IHC To Spend One Billion Dollar On Buying Hotels

Indian Hospitality Corporation (IHC), a joint venture of Gordon House Hotels, Mars Restaurant and SkyGourmet Catering formed last year, plans to spend as much as $1 billion to acquire hotel groups and restaurant chains.

The company has hired Ravi Deol as chairman and chief executive of Mars Restaurants, the hotel and food services division of IHC, to initate acquisitions. Deol is the former managing director of Barista and ex-chief executive of FieldFresh Foods.

Mr. Deol told, “We are looking to add 2,000 hotel rooms across 17 cities, including metros and towns such as Lucknow, Amrtisar, Raipur, Chandigarh among others. We may acquire hotel groups having 5-7 properties. We are also looking at acquiring restaurants or restaurant chains and then take them to the leadership position”.

All these acquisitions will be done by Mars Restaurant. Mr. Deol said”We may go for a rebranding of an existing hotel chain as and when we acquire them”.

IHC has formed a $200-million ‘hospitality opportunity fund’ and $220 million worth of warrants to be converted into equity. The balance amount will be raised by selling equity or through borrowings.

Mars Restaurants has brands Such as Tendulkars’ (a 50:50 joint venture with cricketer Sachin Tendulkar), China Joe, The Pizzeria, Dosa Diner among others, while Gordon House is a venture of Mars Restaurants and currently has three properties in Mumbai and Pune. The acquisitions will add to the portfolio of Gordon House hotels.

The Indian leisure and hospitality industry is set for high growth, according to the World Travel and Tourism Council. According to industry estimates, the Indian hotel and hospitality industry generates foreign exchange earnings of Rs 35,000 crore each year in addition to Rs 10,000-12,000 crore generated from Indian customers.

The market size of branded fast-food and dine-in restaurants is estimated at over Rs 600 crore. This segment is grwoing in double digits annually attracting players like IHC.

According to sources, popular north Indian restaurant chain Nirulas along with Clarks hotel chain may be on the radar of IHC for acquisition and subsequent re-branding.

On the air-catering front, IHC is looking to expand SkyGourmet to 11 cities from six metros at present. SkyGourment will soon set up its air catering facilities in Kochi, Jaipur and Amritsar among other cities.

Mr. Deol said, “We will also expand our air catering services globally when Kingfisher goes international. We are already catering for Jet Airways, Kingfisher Airlines, Air India Express, Indian Airlines, Malaysian Airlines and Air France. We are looking at providing catering to Emirates and Lufthansa too”. Sky Gourmet was incorporated in 2002 and is headquartered in Mumbai and employs about 1150 people.

Country Club Acquire Properties In Tier-II Cities

Country Club India (CCIL) has pronounced the getting hold of properties in Tier II cities. Driven by its focus on pan India presence, CCIL has added Lucknow, Jaipur, Indore, Surat and Pune to its fold taking the total to forty four own clubs in the two hundred two club network including franchisees.
Y. Rajeev Reddy, Chairman and Managing Director, CCIL, told on 11th June that plans were on the anvil to invest one hundred crore rupees in Gujarat and Madhya Pradesh to strengthen its functions. Elaborating on CCIL’s development plans abroad, Mr. Reddy said the acquisition of Chelsea Hotel (now re-christened Country Club Dubai) was a significant part of its one thousand one thousand crore rupees strategic expansion plan in the next three years.
The Dubai property, acquired at a cost of One hundred seventy five crore rupees, was fully operational, he said. CIIL had made its foray into satellite clubbing under its brand Country Klub 2007 (CK 27), a concept for intra-city penetration. The first one, developed over forty thousand sq. ft. in Surat, was already operational. A 2nd such club in Koramangala (Bangalore) has been announced. The company has also initiated a global card which entitles members to a host of privileges at the newly purchased Country Club Hotel in Dubai and other CCIL properties. CIIL has initiated a project in association with Kairali Group for medical tourism and has lined up more similar projects

Houses On Rent In Chandigarh

Chandigarh is a city with plenty of options available as per the rental market is concerned. The real estate trade has scaled new heights and to attain the break-even to the supply side. Chandigarh is one of well developed cities in India. As a result purchase of an own house to a common man has become a costly affair. This scenario aids the rental market in the city which is already on an upswing. Since this city is capital for both the states of Punjab and Haryana, many people would prefer Chandigarh as the destination for self-upliftment. Many prestigious educational institutions are also present here. Many parents, for sake of better education for their children are now shifting to Chandigarh. All these people need space to live in which again is providing a great feed back to the rental market.

The city of Chandigarh also has accounted well on the feed back and is equipping itself with surplus rental properties. Many flats or apartments have come up in the recent times only to provide rental service. Also many upcoming ventures are slated to serve the same purpose. In the interior of the city, many properties have undergone lucrative face lifts and appealing for better rental options. The range of rental homes starts from single bedroom flats to independent luxurious bungalows or villas. Each range of accommodation is planned to meet a certain budget and expectations. One can go around the city and choose a house on rent which is apt for his budget, requirement and lifestyle. Some builders have taken up the business of undertaking or constructing residential properties so as to lend them on lease or on rent. With so many options one might not be able to decide on which house and locality, he wishes to stay. Then an expert who takes care of rental formalities and also helps the person in finding best value for his money is much needed. Many websites are providing this brokerage service for minimal commissions which solve the problem to a great extent.

DLF, Parsvnath & Unitech line up for affordable housing in Punjab

Leading real estate players together with DLF, Parsvnath, Omaxe, TDI, Ansals and Unitech have shown interest in joining hands with the Punjab government in its bid to provide ‘reasonable houses costing not more than One lakh rupees each’ in the state.
Real estate and infrastructure players who attended a conference with Punjab chief minister Parkash Singh Badal on 12th June to come out with ‘real plans for houses for all scheme. The meeting were attended by several top level management members of Companies like Ambuja cement, Ansal API, DLF and many other.
Badal in the meeting said that the state government’s will give its proper support to the corporate sector for a joint bid to provide every poor and needy person a roof over his head in the state. The real estate developers had come together for the interactive meeting organized by National Real Estate Development Council (NAREDCO).
The chief minister pronounced the creation of a separate ‘state shelter fund’ to be used completely for the construction of economically weaker section (EWS) houses by the Punjab Urban Planning and Development Authority (PUDA). All urban development authorities will contribute fifty percent of the license fee collection to the fund. Having an interaction with the stakeholders in coordination with NARDECO prior to freezing the policy on ‘affordable housing for all’, Badal listed a no. of path breaking actions taken in the housing and urban development.

