12,000-15,000 5,500-7,000 6,000-12,000 4,800-6,500 4,500-6000 4,800-5,200 4,200-4800 4,000-4500 4,000-5,500 4,500-5,700 3,800-4,500 3,500-4,000 1,750-2,200 1,300-1,550 1,250-1,700 Grade B (In Rs. PSF) 7,000-9,000 16,000-20,000 10,500-13,000 7,000-9,000 12,000-15,000 7,500-9,500 8,000-13,000

Residential Areas in Western Suburbs Bandra East Bandra West Khar West Santacruz East Santacruz East Vile Parle East Vile Parle West

Currently RNA Corporate is coming up with RNA Mirage in Worli, while D B Realty has announced Orchid Turf View in Mahalaxmi in the South Mumbai region. Bandra, Juhu and Khar are the most expensive residential areas in the Western suburbs. In Bandra, the average capital value is around Rs25000 per sq. ft while in Khar and Juhu it is around Rs20,000 per sq. ft in a Grade A building. Goregaon, Malad, Kandivali and Borivali in western suburbs are currently having abundant supply and prices have softened and range between Rs4,000-7,000 per sq ft. Reputed builders in the city like Kalpataru, RNA Corporate, Rustomjee, Evershine Builders are coming up with their projects in the western suburbs. Central Suburbs comprising Wadala, Sion, Chembur, Ghatkopar, Bhandup are seeing residential projects by developers like Ajmera Group, Nirmal Lifestyle, Runwal Group, Kalpataru and Akruti City. The average capital value in these areas is around Rs6,000 per sq. ft in a Grade A building. While in the Powai area the average capital value is around Rs10,000 per sq. ft. South Mumbai is the most expensive residential area in the city. The average lease rental in the area is around Rs1,50,000 for a 2BHK flat per month. The flats in the area are bigger in size compared to the other residential areas in Mumbai. Andheri, Goregaon and Borivali have seen rentals come down by around 10 to 15 per cent as compared to the capital value, which has almost corrected by around 30 to 40 per cent. The average lease rental for a 2BHK apartment in a Grade A building in the central suburbs is around Rs30,000 per month while in a Grade B building it would be anything around Rs18,000 to 20,000 per month.

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further drop in Mumbai Commercial rentals likely

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July, 09

he global slowdown continues to impact the demand for office space across all the business districts with extended business districts like Lower Parel witnessing the highest drop of 37 per cent in office rentals followed by 29 per cent in Worli. In an overview of the commercial, residential and retail sector in Mumbai, Celadon Real Estate Advisors point to demand showing no signs of recovery leading to the softening of lease rentals and capital rates across all segments which is likely to continue for some time. According to the report, the commercial supply across Mumbai has not shown any major change with respect to demand-supply. In Q1 2009, Mumbai witnessed a total supply of 2.5-million sq.ft as against anticipated 4 million sq ft. The slowdown in demand and financial constraints has forced many developers to reschedule construction plans. The majority of supply was concentrated in suburban markets of Malad and Andheri.

Rental Market Indicators Sub Market CBD (Nariman Point, Fort, Cuffe Parade) Grade A CBD (Nariman Point, Fort, Cuffe Parade) Grade B EBD ( Lower Parel) Grade A ABD (Bandra Kurla Complex, Kalina) Grade A ABD (Bandra Kurla Complex, Kalina) Grade A ABD (Bandra Kurla Complex, Kalina) Grade B SBD (Andheri, Vile Parle, Jogeshwari) Grade A SBD (Andheri, Vile Parle, Jogeshwari) Grade B PBD (Malad, Powai) Grade A PBD (Thane, New Mumbai) Grade A Mar 09 320 250 200-220 300 300 250-300 200 100 80 45 Apr 09 300 200-250 150-220 200-250 280 250 170 80-100 60-70 30-35 May 09 250 200 150-225 175 250-300 200-250 150-170 100-115 60-70 30-40

The Central Business District (CBD) of Nariman Point has witnessed a significant correction in rentals over the last 6 9 months and vacancy levels are around 15 per cent. With a general slump in demand and an increasing number of organizations exploring alternate locations, the vacancy levels are likely to increase in the medium term with further expected decline in rental values. l Nirmal Building, a Grade A building at Nariman Point is charging a lease rate of approx. 200-250 per sq. ft. Despite the general lack of demand, the micro market of Extended Business District (EBD) Lower Parel and Worli witnessed a revival of construction activity in many of the projects that were earlier stalled. Tower 1 at One India Bulls Centre (450,000 sq.ft.) in Lower Parel is the only newly constructed building ready for occupation and operation. Many other projects have picked up pace and are getting ready to be delivered over the next few quarters. Major Leasing Transactions Tenant Etisalat Millward Brown Varian Medical Systems TransUnion

Central Business District

Source: Celadon Real Estate Advisors Nariman Point witnessed a fall of around 47 per cent as compared to last year wherein the Rentals were as high as Rs 475 per sq. ft. per month, followed by Lower Parel, which saw a drop of 37 per cent in its rentals, Worli by around 35 per cent and BKC by around 20 per cent. l Grade B Building in Lower Parel is charging

Extended Business District

a lease rate of approx. Rs117-125 per sq ft and a capital value of approx. Rs15000 per sq. ft.

