ETA Star to invest 923 Million US$ in chennai

In a bid to tap the growing demand for residential projects in India, ETA Star Property Developers Ltd, a group company of Dubai-based ETA Ascon, has announced to invest USD 923 million to construct an info-tech park in Chennai.
The IT Park, to spread over an area of 100 acres would home leading software companies such as Microsoft, Intel, IBM. Its commercial part will be developed as a part of mega residential project.
This is part of a 350 acre IT Township project which will accommodate residential units spread across 200 acres, says Syed M Salahuddin, managing director, ETA-Ascon Group.
The project will also include 17.5 million square feet for the construction of apartments, row houses, bungalows, shopping arcades, hospitals, schools, hotels, and service apartments.
With this upcoming project, the group’s total property investment in India shoots to Dh16.44 billion so far. The company has introduced its first residential project in Chennai as a part of Dh11 billion investment project in Tamil Nadu.
ETA Star is keenly scouting investment options in India and will narrow down on the best once it gets handful of them, adds Salahuddin.
Another project in the company’s pipeline concerns Jasmine Court residential development. It will commence within next few months offering investors mixed size apartments spread over 4.4 acres of landscaped property in proximity to Chennai International Airport, with an array of facilities including swimming pool, a gym, and a basketball court.

Global Asia Real Estate Fund Concludes Its Third Acquisition

Global continues its golden run in the Asian market. With the announcement of its latest acquisition in the People’s Republic of China, as part of its Asia Real Estate Fund investment strategy, Global Investment house added the third feather in its portfolio of assets.
Global Asia Real Estate Fund had announced the successful closure of two investments; In China and India last month.
Executive Vice President at Global, Mr. Sameer A. Al-Gharaballi, quoted in a statement that the investment will give the fund an excellent opportunity to invest in the development of a mixed usage project consisting of residential and retail space in Changzhou city, China.
He further revealed that the investment is a joint venture with a Chinese real estate development and construction company. He also added that a significant driver of their decision to invest in Changzhou relates to the fact that in recent years, there has been a strong demand in the real estate sector, especially in the residential segment.”
Changzhou city is strategically located in the Yangtze River Delta and it will benefit from the booming economy in the area. The site selected for the construction is easily accessible to all the supporting facilities.
Mr. Rakesh Patnaik, Head of Real Estate Funds at Global, disclosed that the total cost of the project is approximately USD62 million in which the fund is contributing USD11 million as equity into the project.
The fund looks forward to have a strategic stake of 49% in the project, with this equity investment. He also said that the fund is in the process of conducting due diligence of two more transactions situated in India and South Korea. Patnaik expects the fund to be fully invested very soon.
Speaking on the successful acquisition, Helen Wong, CEO of Cushman & Wakefield Capital Asia -the fund advisor- stressed that the fund will benefit from strata-titled sale strategy of the residential and retail units.
The pre-sales of these units is expected to start shortly with complete exit through retail sales by 2010. The expected return to the fund anticipated to be greater than 25% on a gross basis.
It is worth mentioning here that Global Asia Real Estate Fund was offered to investors last year. The Fund specializes in investing in Chinese and Indian Real Estate markets in addition to its ability to invest in other Asian Real Estate Markets.

HOT projects in Chennai

Some of the exciting projects in chennai are
1.DLF Housing’s - GARDEN CITY - OMR Chennai
2.MANTRI - SYNERGY at OMR
3.PURAVANKARA- SWAN LAKE - OMR Chennai
4.OLYMPIA OPALINE - OMR Chennai
5.MARG SWARNABHOOMI -Navaratna Phase 2 ,Cheyyar(near kalpakkam ,chennai)
6.LAKE VIEW GARDEN VILLA ,Sriperambathur (Around 300 Villas )
7.Ready to occupy - CITILIGHTS -MEADOWS ,Nolambur (Mogappair ,Chennai)

Unitech to invest 700 Million US$ in Singapore Stock Exchange

Unitech, a big name in the Indian Real Estate Industry has won regulatory approval to raise $700 million through a public offer in the Singapore Stock Exchange. Unitech will list its subsidiary in Singapore as Unitech Office Trust (UOT), a real estate investment trust (REIT).
Banking majors like Deutsche Bank, Lehman Brothers, JP Morgan and UBS have been appointed as bankers for the proposed offering. The fund raising process is likely to be complete by March 2008. The company also plans to raise $1-1.5 billion through the QIP route, which is expected to be closed by the end of this month.
The Unitech Singapore REIT will acquire some of the IT parks and SEZ projects of the company in India, which are under-construction. According to industry sources six IT Park and SEZ projects being developed by the company will initially offer three to the REIT. A reliable source revealed that these will have a combined leasable area of about 10 million sq ft.
The company has already divested 60% of its stake in the six IT parks and SEZs to another subsidiary, Unitech Corporate Parks (UCP). UCP had raised about Rs 3,000 crore from the London Stock Exchange’s Alternative Investments Market (AIM) in December last year.
As told by Unitech executive, the company is working with the clear strategy of monetising its stake in commercial properties just before construction is started and recycling the capital for future land acquisitions and developments.
Following Unitech are biggies like DLF, touted as the countries largest real estate company DLF is awaiting regulatory approvals to raise $2-2.5 billion from the Singapore market, for listing its subsidiary DLF Office Trust.
Real estate in the country is already attracting investments from Singapore-based companies. Recently, Singapore-based developer Ascendas, raised a REIT of about $500 million to invest in the Indian commercial real estate market.
It has already invested in four IT park projects in India: Maharashtra, Chennai, Bangalore and Hyderabad. CapitaLand is another Singapore-based REIT with an India focus, and has invested $ 100 million in a residential project in Mumbai.
Operations of a REIT in the property market is similar to what mutual funds provide on stock investments. Last year, market regulator Sebi had made a policy announcement regarding real estate mutual funds in India. However, the policy is yet to be notified.