World's Tallest Building Waiting For Finishing Touch

Construction of the world’s tallest building, the Burj Dubai, has been delayed and will be completed only in September next year, the developer was quoted on Tuesday.

The tower, which is expected to reach a final height of 900 meters (2,953 feet), was due for completion in the bustling city state at the end of 2008.

Developer Emaar said, “The luxury finishes that were decided on in 2004, when the tower was initially conceptualized, are now being replaced by upgraded finishes” .

The Burj Dubai had already become the tallest man-made structure on the planet, when Emaar announced in April that it has surpassed the 629 meter (2,063-foot) KVLY-TV mast in the United States.

Many building projects in Dubai, which are going through a construction frenzy, have been facing delays caused by shortage of building materials and skilled labour.

Four Premium Residential Project In Pune By Sahil Group

City-based Sahil Group is all set to strengthen its base in construction and hospitality business and has moved a step ahead in both the segments.
It recently unveiled its premium housing project ‘Sahil Sarvadaa’ at Kondhwa.
Based on the concept of stress free homes, the project has been equipped with all the amenities that can contribute towards making your life stress free. Its rejuvenation centre has swimming pool, yoga and meditation room, steam room and an open garden. The possession ceremony of the same was held recently.
Currently Sahil Group has undertaken construction of over 5 lakh square feet mainly comprising residential projects in the city These are 4 premium residential projects in Pune in the areas like Baner, Erandwane, Bavdhan and Kondhwa.
In the current financial year the Group would be undertaking construction of another 15 lakh square feet, which will comprise residential, hospitality and retail spaces. These new projects will come up in Pune and Kandivali, Mumbai. The estimated project cost of the real estate projects being set up by Sahil Group is around Rs.600 crore. In the hospitality business Sahil Group has so far invested Rs.200 crores in setting up two properties at Lonavala and Alibaug. It recently unveiled its five star category Resort and Spa in Alibaug. Radisson Resort and Spa at Alibaug has two strategic operators, it is being managed by Carlson Hotels Worldwide. The Spa here is being managed by Mandara Spa from the MSpa International Thailand. This spa holds the distinction of being the largest spa property in the country having 16 private spa pavilions surrounded by beautifully landscaped gardens and clear blue waters.
Under the expansion plan of hospitality business Sahil Group is planning to set up a 250 rooms five start business hotel at Balewadi with an investment of Rs.250 crore.

Ruchi Group Will Construct 796 Luxury Apartments In Kolkata

Ruchi Realty Holdings Pvt Ltd, a business enterprise of the city-based Ruchi group of industries, has embarked on a four hundred fifty crore rupees real estate project for construction of seven hundred ninety six luxury apartments in Kolkata.
Ruchi Realty Vice-President S. Asthana said no 10th june that the project would have the first Sports-based residential condominium here and other exclusive facilities in six towers on seventeen acre on the E M Bypass.
The project’s initial work had started and was projected to be finished by December, 2010.
The highest price of an apartment has been priced at rupees one crore, he said.
Asthana told that other real estate projects undertaken by the company were integrated townships in Bhopal and Indore, in addition residential apartments in Mumbai and business hotels in Bhubaneswar, Jamshedpur and Indore.

Real Estate Moves Towards Green Building Concept

As new government policies drive progress towards addressing climate change and other key environmental issues, the real estate markets around Asia and the world will change its look quickly and adopt green building concept, both in developing new buildings and improving existing ones.

This transformation will be driven by various combinations of regulation, government incentives and changing market dynamics.

House Renter will also help drive the Green Real Estate growth through their corporate social responsibility programs, desire to attract and retain quality employees and aspiration to improve. India currently has about twenty-six built green buildings covering close to eleven million square feet. Presently, more than two hundred buildings have registered themselves to obtain a green certificate. Mumbai is leading with fifty-one buildings, followed by Chennai at thirty-five. Bangalore has close to twelve buildings registered for certification. The green market in India started with the developed world and now it is shifting to India. The growth in green buildings is largely driven by occupiers.

Green buildings may have an initial cost of its construction as compared to conventional buildings, but in the long run these buildings could save up to 40-80% of energy cost. The energy requirements of some well designed green buildings around the world was as low as 15% than that of a conventional building.

BPTP Pays Rs 1000 Crore For Noida Project

Real estate developer BPTP Group has paid Rs 1000 crore to the Noida authorities as the first instalment for its ambitious 95-acre project.

The privately held developer said that the rest of the payment, of Rs 250 crore, would be made very soon.

DNA Money had last week reported about BPTP making the payment early this week.

Asked for the funding details, Mr. Sudhanshu Tripathi, director, BPTP told DNA Money, “We have not hived off any stake in the Noida project as of now.”

According to him, BPTP has used its internal accruals and the investments received from private equity investors in the past for other projects to make the payment.

In April, Citi Property Investors had invested about $160 million (Rs 640 crore), in the group for a 40% stake in the latter’s special economic zone projects.

BPTP had outbid realty majors DLF and Omaxe to bag the Noida project in March, involving a total land acquisition cost of around Rs 5000 crore.

BPTP was dangerously close to the extended deadline of June 13 for the first instalment.

Failure to honour the deadline could have led to the deal being cancelled, officials in the Noida authority said.

BPTP sought an extension to pay the first instalment after the foreign banks from which it had arranged loans didn’t honour their commitment, Credit Suisse analyst Anand Agarwal wrote in a note.

Many realtors are facing the challenge of raising funds for their projects, given the current downward spiral in the real estate market and the negative sentiment thereon.

Suman Memami, research analyst at Religare Securities, added that liquidity crunch is causing builders to postpone new launches and also private equity players are in a “wait & watch mode.”

The construction cost of the financial city planned will be around Rs 3,000 crore and the total cost of the project is expected to be around Rs 9,000 crore.

BPTP expects office rentals in Noida to be more than its rival city Gurgaon upon completion.

BPTP Pays Rs 1000 Crore For Noida Project

Real estate developer BPTP Group has paid Rs 1000 crore to the Noida authorities as the first instalment for its ambitious 95-acre project.

The privately held developer said that the rest of the payment, of Rs 250 crore, would be made very soon.

DNA Money had last week reported about BPTP making the payment early this week.