months back; the rates have now come down to approx. Rs150-175 per sq. ft. The Secondary Business District (SBD) comprising of Western and Eastern Suburbs witnessed the sharpest correction vis--vis other micro markets. The ongoing Mumbai Metro project and ensuing traffic congestion has further subdued client sentiments, thus lowering the attractiveness of this location for corporate occupiers. Some other projects in this region are Kamala Business Park by Kamala Constructions, Solitaire at Marol by BPM Industries, City Park a 140000 sq. ft. of commercial office project to be ready in 1st quarter. l Ajmera Group is adding on 1-million sq. ft. of IT space on Andheri Kurla Road which is expected to be completed by Q1, 2010. l Rustomjee Natraj a 286,000 sq. ft. project at Andheri (E) will be complete in August 09. Rustomjee Aspire a 124,000 sq. ft. project at Sion will be complete in November 09 and is charging a rental of Rs150

The Secondary Business District

The Alternate Business District (ABD) comprising of BKC and Kalina has a ready supply of about 1-million sq.ft of office space and an additional supply of about 0.5-million sq.ft is expected to come on-line in the next quarter. Lease rates have taken a major shift. l Fortune 2000, a project in BKC, was charging a rental of approx. Rs280 seven Approx Size (sq.ft.) 1,20,000 11,000 10,500 3,000

Alternate Business District

Location /Building Techniplex, Goregaon West Leela Business Park, Andheri East Kalpataru Square, Andheri East. MMTC House, Bandra Kurla Complex

Source: Celadon Real Estate Advisors

Mumbai Commercial
Project/Developer Rustomjee Aspiree Rustomjee Elita Orchid Corporate Park DB Centre Western Edge Sigma Dosti Presido Dosti Business Park Comerz/Oberoi
Major Supplies coming in different Regions

Locatio Sion Juhu Sahar BKC Borivali Navi Mumbai Navi Mumbai Thane West Goregaon East Bandra East Goregaon West Status December 2009 Proposed Proposed August 2009 March 2009 March 2010 May 2009 December 2010

Area (Sq. ft.) 1,24,000 3,10,000 8,50,000 6,50,000 10,10,000 3,11,000 8,50,000 5,50,000 7,00,000 2,00,000 6,46,700

Status November 2009 December 2010 October 2009 Q2, 2011 In Process Q2, 2011 Q3, 2011

RNA Bizz RNA Petals Area (Sq. ft.) 7,00,000 1,20,000 1,50,000 2,86,000 3,67,000 6,00,000 4,00,000 9,00,000

Source: Celadon Real Estate Advisors

Project/Developer Akruti DLF City World Akruti Central Square Akruti Central Link Rustomjee Natraj The Palladium Times Square Silver Uthopia Akruti (IRIS)

Location Andheri (E) MIDC MIDC Andheri (E) Andheri (E) Andheri (E) Andheri (E) Andheri(E)

Significant Upcoming Projects

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The proposed monorail project in Mumbai is expected to ease congestion in the highly crowded Jacob Circle, Wadala and Chembur areas, providing connectivity to the existing suburban railway and forthcoming Metro Rail.

In addition to the approximately 2.5 million sq.ft nearing completion, about half a million sq ft of space was released in this quarter in the Peripheral Business District (PBD) of Malad,

Peripheral Business District

Goregaon, Powai and Vikhroli. Low demand levels are expected to ensure that values in this micro market remain under substantial pressure.

Mumbai retail to face oversupply

Recession has hit the retail sector hard and of the ten malls that were supposed to be operational in 2009, only R City by Runwal at Ghatkopar and Dreams mall by Satra Group in Bhandup are coming up, with developers having abandoned all other projects. Currently, there are around 33 malls operational in Mumbai. The occupancy in R City Mall (1.2 million sq. ft) at Ghatkopar is approx. 90 per cent and is on a lease model. R Mall in Thane, a 40,0000 sq. ft. project is expected to be completed in October 2009. Demand for retail spaces is mostly in malls which have a hypermarket or a supermarket. Hypermarket retailers like Big Bazaar have emerged as major crowd pullers and thus occupy major area in malls at rentals varying from Rs30-35 per sq. ft. Retailing in the western suburbs has always been a favorite spot for buyers with malls like

Market outlook

Inorbit at Malad, Infiniti at Andheri seeing high footfalls due to the presence of multiplexes, food and beverages as well as hypermarkets and supermarkets in their malls. Large percentage of retail development in Central Suburbs is in the areas of Ghatkopar, Mulund. These locations will expect an overall supply of around 4 million sq. ft. in the year 09-10. Some of the good malls in Mumbai are located in New Bombay and areas of Vashi, Thane. Vashi has four malls next to each other and each one is doing good business with the maximum footfalls. Restrained expansion plans by major retailers in setting up standalone stores on

Central suburbs

Navi Mumbai

Western suburbs

High Street Lease Rentals

main streets has led to fall in leasing activity and has a direct effect on the average high street rentals. As a result average rentals in Linking Road, Colaba Causeway has witnessed a drop of approx. 50 per cent. Kemps Corner/ Breach Candy witnessed a drop of approx. 30 per cent, Lokandwala (Andheri West) witnessed a drop of approx. 10 per cent. Rentals in Fort Fountain witnessed a drop of 8 per cent. Due to negligible amount of leasing transactions happening in this region, developers have been forced to make an overall correction in order to boost demand. Meanwhile western suburban locations like Andheri, Malad exhibit rentals ranging from Rs200-250 per sq. ft. Central suburban locations like Goregaon, Kandivali, Borivali, Ghatkopar, and Mulund charged a rental ranging from Rs150-175 per sq. ft.