Chennai Retail Sector Set to Boom

Mall culture in Chennai is all set to exert its full allure, with over 20 glitzy shopping malls planned to come up in the next three years. Some notable upcoming retail projects in the city are to be introduced by reputed builders such as DLF, Shriram Properties, and Prestige Group.
Bangalore based Prestige Group has plans to build a second Forum mall in the city’s artery, Mount Road. The group has recently completed a Forum Mall at Vadapalani in Chennai, in a joint venture with Vijaya Group. Spread over 17 lakh square feet, the mall involves an investment of Rs 350 crore.
Surprisingly, the trend of retail development has overtaken other developments especially the feverish activity of developing residential projects. This has pushed the demand for retail space in areas such as Besant Nagar, Aminjikaral, Velachery, Mogappair, Sirusseri, Semmenchery, and Perambur.
Allied Housing & Development, a prominent real estate developer, is planning a seven lakh square feet shopping mall at Siruseri in Chennai. Following in same footsteps, Ozone Group also has plans to come up with an exclusive 14 lakh square feet shopping mall at its integrated township Metro Zone in Anna Nagar.

Rentals for office space in Chennai are soaring high. The shopping malls in Chennai are entirely dedicated to retail spaces, but the developers are in a look out for the demand to grow.
Marg Constructions will soon develop a jumbo mall at Karapakkam near Chennai. It will have 11 lakh square feet of built up space, including a large packing area. To be develop at an investment of Rs 500 crore, the mall is scheduled to be complete by 2008-end. The company will invest Rs 50 crore, and is searching for potential investors to raise Rs 100 crore. It will raise the remaining money through a mix of debt and equity.

CHENNAI RATES/SQ FT

Chennai Properties Rates
Location Residential (Rs/Sqft)
Adyar 4500 - 8000
Alwarpet 8500 - 15000
Besant Nagar 7000 -14000
Chetpur / Kilpauk 6000 - 7000
K. K Nagar 4500 - 5500
Tiruvanmiyur 4000 - 6000
Mylai 8000 -12000
T. Nagar 5000 - 7000
Kodambakkam 4000 - 6000
Raja Annamalipuram 8000 - 10000
Royapettah 4500 - 7200
Egmore 5000 - 6000
Valasaravkkam 4500 - 6000
Anna Nagar (East) 5000 - 7000
Guindy 4000 - 5000
Velacherry 5000 - 7000
Shastri Nagar 5000 - 8000
Ashok Nagar 5000 - 8500
Lloyds Road 4500 - 5500
Radhakrishnan Road 7000 - 10000
Nungambakkam 8000 -14000

Note : The rates mentioned above are taken according to survey by A.C .Nielsen.The rates will change according to the demand and supply mode

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US based Walton Street Capital to invest Rs 1,000 crore in Indian realty

The US-based hospitality and real estate fund Walton Street Capital (WSC) has decided to invest Rs 1,000 crore in the booming Indian real estate market in 2008. It has already tied up with property developers for investing Rs 600 crore at the project level. These investments will be made in special purpose vehicles (SPV) floated specially to implement projects. The fund is in talks with three Indian developers for the remaining investments, which is expected in a couple of months, said WSC managing director Sourav Goswami. Last year, the $13 billion Chicago-based WSC invested about Rs 800 crore in several SPVs, including 20% in Shriram Properties. The fund has invested in retail malls, office buildings, housing and hospitality. Though the real estate sector seems less attractive for investments because of the high interest rates and fall in sales, Mr Goswami said India’s growth story will continue like this, which in turn will help the infrastructure and real estate sectors. Foreign and domestic funds poured $6.8 billion in the real estate and infrastructure sector last year, compared with about $3.5 billion in the previous year. A booming housing sector and surging demand for commercial property has companies guzzling equity and sometimes even debt money provided by the funds. Funds are likely to play a major role as bearishness surrounding the IPO market forces companies to seek private equity money. For increasing the India investments, the US-based parent company is thinking of floating a separate fund. “We are keen to invest in India owing to the consistent growth in real estate sector. At this point, it is logical to float an India-dedicated fund for investments. However, nothing has been finalised,” said Mr Goswami. Real estate funds have poured money into several such projects. The US-based global fund has received equity commitments of $3.5 billion from public and corporate pension funds, foreign institutions, insurance companies and banks, endowments and foundations, trusts and high net worth individuals. It has committed to invest in 162 deals in the global real estate, including the development and acquisition of office, hotel, retail, industrial, multi-family, for-sale residential, senior and student housing, and golf assets.through both individual, portfolio and company-level transactions with a gross asset cost of $14 billion. “The US subprime crisis has affected fund raising from the US and Europe. But it is not a long-term problem. Generally, when we underwrite a transaction, we include the cost of hedging and potential currency leakage. Thus currency fluctuations has never been a serious issue for Walton. India is a growing economy, so there is no question of steep fall in real estate prices. The Indian developers are more open to partnering with private equity investors on reasonable terms,” said Mr Goswami. The year 2007 was the banner year for Indian real estate with estimates of over $5 billion of foreign funds flowing into projects. Another theme for the year was public offerings. With DLF listing, which energised the market, several developers proceeded to go public in India, creating a robust market for retail investors, said industry analysts. “ The picture has never been murkier in 2008. With fears of a looming US recession putting the brakes on global growth and its resultant liquidity, a choppy market seems to be ahead. For fund managers, some will view the turbulence as an indication to restrain investing in historically volatile emerging markets. Others will view it as an opportunity to deploy equity into Indian markets which is still buoyant,” said Mr Goswami.WSC, in joint venture with Shriram Properties and Starwood Capital Group, is developing a Rs 5,000 crore integrated township in Kolkata.