Asked for the funding details, Mr. Sudhanshu Tripathi, director, BPTP told DNA Money, “We have not hived off any stake in the Noida project as of now.”

According to him, BPTP has used its internal accruals and the investments received from private equity investors in the past for other projects to make the payment.

In April, Citi Property Investors had invested about $160 million (Rs 640 crore), in the group for a 40% stake in the latter’s special economic zone projects.

BPTP had outbid realty majors DLF and Omaxe to bag the Noida project in March, involving a total land acquisition cost of around Rs 5000 crore.

BPTP was dangerously close to the extended deadline of June 13 for the first instalment.

Failure to honour the deadline could have led to the deal being cancelled, officials in the Noida authority said.

BPTP sought an extension to pay the first instalment after the foreign banks from which it had arranged loans didn’t honour their commitment, Credit Suisse analyst Anand Agarwal wrote in a note.

Many realtors are facing the challenge of raising funds for their projects, given the current downward spiral in the real estate market and the negative sentiment thereon.

Suman Memami, research analyst at Religare Securities, added that liquidity crunch is causing builders to postpone new launches and also private equity players are in a “wait & watch mode.”

The construction cost of the financial city planned will be around Rs 3,000 crore and the total cost of the project is expected to be around Rs 9,000 crore.

BPTP expects office rentals in Noida to be more than its rival city Gurgaon upon completion.

6,000 DDA Flats For Middle And Low Income Group

For those who felt owning a house in Delhi was a distant dream, there is now a glimmer of hope. After a gap of nearly two years, Delhi Development Authority is set to offer 6,000 flats for middle and low-income groups in areas like Dwarka, Vasant Kunj, Rohini, Narela and Shalimar Bagh.

The DDA offer, set to come up in the next two months, is certainly not enough to satisfy the huge demand for a flat in Delhi. Still, for 6,000 lucky ones it will be the big opportunity of not having to shift out to the suburbs.

Although these flats will cost more than in the past, the rates will be much less than those charged by private builders. As such, there are bound to be many more applications than 6,000, and the eventual allottees would be selected, as always, through lottery.

More than 2 lakh people applied for 3,000 flats when DDA last offered a new scheme in 2006. Clearly, this time too, supply will far outstrip demand.

The scheme aims to allot two- and one-bedroom apartments. ‘‘DDA is finalizing modalities for the new scheme. The agency is likely to invite applications within two months,” said a senior DDA official.

The fresh infusion, officials feel, will bring about a modicum of stability in localities where housing prices have rocketed of late. DDA flats in localities like Vasant Kunj command prices close to Rs 1 crore with their interiors completely redesigned by owners.

Software For The Real Estate Industry

Bangalore-based In4velocity Systems, India’s foremost real estate and property development software firm, pronounced that Mumbai-based Kanakia Spaces, a well-known name in the real estate industry, has successfully implemented its market leading ERMS application, In4Suite, across its different construction projects over the period of six months. The overall deal value is expected to be above one lakh dollar.
In4velocity’s unique Enterprise Resource Management System (ERMS) application, In4Suite, is India’s biggest selling and the only integrated end-to-end solution for real estate and property development firms. One can computerize the business processes right from land acquirement to engineering, from purchase to sales and from rental to property management.

The EAAP Directory 2008

The Eaap Directory 2008 - published by the Estate Agents Association of Pune - was released previous week by Mayor Rajlaxmi Bhosle, Police Commissioner Jayant Umranikar and PBAB president Lalit Kumar Jain at a glittering ceremony held at the Corinthians Club.
Describing the highlight of EAAP Directory 2008, Official, said, “The EAAP Directory 2008 would not only act as ready reckoner for the individuals and organizations related to real estate industry but will also prove to be very useful for buyers and sellers of the property.”
The directory has a database of registration offices in and around Pune, contact details of the all the members of the EAAP, useful tips while buying and selling the property along with some valuable articles contributed by the veterans from the industry.
One of the most important sections of the EAAP Directory 2008 is the legal section, which provides vital information about guidelines about service tax, title verification, capital gain, information about stamp act and technicalities involved in leasing properties and valuation. The directory would be available at all the leading bookstores in the city and the EAAP office.
Speaking on the occasion, Umranikar urged the real estate fraternity to incorporate the elements security in everything that they build. He also made a suggestion to PMC to have security features as a part of D.P.
The mayor appreciated the contribution of the real estate industry in the growth of Pune city and also the contribution of the real estate agents in assisting the property buyers in finding the property of their choice and budget.
Andrew Pinto from EAAP made the welcome remarks and Sameera Singh played the anchor for the evening. Film actress Sonali Kulkarni enthralled the crowd with her dance sequences.
The Estate Agents Association of Pune was formed in 1986. The objective of the EAAP is to promote the ethical business practices in the real estate industry of Pune. Today it has over 200 members again the largest in the country.

DLF Hopeful About Dankuni Project

Despite of doubt over the fortune of the township project at Dankuni, real estate major DLF, in charge of executing the project, is hopeful of going ahead with it. According to DLF officials responsible for the Dankuni project, “The company remains committed to the project. The government has not briefed DLF about any of its strategy about the township, after the minister’s comment.”

However, any decision to hang up the project would not only be a huge loss to DLF, but to West Bengal as well, because the project was assigned to the company through a global tender, after assessing its commercial viability, said the official.
The process of land purchase at Dankuni had been postponed for now as the elected representatives on the land procurement committee, after the panchayat elections, were all members of the opposition Trinamul Congress and opposed to the project.

Besides, they were yet to assume their office, according to sources at the Kolkata Metropolitan Development Authority (KMDA).

KMDA sources claimed it had also not received any intimation from the state urban development department in this matter, though it was under the departmental minister A. Bhattacharya who announced the cancellation of the land purchase proposal for the project.

In this situation, DLF did not expect to begin work at the proposed township, which is now running 6 months behind schedule, within 2008, confirmed company officials.

While nervousness has been simmering at the location of township for quite some time, the controversy surfaced recently, when the state urban development minister A. Bhattacharya said the government would not do any purchase of land, thereby stalling project in Dankuni.
He said land purchase was against the will of the opposition parties and landowners in the area.

The thirty three thousand crore rupees township project, spread over four thousand eight hundred forty acres of land, was one of the biggest public private partnership projects in the country.

Of the total project area, seven hundred seventy one acres had been allotted for industry.

Textile, food processing and engineering industries were to come up the earmarked industrial area.