Opinion

With the presence of about 30 malls in

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MALL/Developer Oberoi Mall Sheth Developers Dreams Mall (Satara Properties) Koram Mall (Kalpataru) Neptune Mall R Mall (Runwal Group) Mumbai and 8-10 proposed to come up may mean an over supply as demand is not catching up. The rental values will totally depend on the LOCATION Goregaon Thane Bhandup Thane Bhandup Ghatkopar
Source: Celadon Real Estate Advisors Upcoming Malls in Different Locations

success of these malls. Malls which have come up in the last quarter in the recession period have been paying rentals on business sharing

model. About 7-8 malls proposed to come up this year have been shifted to the next year when the situation stabilizes.

TOKYO most expensive, Mumbai ranks Sixth in rentals

I
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n a ranking of the worlds most expensive office markets, Mumbai came sixth, while Tokyos Inner Central District supplanted Londons West End as the worlds most expensive office market, according to CB Richard Ellis Group, Inc. (CBRE) Global Research and Consultings semi-annual Global Office Occupancy Costs survey. Londons West End, is now the worlds second most expensive office market, followed by Moscow, Hong Kongs Central Business District and Tokyos Outer Central District says the CBRE report, which tracks office occupancy costs in more than 170 cities around the globe. Anshuman Magazine, Chairman and Managing Director, CB Richard Ellis South Asia says, this ranking highlights the decrease in rentals we have witnessed in the last six months due to a reduction in demand. However, Mumbai continues to be in the top 10 and Delhi at 12th place reflects the shortage of prime office supply in India. To reduce office occupancy costs further and facilitate more supply of office space, we need to urgently improve infrastructure and amenities. This would bring our world rankings down further and make India more competitive. Across the 170 cities as a whole, office occupancy costs fell 2.8 per cent over the 12 month period ending March 31, 2009 (on an un-weighted average basis) compared with an increase of 8.0 per cent in the 12 month period ending September 30, 2008 Singapore had the largest year over year decrease in occupancy costs with a drop of 34 per cent. Some markets did record increases in costs over the last 12 months but these marketssuch as Charlotte (U.S.), Marseille (France) and Perth (Australia)are very much

Picture: Sulakshana Varhadkar

Tokyo the worlds most expensive office market

the exception rather than the rule and these increases are either due to exceptional local market conditions, such as the completion of a top quality new building in a market where none was available previously, or that occupancy costs remain above the level of a year ago despite the fact that they are now falling. The great global recession has taken its toll and the most expensive office markets, as measured in dollars, are considerably less expensive than a year ago and occupiers are now in a strong position to procure prime space at attractive costs. For instance, a year ago office space in Londons West end was

nearly $300 per sq. ft., while today that space goes for $172 per sq. ft. Tokyo (Inner Central) was the worlds most expensive market with an occupancy cost of $183 per sq. ft. Hong Kong (CBD) was the fourth most expensive global market with occupancy costs of $150 per sq. ft. Tokyo (Outer Central) and Mumbai were the other two Asia-Pacific markets in the top 10 most expensive cities roster. Singapore, while experiencing the largest drop in occupancy costs, was not alone among Asia-Pacific financial centers in seeing a sharp

Asia-Pacific

Top Ten Most Expensive Markets (In US$ per sq. ft. per annum) 1. Tokyo, (Inner Central) 2. London (West End) 3. Moscow 4. Hong Kong (CBD) 5. Tokyo (Outer Central) 6. Mumbai 7. Dubai 8. Paris 9. London (City) 10. Dublin US$/SF/annum 183.62 172.62 170.24 150.42 149.58 131.04 122.52 114.89 103.50 93.56

Fastest Changing Occupancy Costs (In local currency & measure) Top 5 Decreases 1. Singapore 2. New York (Midtown) 3. Hong Kong (CBD) 4. Boston (suburban) 5. Hong Kong (Citywide) Top 5 Increases 1. Marseille 2. Perth 3. Santo Domingo 4. Durban 5. Charlotte % Change -34.4 -31.5 -29.9 -29.7 -28.5

30.4 22.2 21.7 18.2 14.2

Occupancy costs represents rent, plus local taxes and service charges. The occupation cost figures have also been adjusted to reflect different measurement practices from market to market.

decline. Hong Kong, Tokyo and Mumbai posted large drops in office occupancy costs. Londons West End was the worlds second most expensive office market at $172 per sq. ft. and Moscow was a close third with

Europe

occupancy costs at $170 per sq. ft. Dubai, Paris, the City of London and Dublin all were in the top ten most expensive markets. The most expensive office location in the Americas is still New Yorks Midtown with

Americas

occupancy costs of $68 per sq. ft. While occupancy costs in New Yorks Midtown are high for North America, it ranked just 21st globally. Bostons suburban market posted a decrease of nearly 30per cent, putting that market in fourth position in the top decreases chart in the report.