Exodus boosts Pune realty prices

The building sector in Pune and neighbouring areas is in dire straits. The mass exodus of migrant workers from UP and Bihar, following alleged threats from Raj Thackeray’s Maharashtra Navnirman Sena, has forced builders to invoke the force majeure clause to escape liabilities of delays and cost overruns. With the labour rates in the building industry almost trebling due to insufficient workers and absence of skilled employees, buyers will have to shell out more for their flats. “We have informed our customers that there will be a delay in the delivery of flats due to this force majeure situation,” said Gera Developers chairman Kumar Gera. “We can’t say when the sub-contractor’s labour will be back, when normalcy will return or when flats will be ready,” added Mr Gera, who is also the founder chairman of the Confederation of Real Estate Developers Association of India. “The number of labourers on our project sites has come down from 2,300 to 1,400 now. This has resulted in a 75% slowdown in construction,” he explained. A force majeure clause in a contract excuses a party from not performing its contractual obligations due to unforeseen events beyond its control. Kumar Builders chairman and president of the Promoters and Builders Association of Pune (PBAP) Lalit Kumar Jain said that the labour rates have shot up by 250% to Rs 750 a day. This means that it is only a matter of time before prices of residential properties go up as builders pass on this hike to the buyers. “We believe that 50% of labourers have gone back and labour rates have surged from Rs 350 a day to Rs 750. We are not even sure if the labourers will come back,” Mr Jain said. He added that builders have sent people to Bihar and UP to try and force the labourers return to work, but the response so far has been poor. “The Builders Association will wait till the end of March and assess the situation. The members will then take a decision on informing their customers about the possible rate hike,” he added. Some builders said they were trying to get labourers from the neighbouring Karnataka and Andhra Pradesh, but both Mr Gera and Mr Jain said the plan may not work.

Real estate bid sets new record in Noida

bid worth Rs.50 billion for a single commercial plot in Noida seems to have set a new real estate record Tuesday. BPTP, a real estate developer, shattered past records for a single bid for a commercial plot measuring 95 acres, situated in sector-94 here. According to an official communication, the New Okhla Industrial Development Authority (NOIDA) floated auction bids for the plot in February 2008. It received four bids and March 03, 2008, the bids were assigned to a consultant to study the technical feasibility and financial viability of the bids. The consultant submitted its report to the authority in which one of the bidders Ansal (API) was disqualified. The remaining three bidders - Omaxe, DLF and BPTP - were qualified.

Citi, Merrill likely to invest Rs 2000 cr in DLF realty

Global financial firms Citigroup, Merrill Lynch and DE Shaw are likely to invest Rs 2,000 crore or $500 million in the DLF Assets’(DAL) real estate investment trust(REIT), according to sources. The transaction is likely to be completed by early next week. Part of DLF Group, the largest real estate developer in the country, DAL is focused on buying and managing office space. Currently, DAL is a owned by DLF promoters and the listed firm has no equity stake in this firm. However, as per the plan, DLF will also invest $750 million or Rs 3,000 crore in the REIT. DAL had earlier planned to list the REIT, but now is going for a private placement. DLF spokesperson declined to comment saying that the Singapore market regulation didn’t allow company to make any comment on the issue as its application for listing of REIT was still being scrutinised by the authorities. DLF Assets originally planned to raise $2 billion through its REIT called DLF Office Trust. Given the downturn in the global financial markets, DAL has now put on hold its plan to list the REIT. In the meanwhile, it is going ahead with its fund-raising plan through the private-placement route. According to sources, DLF Office Trust will now be a private trust, raising money only through institutional investors. A private trust, unlike a public trust, is not listed and doesn’t have retail participation. DLF had originally planned to have 10% retail investors in its REIT