Around one thousand eight hundred seventy two acres had been reserved for housing projects.

Slowdown In Realty Advertising

If you thought that only the real estate values are witnessing a dip, think twice. Even the advertising industry is also feeling the realty heat.

According to industry sources, it is estimated that all major developers such as DLF, Omaxe, Ansals and Parsvnath have decided to cut down on their advertising budgets by around 5 percent. The advertising industry in India is estimated at Rs 10,000 crore.

While analysts attribute this trend to dampening spirits of potential buyers, real estate companies prefer to call this a reality check on their advertising budgets. A report from Adex India, a division of TAM Media Research, shows that the share of real estate advertisements in print media saw a drop of 2 percent during 2007 compared to 2006. According to Adex, the share of real estate advertisement in overall print and TV advertising last year was 4 percent and 1 percent, respectively.

According to S K Sayal CEO, Alpha G Corp: “Infrastructure and real estate companies have primarily been responsible for the advertising industry sustaining its double-digit growth rate. However, in general, companies and brands have been increasing their expenditure on advertising. But a recent dip in the realty sector has made things worse for the advertising industry. Many real estate companies, this fiscal, have cut down on their advertising budgets.”

The Adex report indicates that the top 10 advertisers shared an aggregate of 16 percent of overall ad volumes of real estate advertising in print during 2007. The list include names such as DLF Group, Parsvnath, Sahara, HDIL and Omaxe group. However, the real estate had maximum share in South India publications followed by North and West publications with 32% and 26% share, respectively, during 2007.

“This is because all real estate companies want a national footprint. Also, these companies are now turning professional. They’re setting standards when it comes to managing their A2S (advertising to sales) ratio,” says Jagdeep Kapur, CMD, Samsika Marketing Consultants.

Indiabulls Extend The Closing Date Of The Issue By One Day

Laxmi Mittal-backed Indiabulls Real Estate managed to raise $259 million on the Singapore Stock Exchange, a day after the scheduled closing of its REIT’s issue, Indiabulls Properties Investment Trust.

India’s fourth largest real estate developer sold 353 million shares at $1 per unit, out of which Lakshmi Mittal had committed 91 million shares.

The sale was to realize $278 million. The issue, which was to close on June 5, 2008, was delayed by a day on account of it being under subscribed.

If market experts are to be believed, weak sentiment across the global real estate market led to under subscription of the retail portion. A minimum of 1,000 investors need to subscribe to successfully close an issue.

The issue was subscribed by only 700 investors on June 5. Following this, the company decided to extend the closing date of the issue. However, when contacted, Gagan Banga, the group spokesperson for Indiabulls, said a delay in getting regulatory approval forced Indiabulls to extend subscription process for retail investors by a day.

Alok Ind Resumes Talks To Sell 20% In Realty Arm To PEs

Alok Industries, the Rs 2,200-crore Mumbai-based textile firm, has resumed talks with private equity players to dilute about 20 percent equity it owns in its unlisted unit, Alok Infrastructure. A realty company, Alok Infrastructure has been looking at options to raise around Rs 600 crore for developing its large land bank, said sources.

Alok Industries plans to sell part of its stake in its realty unit to 3-4 private equity firms by August end. The company’s chief financial officer Sunil Khandelwal is currently in the UK for negotiations on this issue.
“We are working out different options and strategies for our realty venture and something will happen before August. I am not in a position to divulge anything more now,” he told ET from London. Ernst & Young is advising Alok Industries on the equity dilution in Alok Infrastructure.

Alok Industries had initiated talks with private equity firms in October last year, but had to discontinue after crashes in the stock markets led to a steep correction in valuations. According to analysts, Alok could be looking at increasing the valuation of the realty company through a private equity deal and subsequently list it.

Alok Infrastructure plans to invest large amounts in real estate development and is also developing over one hundred eighty acres in its textile SEZ in Silvassa. It has already acquired two hundred twenty acres at Silvassa. The company has also acquired one hundred thirty acres at Panvel at the rate of twenty five lakh rupees per acre in a 50-50 joint venture.

According to India Real Estate sector report Global Research, the Indian real estate market is expected to grow at a CAGR of 20 percent, driven by an 18-19 percent growth in residential real estate, 55-60 percent in retail real estate, and 20-22 percent in commercial real estate, over the next five years.

350 Million Pound Project In Nagpur

aAIM India, a division of the real estate equity investor, aAIM Group, on 6th june announced its first investment comprising a 7 million sq. feet mixed-use development. This is the first Foreign Direct Investment (FDI) in an Integrated Township under the Special Township Policy whereby most of the planning decisions are delegated to the development JV.
Located in the city of Nagpur in Central India, the £350mn project comprises 3,000 residences and construction of the first phase is expected to be completed in late 2009. The overall project will span a period of six years. aAIM India is the largest shareholder.
Strong local partners are critical to the success of all real estate development projects in India and aAIM India is delighted to announce that it has entered into a joint venture with Aanya, an entity derived from Soham Real Estate.
Soham has a 25 year track record during which time it has delivered 40 substantial projects including residential townships and commercial premises. Soham has sophisticated systems for delivering projects on time and on budget.
“This is a landmark day for aAIM India. We are very pleased to be partnering with Soham Developers; their consistent track record of success has been a significant factor in our decision to partner with them,” said Anurag Chaturvedi, CEO of aAIM India.
“This is only the second development of its kind in India approved under a new progressive scheme of the Government. The commercial attractiveness of the proposed development along with the strong execution capabilities of our partner should provide investors with confidence in our ability to source opportunities that will continue to offer high risk-adjusted returns.”

Realty Feeling Heat Of Market Meltdown

The real estate sector seems to be at the receiving end of the market meltdown, with the DLF scrip ending below its issue price. For the first time after its listing, the stock of India’s largest real estate developer closed below its issue price of Rs 525 at Rs 519.95.

Although it was closing at all-time lows in the past three trading sessions, it had managed to maintain the issue price. But the final blow came on 6th june when it breached the issue price mark. The BSE Realty index was the second-biggest loser closing 1.83% down.

In fact, only a third of all the real estate IPOs are trading in the positive, others are all below their issue price. The only exceptions were luxury apartment developer Orbit Corporation, which gave a whopping 270% returns, and Akruti City giving 50% returns.