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TRADING SPACES
COMMERCIAL WEST ZONE
Property Deal: Lease Description: Available 600sq.ft carpet ofce premises on Lease at Arun Chambers 102, Tardev Mumbai Central, Contact: 9821086399

RESIDENTIAL SOUTH ZONE

Property Deal: Rent Description: Ofces on rent at Barton center, M G Rd 650/750/950/1500/1800 sft for MNCs, corporate, attractive terms Contact: Silverline +91 80 4082 8888/25592881 Email: realtor@silverlinerealty.com Property Deal: Sale Description: Gravity offers exclusive villa plots (60x90) @ 10 Lacks with int. standard golf of 150 Acres Contact: 9900506963 Property Deal: Sale Description: Plots for Sale 30x40 @ Rs 2 Lacs 40x60 Rs 4 Lacs, Club House Swim Pool park and all Amen, Apprl under process Contact: 9008 38866, 96111 17281 Property Deal: Rent Description: For rent commercial 2200 sqft ground oor & 2200 sqft 1st oor sampige road near 8th cross Malleshwaram Contact: Manju 9845105234 Property Deal: Sale Description: Site for Sale clear title site # 2703, 7th Main Hal, 3rd Stage , LIC Colony J. B. Nagar Contact: 9590025900 Property Deal: Sale Description: Commercial site for sale, Koramangala 60ft Road 500sqft corner Koramangal 80ft Rd.1750 sqft, Indiranagar 100ft Road 5400Sqft, C.M.H.Rd4050sqft Outer Ring Road 35000sqft Contact: 9663219775, 9845016432 Property Deal: Lease Description: 26000 sq.ft space available for institute , Ofces & 15500 sq.ft godown at NH-30 Patna City Contact: 9334284304, 9304414153 Property Deal: Lease Description: Ofce space Rent Plug/ Play Fully Furnished each 3500sq.ft 2 Floors available Fully (Or) Flr. Wise. Contact: 9880150734 Property Deal: Sale Description: 1350 sqft Premium BBMP Plot behind Mantri Splendor on Hennur Road, 11Km from M.G.Road west facing, Rs 1400 per sqft. Contact: 9845344248

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Property Deal: Lease Description: Wanted 1073 sqft 2000sqft Available on Lease 1073sqft-4000sqft, Contact: Ashish Badoni 9810323410, asishbadoni@yahoo.com

WEST ZONE
Property Deal: Lease Description: Required 3/ 4BHK for lease and outright at Santacruz/Khar/ Bandra (Preferred New Building) Contact: SSR 9820491161

Property Deal: Buy/Sale Description: Borivali (W) S.V Road, Nr y over 650 to 2000 (14ft Ht + Loft) Commercial bldg under Construction Contact: 9821259709 Property Deal: Lease Description: Nr Borivali stn, 600 sqft furnished ofce GR.r Suitable for Doctor/Clinic, etc. Contact: 9821018708 Property Deal: Lease Description: Bandra Linking Road Ofces 1400sft on Immediate Lease, prime Location Road facing with singage res pkg. Contact: 9920202227 Property Deal: Lease Description: MNC 1100 or 5500 sft A++ bldg full r, exclusively furnished, Link Road Andheri (w) Contact: D.S.Estate 9820041320 Property Deal: Lease Description: Pydhonie/Tambakanta comm., Premi.avail1500/400 Mktg/Car park. Ideal for Bank/MNC on Outright/LL. Contact: 9820400216 / 9820110241 Property Deal: Sale Description: Plots for Sale at Wada 100 Acres Sativali 25 Gunthas Indl. Pune Hotel Plot 1.25 Lac Sft. 18 Crores. Contact: Lalwanis 9820064562 Property Deal: Lease Description: Shop opp, Khar Railway Station, 250 & Garage/Shop 200 main Linking rad, Bandra on rent, Prime Business Locations. Contact: Ramesh 9820490600 Property Deal: Lease Description: Ofce on Lease at Nariman Point, 1400 sq ft, 14th Floor, Ideal for MNCs, Banks, Airlines, Brokers Excuse, Contact: 9320255211/9322229190 Property Deal: Sale Description: For Sale 750 sq.ft Built up in commercial Complex, 2nd Floor J.P.Road, Andheri (W) Broker Excuse Contact: 9821590739/9820255484

Property Deal: Buy Description: Factory Land & Farms in Patna (Bihar) wanted in vestors Forland in Delhi & Patna Contact: Dr.S.S.Parmar 9891282243 Property Deal: Sale / Lease Description: Collaboration invited from owners having plot area300/500 yards for self use .NFC GK-II preferred Contact: 9310290807 Property Deal: Buy/Sale Description: Prime Plots conrm 500, DLF-I, 18 Mtr Road, 1000 Gulmohar (3 side corner) Kachnaar, Shahtoot 100 MG Road , 680 M-1, 500 M-1 Contact: 989977355 Property Deal: Sale Description: 1.5 Acre Agriculture land 4 km from sohna Nuh Road Suitable for industry & 1.2 Acre farm land corner plot with sweet water 2 km from sohna Contact: 9810591933, 9811056851 Property Deal: Sale Description: 14.5 Acre farm/Agri-land between Dist. Nuh & Hodal 30km from Sohna large Front 50 ft. road clear title Contact: Owner 9810083657, 9810183657