Slum rehabilitation expert HDIL which is trading significantly lower from its 52-week high, however, has managed to sustain some of its returns trading at 30% above its issue price. Developers with a diverse product portfolio and strategically located land bank have been able to sustain the market pressure.

With the looming correction in land prices, there has been uncertainty amongst buyers about the future trend in prices. Besides this, the market mayhem has caused a major blow to high valuations that these companies were commanding. Brigade Enterprises, IVR Prime, Puravankara, Kolte Patil, Omaxe are all quoting at an average 75% below their issue price.

“Inflation numbers breaching previous records, high volatility in the equity market have dented investor confidence in the sector. It is still 3-6 months before the real estate sector revives itself,” says Jones Lang Laselle Meghraj V-P (Consulting) Ashutosh Limaye.

“With crude hovering at $130 a barrel and 10-year G-secs trading at 8.24%, interest rates are expected to harden further. This will have a negative bearing on the real estate sector,” says Mirae Assets Senior Fund Manager Gopal Agrawal.

IEP Hopeful To Raise One Billion Dollar next year

India Equity Partners (IEP), a three hundred million dollar India focused private equity fund, possibly will raise around one billion dollar corpus coming year to invest in India.
“We were going slowly earlier as the equity market was pricey,” said Steven Wisch, the US-based managing partner of IEP. The fund was raised one year and six month ago and so far 40 % has been used in investments in companies like Bharti Infratel, Mannapuram Group of Companies and Hyderabad-based port management company Ocean Sparkle ITD.
“We will raise a significantly higher fund subsequent year,” he said.
India Real Estate Opportunity (IREO) Fund, IEP’s sister concern, invested $1.4 billion out of its $1.6 billion equity in the Indian real estate sector in 2004-2007. IREO was started with a corpus of one hundred fifty million dollar and then moved on to raise $1.1 billion. IEP is planning to raise one billion dollar in the same way.
According to Khanna who is chairman and managing director of the firm”It is an electrifying time for private equity”. “We may finish our existing fund for investment by next year,” he added.
IEP has also brought K K Iyer and Sudarshan Sampathkumar, who were lead partners at Accenture, on board as managing directors.

REIT Road Cracks For Realtors

MUMBAI: It’s second-time unlucky for Indian realtors hoping to garner some desperately needed cash by floating their real estate investment trusts in Singapore.

On 5th june, Indiabulls Real Estate said its plans to float a Reit to mop up $286 million is being extended. Analysts said this was due to very poor response from retail investors.

The Reit had opened on 2nd june and was supposed to close on 5th june but now will close on 6th june following a last-ditch attempt to gather investors.
Ajit Mittal, chief executive officer of Indiabulls Properties, however, said the issue has been oversubscribed.

“We are extending it because merchant bankers said many retail investors from Malaysia, Indonesia and nearby countries want to invest”.

Unitech, India’s No. 2 realtor, had earlier pulled its plan to raise $700 million similarly.
Indiabulls couldn’t sell the mandatory minimum 1,000 units — it managed just one-third of it, which is why it had to extend, a source familiar with the situation said. Indiabulls Properties Investment Trust, the entity floating, had offered an attractive yield of 9.8% on the issue.

But the institutional portion of the issue saw good interest, and was oversubscribed by 1.8 times.

David Lum, an analyst at Daiwa Institute of Research Singapore, said the market conditions are pretty delicate and most issuers are pretty cautious.

The ones that were launched late last year haven’t been doing well. The subprime situation has to be over.”

Indiabulls plans to list its Elphinstone and Jupiter Mills properties in Lower Parel with an area of 3.4 million sq ft.

“We remain apprehensive about Indiabulls’ plans to list its Elphinstone and Jupiter properties in Singapore in the current market conditions,” Sandeep Mathew, an analyst at BNP Paribas India Solutions, said in a note to clients on May 23. “A strong balance sheet indicates that the listing is more of an effort to return cash to promoters.”

Lakshmi Niwas Mittal, steel baron and the world’s richest Indian, is the anchor investor in the issue, having bought 91 million shares. Merrill Lynch and Deutsche Bank AG are the bookrunners of the issue.

ABS Hotels Plans Smart Hotels Project In Eight Cities

ABS Hotels India is all set to launch a budget brand ‘Smart Hotels’ with plans to open it in eight cities within the next two years at an investment of Rs 100 crore. Ashok Aneja, the group’s chairman, informed that the group wants to expand in the budget and resort markets.

“Smart Hotels will come up in Goa, Jaipur, Bengaluru, Pune, Gwalior, Bhopal, Lucknow and Delhi. The properties will be owned and managed by us with no external borrowings whatsoever to fund the projects,” Aneja said.

The company is also planning to grow its resort brand - Roop Hotels & Resorts - with another property lined up at Gir National Park in Gujarat in addition to the existing Roop Resorts in Jim Corbett National Park and Kumaon (Nainital) region. “We expect to tap the resort locations in Uttaranchal, Dehradun and even have Roop Hotels in Bengaluru and Dehradun,” he added.

ABS Hotels India started as a master franchisee of US-based Microtel Inn & Suites for India and has developed three three-star hotels in Bengaluru, Jaipur and Mumbai under the brand. The brand had earlier planned to construct 20 hotels in India but later stalled the plan. ABS Hotels has now grabbed the opportunity to establish its own brand with the same plans that were made with Microtel. “We have the rights on the drawings and plan of the hotels and are taking the project forward,” Aneja stated.

The company owns land banks where it would also be considering developing hotels. It has also ventured into serviced apartments segment with its 42-room Roop Residency coming up in Bengaluru this year with an investment of Rs 20 crore, he summed.

Energy Saving Technology In Siddha Group Project

The West Bengal Green Energy Development Corporation Ltd (WBGEDCL) for the first time has tied-up with the real estate development company Siddha Group for transferring the information about energy saving in its forthcoming studio and serviced apartments project in Rajarhat, called Xanadu.

On 4th June S P Gon Choudhury, managing director of WBGEDCL said that the corporation would charge a insignificant fee for transferring the technology, but in future might was open to pick a equity as low as 2 % in the real estate projects seeking the technology.

S. Jain, joint managing director of the Siddha Group, said out of one hundred twenty apartments in the project, ten or so initially would be equipped with energy saving devices.
In addition to this clean technology, additional feature of this project will be general services like the eating area, club and gym.
Siddha Group would install solar thermal lightning system on a five hundred meter stretch between Xanadu and Siddha Pines, a new residential project by the group in the Rajarhat area.

Other features of the project included use of LED bulbs, solar home lighting system and rain water harvesting.

HNIs Desert Sinking Stocks, Hitch To Realty PMS

Trashing the age-old belief that a fall in equities would result in flattening real estate prices, high net worth investors (HNI) are pushing wealth advisers for more exposure to realty assets.

According to industry sources, the coming months are expected to witness the launch of real estate portfolio management services (PMS) by wealth managers. Though the product is discreetly marketed as real estate PMS, the fund will invest more like a venture capital fund wherein it will invest in live projects and also gain through rentals and space selling.More...

ASK Wealth Advisors CEO Rajesh Saluja said, "Though we have not finalised the product format, our real estate PMS fund will invest across the real estate spectrum. It will be a discretionary portfolio, consisting of pooled money from investors, choosing live projects of unlisted companies as well".

Such investment funds will have a lock-in period of 5-8 years. The minimum ticket size for investment ranges from Rs 25 lakh to Rs 1 crore. Investors have the option to put money in trenches as per the demands of the fund manager.

Mr Saluja added, "We are starting this as an extension of our real estate investment advisory business. With equities losing sheen, our clients are demanding more exposure to real estate projects".

HDFC Asset Management’s PMS division has a similar fund that invests in securities of asset-level special purpose vehicles, holding structures etc across the real estate sector spectrum. The portfolio seeks to attain returns by investing through structured debt, mezzanine funding and innovative equity-linked products as well. The fund does not invest in live projects, as per the product document.

Real estate PMSs differ from private equity funds in their investment style. While private equity funds invest in the whole company, portfolio real estate investments only invest in large projects of a company. Unlike private equity funds, real estate PMSs only has the mandate to invest in real estate projects. They do not invest in sectors outside the real estate domain.

Emkay Shares & Stock Brokers business head Akhilesh Singh said, "The sluggishness in equities market is one reason why such funds are in vogue. If the funds are on the lines of a PMS, it will not be able to invest in live projects because of Sebi restrictions. Though these are marketed as PMS funds, they will be on the lines of venture capital funds”.

'Itz Cards' For House Tax Payers

To help citizens in filing their property tax returns on time to avail themselves of the offered rebates, the Municipal Corporation of Delhi will open 800 additional collection windows across the city.
MCD Standing Committee Chairman Mr. Vijender Gupta said, “A private company is being engaged and will offer tax- payers the option of making payment online at these newly opened windows by using ‘Itz Cards’. The tax-payer can then collect the receipt of the amount paid on the spot after paying ‘convenience charges’ at 2.4%.”More...
Mr. Gupta said even if taxpayer did not want to pay through “Itz Cash Card”, there was a provision for calculation of property tax and issuance of a receipt for a payment of ten rupees. The tax-payer could take this receipt to the nearest prescribed bank or MCD office and make the payment there.
Further he said, “The Company will be providing us bank guarantee and security deposit against the tax amount collected to safeguard the civic body’s revenue. They will be allowed to collect tax up to the limit of the security deposit”.

Sobha Looks Forward For Slum Redevelopment

Sobha Developers, a Bangalore-based realty major focussed on residential space, is looking at diversifying its portfolio through slum redevelopment schemes and special economic zones (SEZs), retail and commercial projects.

Mr. Raghav Menon, Executive director, said that the company would build an SEZ in either Tamil Nadu or Kerala. He said, “We haven’t decided on the place yet. We will also enter retail and commercial project development”.

Mr. Menon said, Sobha is planning projects in Delhi, Hyderabad, Pune, Mysore, Kerala and Orissa. The Mysore project will kick off next month with an investment of hundred crore rupees.

In the next three years, the company has to pay Rs 660-crore loans taken for land acquisition. The developer has a land bank of 4,024 acre, most of which is in Bangalore.

Mr. Menon, however, denied that the company was facing liquidity crunch and said it was self-sufficient. He said, “We are not looking at private equity investment as of now. But we are looking for good projects for joint venture development”.

The executive director added that in the coming months, Sobha had planned investments of nearly Rs 200 crore into the projects.

About 33% of Sobha’s revenues come from its contractual business, under which it is developing 8.32 million square feet including IT parks commissioned by Bangalore-based software giant Infosys.

EIB’s 2nd Fund To Focus On Indian realty

Emirates Islamic Bank (EIB), a leading Islamic financial institution in the region, plans to launch a 2nd fund focused on the Indian real estate market following the doing well closing of its Danat India RIA Fund, the bank said on 3rd june.
The bank said the new fund will add to a growing portfolio of funds aimed at producing wealth for investors in the UAE.
EIB has successfully closed the Dh270 million Danat India RIA fund, which invests in the Indian real estate sector. The bank has paid up to Dh60m and collected Dh210m through subscriptions in the UAE and other GCC countries.
The bank, through the fund, will acquire 77.78 % equity in the Danat RIA Company, which has been established with the principle purpose of acquiring 500 acres of land to develop an integrated middle-income township within the boundaries of New Delhi. Indian investors own the residual stake in the company.
Faisal Aqil, general manager of retail banking at EIB, said the fund – the first EIB fund committed for investment in the Indian real estate sector – could achieve its targeted subscription.
“Construction of the project has already started and the mandate is for three years. However, the EIB has the right to extend the fund’s mandate to four years according to developments in the project.
“The target market of the township will be New Delhi’s growing middle-income population who are seeking more affordable housing opportunities,” he said.

Realty MFs Appears As New Opportunity For Retail Players

The Sebi’s recent decision to allow mutual fund firms to play in realty space has opened up a fresh avenue for individual investors. One month ago, Sebi had approved the inclusion of real estate and issued a set of guidelines. Prior to that, only high networth individuals were allowed to invest in realty directly.

Mr. Jai Mavani, executive director (head real estate), KPMG, said, “Now with realty brought under the MF guidelines, it will be much more transparent and regulated. It will encourage middle category investors to participate in the realty growth story with minimum investment”.

According to KPMG report, the timing is quite opportune as the real estate sector is currently experiencing strong winds from sub-prime bruised western markets, general fund crunch and a pause in the Indian IPO market. Allowing retail participation in real estate mutual funds will enhance liquidity and create a healthy secondary market for realty assets, observe industry analysts.

However, the Sebi guidelines come with certain restrictions. Shailesh Kanani, analyst (infrastructure & real estate), Angel Broking, said, “Since REMFs are allowed to invest only in fully constructed and ready-to-use realty assets, the investors’ ability to participate in significant price appreciation of these assets appears low”.