Property Deal: Lease Description: 1BHKon Rent / 2BHK on Outright sale (both with car parking ) at jolly makers III, Cuffe Parade.1 Contact: Arun 9820063645 Property Deal: Sale/ Lease Description: Available 2,3,4 BHK Flats posh locality, Prabhadevi, Shivaji Prak, Dadar, Mahim Also on Rental Contact: Rane Associates 9869507162 / 24451586 Property Deal: Lease Description: 2 BHK at Kavi Apts, Worli Seaface Fully Furnished Compensation 80K Contact: Owner 9820321248 Property Deal: Sale/Lease Description: Grand Sea view lavishly done up 2BHK on Cadell rd opp Scottish on LL@55K 3BHK Sale 1250BU 7th Flor 2prk @ 2Cr. Contact: Rohit 9819066224 Property Deal: Sale / Lease Description: 2BHK Flat at Pali Hill Bandra area 1405 sq.ft new Construction. Contact: 9322604906 Property Deal: Lease Description: 2 BHK at Filly Furnished, having sea view & 2 still parking in juhu Contact: Varsha 9987966999 Property Deal: Sale Description: For Immediate sale fully furnished, 3BHK at with sea view at Juhu Versova Contact: 65225981/9820276451 Property Deal: Sale Description: At 7 Bungalow, Sea facing 4BHK higher r 2050sq.ft, 3 Cr. Contact: 98920032568 Property Deal: Sale Description: Flat on sale at Windermere HSG Soci, 18th Flr parking area, 100 sq.ft Oshiwara Link road, Nr Mega Mall Andheri. Contact: 9967549632/9833855259

46
July, 09

EAST ZONE
Property Deal: Sale Description: Commercial space on Park Street approx 3000sqft with ground parking Contact: 09999662232 Property Deal: Lease Description: 2100sq.ft Ofce/ Commercial space is available for rent at city center, salt lake Kolatta.only for MNC Corp Ofces Contact: 9748731992 Property Deal: Lease Description: At park street Approx 550sq. ft furnished ofce with A.C, toilet & pantry on rent. Contact: 22651314, 9874818283

SOUTH ZONE
Property Deal: Sale Description: Rustam Bagh behind Manipal Hospital 3 BHK Duplex Flat 1900sqft + Terrace @ 53 L + Registration Contact: Citi Properties 9945023331 Property Deal: Sale Description: 2BHK Semi Furnished Flat for Sale at Basavanagar near HAL with basic Amenities 28 Lacs Negotiable Contact: 9880134224 Property Deal: Sale / Lease Description: Ready to occupy super luxury 3 BHK ats for sale/- rent, off M G Road with International Standard Amenities Contact: 9379632233 Property Deal: Sale Description: Exclusive 2 BR Study with woodwork, 1404, all amenities in Cambridge Layout Brokers excuse. Contact: 9886044378 Property Deal: Sale Description: Near Commercial Street N.P. Street 3BHK Flat 1650sqft for sale 55 Lacks. Contact: 9739407662 Property Deal: Sale Description: BHANASHANKARI 2nd stage near BDA Complex 2/3 BHK at for sale 45 lacks 65 Lacks Contact: 984400330038 Property Deal: Sale/Lease Description: 2BHK semi furnished at for sale at Basavanagar near HAL with Basic Amenities 28Lacks Negotiable Contact: 9880134221 Property Deal: Sale/Lease Description: Ready to occupy super luxury 3BHK ats off M.G.Road with International Standard Amenities Contact: 9379632233 Property Deal: Sale Description: Mangalya Residences, Benson Town 3 BHK Penthouse apartment with all amenities. Contact: Silverline +91 80 4082 8888/25592881 Property Deal: Buy/Sale/Lease Description: Apartment Independent Houses Of ce Spaces in all around Bangalore Contact: 9964750997, 9986237794

NORTH ZONE
Property Deal: Sale Description: Flat 1+1,2+1,3+1,4+1, immediate possession with all facilities in Hoover Apt Burari Delhi-84 Contact: 9911667243, 9891891800 Property Deal: Sale / Lease Description: Vasundhara Delhi sale/rent society ats 1/2/3 B/R in Prayatan City, Mod Fancy, Pavitra, Highland Contact: Banerjee Asso 9811199239 Property Deal: Sale Description: Vaishali Society 1BHK@16L, 2BHK@24L, 3BHK@32L, Builder 1BHK@15L, 2BHK@21L, 3BHK 27L, Contact: 9717077373, 9818160159 Property Deal: Sale Description: Build corner property on Vikas Marg Delhi, 390sq yards with BD, GF, 2nd oor opp Mall & Metro station for sale. Contact: 9811100764 Property Deal: Sale Description: Mayur Vihar PH-1, 4 Bed Room, Drawing Dinning Society at excellent nish. Contact: Kaushik 9811112458

47
July, 09

EAST ZONE
Property Deal: Sale Description: 3 BHK exclusive south facing 1825sq.ft at near Southern Avenue Lake Rd, $ BHK 200sqft at R.B.Ave. Tringular Park Price Rs 85 Lacs Contact: 9331024500 Property Deal: Sale Description: Near Hazra More 3 storied house ground oor tenanted for sale Rs 50 Lac Negotiable 2pm to 5 pm, Contact: 9903460677 Property Deal: Sale Description: 3 BR South facing 3rd oor semi furnished at, No lift covered garage near Menoka Cinema Contact: 983034851/2499071 Property Deal: Sale Description: 2 bedroom at 650 sq.ft with 600sq.ft Terrace going cheap at Behala/Silpara Contact: 9836588655