DLF Township At Dankuni Fate Uncertain

The fate of the prestigious Rs 33,000-crore DLF township at Dankuni has become uncertain.

“The project will not be implemented if the Opposition party and landowners are not ready for it,” urban development minister Asok Bhattacharya said on Tuesday as Trinamool Congress chairperson Mamata Banerjee demanded that the state withdraw the acquisition notice.

The proposed township is one of the largest real estate projects in the country and the company has already shelled out Rs 270 crore to the government. Both residential and industrial, the township covering 4,840 acres is proposed to come up over 10 years.

“People are ready to sell land to those willing to purchase it directly, but not to the government. But we won’t take over or purchase land forcibly. If they are not ready, then the project will not happen. We will tell people this is how we tried, and this is why it did not work out,” the minister said.

Following the setback in the panchayat polls, the Left Front government has gone on record saying land acquisition for industry will not happen in areas where “people are not ready” for it. This has put the future of several township and industrial projects in the state in jeopardy. In fact, the deadline for completing land acquisition in Dankuni has been missed by six months.

Consent has come for only 200 acres and the government was forced to form a “procurement committee” with public representatives including those from the panchayat. It was decided the committee would talk to the people and take their consent before land is taken for the project.

The panchayat polls worsened the situation. CPM suffered heavy losses in the Dankuni area, losing eight gram panchayats to Trina-mool. As a result, the procurement panel will now have no panchayat pradhan from CPM.

“The base prices of land had been fixed. But now a new procurement committee will be formed in July. It is up to the committee to take a call,” the minister said, adding that it is yet to be decided if DLF will eventually try to directly purchase the land. The 200 acres for which consent has come “is in too remote an area and won’t do us any good”.

On her part, Mamata said: “Today, the government may say it is shelving the DLF project, but if the land acquisition notice is not formally withdrawn, it may later acquire land for some other project.”

Slowdown And Falling Market Demolish Real Estate Stocks

The uncertainty in the capital market has hit realty stocks the hardest.

The BSE realty index is the worst performer this year, having shed 51% of its 52-week peak reached in January.

With increasing evidence of a slowdown in the realty sector, rising input costs and little chances of interest rate softening, experts feel realty stocks may see further dip in valuations.

The BSE benchmark index Sensex has shed 24% since January while power stocks, which had a fantastic rally before the January crash, have lost 42% of their 52-week peak. Other major losers include bank (41%), consumer durables (41%), capital goods (39%), PSU (39%) and oil and gas index (28%).

Centrum Capital research head Harendra Kumar says, “Realty and power stocks had run quite high in 2007, and that’s why when they started coming down, the fall was more pronounced”.

Further he said that investors were factoring in higher profits, but now with the sector in the throes of a slowdown, they are scaling down their expectations leading to fall in prices.

The country’s largest property firm DLF’s scrip lost 54% while Unitech shed 64% from its peak. The scrips of Delhi-based Parsvnath and Omaxe have lost 68% each since January.

Real estate sector is seeing a major slowdown in the sales volume in most markets of the country. The speculators have exited the market and Mumbai and NCR, the biggest real estate markets in the country, are seeing subdued sales.

In Gurgaon and Noida, which had seen prices almost treble in four years, sales are down 70%, leading to a price correction of 10-20%. Centrum’s Harendra Kumar says if the negative news-flow continues for the realty sector, the scrips may see a further dip.

Angel Broking research head Hitesh Agrawal said, “The scenario has changed since end-2007 when the consumers expected interest rates to soften. We are faced with such a high inflation rate that interest rates are unlikely to come down for 6-9 months”.

Mr. Agrawal said, “Rising steel and cement prices have increased the input cost for developers while credit has been tightening with banks becoming selective in lending”.

Realty Deals Get Buried In Pan-India Landslide

Over the last two years, land prices have shown a northward trend. Now, it’s time now for a realty check.

Record land auction at Mumbai’s Bandra-Kurla Complex- like the Rs 46,000 per square feet buy by Wadhwa Builders in November 2007 are passe. The last auction at BKC, by Jet Airways, has seen rates tumbling to Rs 32000, a drop of a whopping 30% in just about four months.

Year 2008 has already seen some setbacks in land prices across Mumbai, Pune, Bangalore, Chennai and Gurgaon. Most agree that land rates across cities are coming down and deal volumes have decreased. “There has been a visible downward trend in land auctions that started beginning of this year,” says Anuj Puri, chairman and country head, Jones Lang Lasalle(JLL).

Consultants like JLL claim that land prices at Thane’s Waghale Estate has come down from Rs 20 crore an acre about 6-9 months back for an industrial plot to Rs 15 crore, the asking price today.

Even at Turbhe and Nerul in Navi Mumbai, rates are down from Rs 18-20 crore an acre to Rs 15 crore. A deal for a housing society at BKC’s neighbouring Kalina was called off a while back as the Rs 30,000 per square feet price being quoted was too high.

In Pune, where landowners weren’t willing to negotiate on prices, there has been a 10-20% fall in prices in some areas. Like in most other locations, in Pune too, the number of deals has dropped considerably.

In many cases, landowners are sticking to their rates but negotiating in a different way. Mr. Praveen Kumar, associate director, land and consulting, JLL, said, “Land prices might not be down on the ground but the development structure has changed in the last few months. There are many more joint development agreements being signed between landowners and developers in Bangalore”.

Though there has been some upward movement in land rates near the new Bangalore airport, places like Whitefield, Bannerghatta Road and Hosur Road have seen a considerable drop in land prices.

According to a prominent real estate consultancy, which has tracked land rates in these areas, Bannerghatta Road has seen a drop of 25%, Whitefield has seen a drop of around 50% and Hosur Road has seen a dip of 10-12% over the last 6-8 months.

In Chennai, prices had gone beyond realistic levels, says a Chennai-based real estate consultant. He says that at Kelambakkam on OMR, land value is down from Rs 10 crore to Rs 7-8 crore an acre. Similarly, at Ambattur, land value is down from Rs 10 crore to Rs 6.5 crore an acre.

Stars Are Selling Dream House

Bollywood celebrities don’t just peddle dreams but also dream homes. Real estate developers are now banking on the star power of the likes of Shah Rukh Khan, Amitabh Bachchan and Aishwarya Rai to endorse their projects.