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JOBS
POST: PROJECT ENGINEER / SITE ENGINEER
Company: Al Shirawi Group Prole: Degree/Diploma in Civil Engineering, Minimum 3 years experience in fast track projects of turnkey interiors, ceilings and partition jobs. Excellent project planning and execution skills Location: Dubai/ UAE Contact Person: Mr. Selby Chacko Email: hrd@alshirawi.ae

POST: PROJECT MANAGER

Company: Allied Real Estate Prole: UG - B.Tech/B.E. - Civil PG - Any PG Course - Any Specialization, Post Graduation Location: Oman Experience: 12 - 20 Years Contact Person: Narayan Contact No.: 0096-24-582556 Email: abc.group@alliedoman.com, narayan67@gmail.com

POST: PROJECT MARKETING HEAD (REAL ESTATE)

Company: SEAC Ltd., Bhopal. Prole: UG - Any Graduate - Any Specialization PG - MBA/PGDM - Marketing Location: Bhopal, Indore Experience: 2 - 5 Years Contact Person: Dr. Rama Singh/ Ms. Neha Parihar Contact No.: 9329784859,0755-6533192 Email: seacbpl@ymail.com

POST: EXECUTIVE/SR. EXECUTIVE LAND TRANSACTION

Company: Real Gains Estate (P) Ltd. Prole: Candidates from real estate sector having experience of 2-4 years in handling the land transactions for the company required. Should posses good communication and presentation skills. Location: Delhi/NCR, Gurgaon Experience: 2 - 5 Years Email: alpa.jain@realgains.in Website: http://www.realgains.in

POST: STRUCTURAL ENGINEER

Company: Simplex Infrastructures Limited Prole: UG - B.Tech/B.E. - Any Specialization, Civil, Mechanical,Diploma - Any Specialization, PG - Any PG Course - Any Specialization Location: Bengaluru/Bangalore, Cuddalore, Delhi, Delhi/NCR, Gandhinagar Experience: 3 - 8 Years Contact Person: Ms. Riju Chaudhuri Contact No.: 91-33-22528371 Email: riju.chaudhuri@simplexinfra.net Website: http://www.simplexinfrastructures.com

POST: ARCHITECT
Company: Hi-Tech Exports Prole: B.Arch / Diploma (Equivalent to 5year degree course) in Architecture, Prociency with AutoCAD, 3DS Max, -3years of experience in Architecture eld Location: Ahmedabad Experience: 2 - 3 Years Contact Person: Aishwarya Prasad Contact No.: 91-79-40003283 Email: jobs.engg@hitechcaddservices.com Website: http://www.hitechos.com

48
July, 09

POST: SENIOR ENGINEER (ROAD CUM DESIGN)

Company: Multi Core Real Estate Company Prole: Civil Engineer with 10-15yrs experience with design planning background, preferably working with both Consultants & Developers Location: Gurgaon Experience: 10 - 15 Years Contact Person: Mr.Narinder Pal Contact No.: 09876602679 Email: mncplacers@rediffmail.com

POST: ARCHITECT/INTERIOR DESIGNER

Company: SM6 Corp Prole: A qualied candidate with folio consisting of the job description mentioned, Dedicated towards creativity and honesty. Location: Bengaluru/Bangalore Experience: 3 - 5 Years Contact Person: Archana Contact No.: 9945788388 Email: info@sm6corp.com Website: http://www.sm6corp.com

POST: ARABIAN INDUSTRIES LLC

Company: Senior Construction Engineer Prole: Degree / Diploma in Civil Engineering with min. 10 - 15 yrs exp. & ability to deliver projects on time, Graduate in Civil Engineering: Minimum of 10 years (3 years in Oil & Gas), Diploma in Civil Engineering: Minimum of 15 years (5 years in Oil & as) Location: Oman Email: jobs@arabian-industries.net Website: http://www.arabian-industries.com

POST: REAL ESTATE SALES EXECUTIVES

Company: Reex Realty & Financial Consultants Pvt. Ltd Prole: Graduate with relative experience in the eld Location: Mumbai Experience: 0 to 5 Yrs Contact Person: Vipul Shal Contact No.: 22672556 Email: reexrealty.mumbai@gmail.com

POST: V.P REAL ESTATE

Company: BSCPL Infrastructure Limited Prole: Civil Engineering Graduate with MBA Location: Chennai Experience: 15 - 20 Years Contact Person: Mr. Ajit Kumar K Contact No.: 91-40-23304732 Email: http://www.bscpl.net

POST: CONSULTANT/ SR. CONSULATANT

Company: JK Estates Prole: Graduate with good experience Location: Gurgaon (Haryana) Experience: Above 5 years Contact Person: Amit Bhatia Contact No.: 9891057881 Email: info.jkestates@gmail.com

POST: SENIOR INTERIOR DESIGNER / ARCHITECT- RETAIL

Company: Autumn Design Consultants (P) Ltd. Prole: Fluency in software such as AutoCAD, 3dMax. Relevant experience in creating branded environments is required. and degree from Architecture / Interior Design institute is a MUST Location: Delhi/NCR Experience: 2 - 5 Years Contact No.: 0120-4506400 Email: autumnjobs@gmail.com

POST: BUILDING COSTS ANALYST

Company: Homex India Pvt Ltd Prole: Engineering, Architecture, One years work experience in costs, Relative to Budgets, Costs and Projects, Analyse building costs in coordination of the analysis of unit prices for the elaboration of housing budgetsincorporation of budgets in the housing system Location: Delhi, Delhi/NCR Email: Vaishali.sharma@homex.co.in Website: http://Homex.com.mx.

POST: SR. EXECUTIVE & ASST. MGR FOR PROPERTY SALES

Company: Expat Properties(I) Ltd Prole: Good Communication Skills [English must be Excellent], Achieving Sales and Relationship Targets, Good at Inter-personal Relationships Location: Bangalore Contact Person: Leena Sudeepth Contact No.: 91 80 41329132/33, 22372603/4/5 Email: leenas@expat-group.com

POST: MANAGER(CORPORATE COMMUNICATIONS)

Company: Mahima Real Estate Pvt Ltd Pro le:Should be MBA with min 2 years of experience in real estate in marketing department Location: Jaipur Experience: 1 - 3 Years Contact Person: Ms. Supriya Rathore Contact No.: 91-141-4050607 Email: supriya@mahimagroup.org

POST: GENERAL MANAGER (PROJECTS)

Company: Ms Premier Inn India Ltd Pro le:: Degree in Civil Engineering with total experience of at least 12 years, At least 5 years experience in a similar construction role within India, within a budget conscious multi site retailer or leisure or hospitality business. Location: Delhi/NCR Experience: 12 - 22 Years Website: http://global.premierinn.com/in

POST: STRUCTURAL STEEL & FABRICATION ENGINEER

Company: Roan Builders (India) Pvt Ltd. Pro le:BE/Diploma/Civil/Mechanical Experience in Steel Fabrication & Erection Activities. Location: Pune Experience: 5 10 Years Contact No.: 020-41405140 Email: cv@rohanbuilders.com Website: www.rohanbuilders.com

POST: FINANCE HEAD-ONLY REAL ESTATE EXPERIENCE WILL APPLY

Company: MNC Client of AGRIYA TECHNOLOGIES Pro le:CA/ICWA with 12-16 years experience. Preferably worked in Real Estate Industry. Working experience in Oracle is must Location: Delhi Contact Person: MR.KARIMI Contact No.: 011-24321152 Email: karimi@agriyatech.com

POST: BUSINESS DEVELOPMENT MANAGER

Company: iDream Advisory Services Pvt. Ltd. Pro le:2 - 5 years in sourcing projects for corporate interiors and architectural projects. Excellent communication and presentation skills desired Locaton: Mumbai, Pune & Bangalore Contact Person: Bharati Kadam Contact No.: 66951820 Email: resume@idream.in

POST: PLANNING ENGINEERS

Company: Roan Builders (India) Pvt Ltd. Pro le:BE/Diploma-Civil Planning Tools like Primavera Projects Planner, MS Projects, Autocad Locaton: Pune Experience: 5 10 Years Contact No.: 020-41405140 Email: cv@rohanbuilders.com Website: www.rohanbuilders.com

POST: GM PROJECTS, CONSTRUCTION MANAGER, SENIOR PROJECT MANAGER

Company: Utkal Builders Ltd Pro le:Project Manager or Construction Manager with minimum 10 years of rich experience in the development of high rise multi storied buildings in the big real estate companies of India. Location: Bhubaneswar Experience: 10 - 15 Years Contact Person: Sarad Baid Contact No.: 91-674-2543294 Email: sales@utkalbuilders.com Website: http://www.utkalbuilders.com

POST: CIVIL ENGINEER

Company: bebo Technologies Pvt. Ltd. Pro le:BE/B Tech Civil Engineering with 1-2 years exp. in building construction. Go Getter approach towards work and zeal to convert ideas into reality, Excellent comm. skills & a strong team player, Knowledge of MS Projects will be a plus. Location: Chandigarh Experience: 1 - 2 Years Contact Person: Meenu Contact No.: 0172-5079601 Email: chdjobs@bebotechnologies.com Website: http://www.bebotechnologies.com

POST: SITE ENGINEERS AND SITE SUPERVISORS

Company: Mayfair Housing Pvt Ltd Pro le:To identify and nalise suitable contractors with the help of the Chief Engineer. To co-ordinate with the suppliers in time. To implement the ISO standards and procedures as laid by the Chief Engineer and Quality Control Engineer Location: Mumbai Experience: 4 - 9 Years Contact No.: 91-022-67232319 Email: amitj@mayfairhousing.com Website: http://www.mayfairhousing.com

49
July, 09

INTELLIGENCE FOR THE INDIAN REAL ESTATE PROFESSIONAL

Property World - JOBS

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data
Raising capital
Graphic by Yogesh Naik in Rs crore Akruti City GMR Infra HDFC HDIL HCC JSW Steel LIC Housing Proposed Purpose amount 2,500 5,000 4,000 2,837 1,500 4,800 500 Expansion of business Upcoming projects HDFC Bank warrants Debt repayment To retire debt and capex capex and debt repayment mprove CAR & expansion Repay debt & expansion Equity Capital existing dil (%) 66.7 364.1 284 214.3 25.6 248.1 85 31.9 42.7 14.3 3.5 31.8 38.1 30.8 10.5 15.7 Net Sales 673 4,131 10,783 1,719 3,314 15,935 2,829 6,060 % Chg y-o-y 73.5 72.3 33 -27.8 7.5 27.9 34.9 29.3 Net Profit 486 139 2,283 830 125 254 532 137 % Chg y-o-y 84.8 -47 -6.3 -41.1 27.8 -84.5 37.3 55.2 CMP (Rs) 585 159 2,281 257 106 707 570 PE (x) 8 208.1 28.4 8.5 21.7 52 9.1 Debt ^Equity 1 -Market Cap 3,904

1.4 28,976 4 64,910 0.94 3.8 10.7 7,068 2,717 4,841

1.8 13,218

320 44.6 1.3 6,090 Source: Company and analyst estimates Several real estate companies who have borrowed significantly to fund land acquisition and their working capital needs, are looking at raising funds to reduce their debt burden. There are nine real estate companies which have proposed to raise nearly Rs16,000-crore largely to repay debt and to infuse funds towards reviving revenue flows. Note: Dilution in equity is indicative and is based on the current market price (CMP) and the amount proposed to be raised. Also, since the companies have indicated the use of various ( one or more) instruments, the dilution in equity will depend on the type of instrument (s), the timing & pricing as per SEBI formula. ^Debt-equity is as per the latest financial year data available.

Pantaloon Ret 1,000

Commercial real estate exposure Outstanding as on March 2009 (Rs Crore) IndusInd Bank Andhra Bank Dena Bank Oriental Bank of Commerce Indian Oversaes Bank Bank of India SBI Indian Bank Union Bank of India HDFC Bank Syndicate Bank ICICI Bank Axis Bank Bank of Baroda 448 1,829 674 5,648 5,891 7,379 16,940 4,964 3,190 7,099 2,455 14,244 6,090 3,869

Growth (%)* 193 154 123 116 61 42 42 34 33 20 10 4 3 -4

50
July, 09

Fourteen banks, which have released their 2008-09 annual reports, disclosed that their commercial real estate exposure grew by an average 29.1 per cent, even as total credit grew 25 per cent. This growth was more significant for public sector banks; their real estate exposure grew 43 per cent over the year against their credit growth of 29 per cent.

Towering high Share price (Rs) DLF Unitech HDIL Indiabulls Real Estate Brigade Ent Lok Housing Puravankar Akruti City Omaxe Parsvnath Developers Orbit Peninsula land Sobha Developers BSE Realty Index BSE Sensex 27-May-09 365 77 282 204 82 31 98 479 95 95 160 67 193 3517 14110 27-Apr-09 244 43 148 123 51 26 78 360 56 50 57 36 102 2,202 11,372 Change (%) 50 79 91 66 61 19 26 33 70 90 181 86 89 60 24 52-week high/ low 615/124 268/22 768/62 498/82 210/27 132/11 248/26 2,364/326 210/39 210/31 508/38 88/15 523/67

Metros in the making City Market Annual size growth (Rs crore) rate ( %) Thiruvallur, Tamil Nadu 9,141 17 Faridabad, Haryana 9,732 14 Thane Urban, Maharashtra 43,726 13 Vadodara, Gujarat 11,437 13 North 24 Parganas*, West Bengal 21,153 12 Jaipur, Rajasthan 9,287 11 Jamshedpur, Jharkhand 4,366 11 Patna, Bihar 4,208 11 Nagpur, Maharashtra 13,583 10 Asansol, West Bengal 12,384 10 Kanyakumari, Tamil Nadu 5,748 10 Lucknow, Uttar Pradesh 5,539 10 Salem, Tamil Nadu 5,494 10 Kochi, Kerala 4,828 10 Ludhiana, Punjab 7,522 9 Indore, Madhya Pradesh 6,083 9 Madurai, Tamil Nadu 5,499 9 Bhopal, Madhya Pradesh 3,643 9 Kanpur, Uttar Pradesh 6,147 7 Kancheepuram, Tamil Nadu 6,112 na
*urban Source: City Skyline of India, Indicus Analytics Beta cities, in contrast to Alpha top-tier cities are among the largest urban markets and can at anytime break into the elite club. Many of these cities were in the past specializing in a few sectors and industries; but with growing population and large-scale in-migration, they are steadily growing in the range of activities that are undertaken within and in their vicinity.

Investors are gradually showing renewed interest in realty shares. There was an overall change following the installation of a stable government. Expectations over the government coming out with investor friendly policies for roping in foreign investments in the sector, saw investors lapping up realty stocks.

8%

8%

8%

8% 8%

8%

till Offer open th ber 2009 30 Septem valid on te 8% fixed ra e Loans m all new Ho ar 1 for ye

A Home Loan is no more a burden

SBI Home Loans

Interest rate frozen

at

8% p.a.

on daily reducing balance on all new loans

Interest rate, fixed at 8% for 1 year, will be reset after 1 year to regular interest rates contracted on the date of sanction. EMIs for 1st year will be on the basis of 8% interest and EMIs thereafter will be on the basis of regular interest rates.

For more information please call 1800 11 22 11 ( Toll Free from BSNL / MTNL Landline) or 080-26599990 (Other Lines). E-mail contactcentre@sbi.co.in or visit our nearest branch / www.sbi.co.in

*Conditions apply

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