Deepika Padukone is the latest to join these marquee names. Aspire Real Estate, a Dubai-based developer, has signed up the actress as its brand ambassador. “We are targeting India, and Deepika will add to our brand equity,” said an Aspire spokesperson.

The trend of celebrities - from tinsel town and outside - endorsing real estate projects started around two years ago.

So while big banner draws such as Shah Rukh, Aishwarya, Bachchan or even sarod maestro Amjad Ali Khan and his sons represent the likes of DLF, Sahara and Omaxe, a host of smaller developers too have started signing up celebrities to cut across the clutter.

Thus, Pune-based Brahma Developers uses actress Katrina Kaif to promote its SunCity project, Chandigarh-based LVL City has signed up cricketer Yuvraj Singh, Chadha Group has former cricketer Kapil Dev, AEZ group has actress Perizaad Zorabian while small screen star Shweta Tiwari of Kasauti Zindagi Ki fame was the brand ambassador for Gaursons Developers.

Omaxe executive director Vipin Agarwal says star endorsement was imperative in the highly competitive realty sector.

“The celebrity not only gives the product greater recognition among the target audience but also helps the brand to connect with the customer, thus increasing the brand acceptability,” said Agarwal.

“All real estate campaigns focus on similar amenities. The tag ‘world class amenities’ is now clichéd,” he said. “Stars help a project stand out in an overcrowded market.”

Also, developers feel that hiring a star can give a boost to the sale of residential projects, with the sector witnessing a slowdown of up to 25 % since January this year.

The trend is not restricted merely to big developers or the metros.

Kochi’s Jairaj Projects has roped in Malayalam film star Jayaram; SRK Constructions has singer Yesudas, cricketer Rahul Dravid endorses Skyline Housing, while another cricketer, S. Sreesanth, promotes the Kochi-based Mather Builders.

Pacific Star To Lure Additional Foreign Funds To Thailand

Pacific Star International (Thailand) plans to bring more foreign funds to invest in the Thai property market as assets here can generate high returns at double-digit rates.
“They are global financial institutions, banks and insurance companies, who aim high and are happy to invest here. Investing in Thai properties could produce an internal rate of return of 15%,” Daniel Ross vice-president for business development and direct investment said.
The parent company Pacific Star Group from Singapore now manages five property funds including the US$250-million Asian Real Estate Prime Development Fund, which was set up offshore to invest in property markets across Asia. The fund initially had a policy to allocate ten percent of total assets to Thailand.
Among the money poured in the Thai real estate market, some went to two joint ventures with SET-listed Asian Property Development (AP).
“We’re looking to raise more funds and expand the fund size to four hundred million dollar in a few months,” Mr Ross said.
Pacific Star International is now studying two or three possible deals, which would be settled within this year. It also plans more ventures with AP in the future if any interesting projects arise.
Mr Ross noted that the company was interested in developing new hospitality projects in prime destinations such as Samui and Phuket. Wealthy investors, particularly from the Middle East, are very interested in owning beachfront resort villas in the kingdom.
Pacific Star International is currently involved in four projects. Two are joint ventures with AP while the other two, Sathorn Gardens and Eight Thong Lor, are being developed on its own.
Urasate Navanugraha, the company’s assistant vice-president for asset development, said the four projects were progressing well. Sathorn Gardens has just finalized sales of hundred units in the first phase and 20% of ninety five units in the second phase have been reserved.
“We expect to sell out all units in the second phase by September. After that, we will decide what to do with the remaining one hundred fifty five units based on market situations,” he said.
The property company plans to stage road shows in Hong Kong, Singapore, Dubai and India over the next five months to promote Sathorn Gardens, two 41- storey condominium buildings. The average selling price is 100,000 baht per square metre.
The Eight Thong Lor mixed-used project launched presales of condominiums early this year with a 40% booking. The project would have 5,000 sq m of retail space, a serviced-apartment zone and residential condominiums. Construction is expected to be completed by the middle of next year.

Dubai-Based Real Estate Major Looks To India

Dubai-based real estate major Majid Al Futtaim (MAF) is likely to enter India for which it is in the process of identifying a local partner.

The country’s estimated 16 billion dollar realty sector, which has already attracted UAE-based players like Emmar, Limitless, Nakheel and SmartCity, has been identified by MAF as a ‘market to be in’.

The company is looking to tie up with a local player to build shopping malls, residential properties and other commercial spaces.

Majid Al Futtaim VP Business Development Younis Al Mulla told, “We are studying the Indian market and soon we are going to have a place in the country. India is the company’s target and we need to set up operations in the next one or two years,”

He said a team of senior company officials visited India in the month of March to evaluate various options and held talks with companies here.

“We are visiting India again in June to organise roadshows in major cities, including Bangalore, Delhi, Mumbai and also Goa,” he added.

Asked about the investments planned for India, Al Mulla said, “We do not know it yet as nothing has been finalised. We have not decided on that.” MAF also operates hypermarkets, in joint venture with the world’s second largest retailer Carrefour, in the Middle East, North Africa, Iran, Pakistan and other markets.

The company’s announcement comes at a time when, even Carrefour is likely to finalise its plan for India and announce its partnership with an Indian company. Indian real estate industry is currently pegged at about 16 billion US dollar and is estimated to post annual growth rate of 30 per cent to reach 60 billion dollar by 2010. The sector witnessed increased interest from several international developers, primarily from the Middle-East, South-East Asia and Europe.

MAF operates in spaces like real estate, retail, management of proprietary funds and has joint venture with some international companies to complement the existing businesses of the Group.

The primary focus for the MAF Properties is the development of shopping malls, hotels and mixed-use communities projects. The company operates seven shopping malls with a total retail area of 500,000 sqm in UAE, Egypt and Oman.

While, MAF Retail manages Majid Al Futtaim Hypermarkets, a joint venture company with the world’s second largest retailer Carrefour.

There are currently 26 hypermarkets in the Middle East. The Carrefour brand has expanded across the UAE and into Oman, Qatar, Saudi Arabia, Egypt, Jordan and Kuwait.

India Real Estate Infra Fund Looking For $100 mn Mop-up End June

MUMBAI: Mauritius-based India Real Estate Infrastructure Fund’s first round of fund raising exercise will come to an end by June by which it plans to mop up one hundred million dollar.

Launched in January, the fund targets a mop-up of two hundred fifty million dollar from across the world for private placements in Indian real estate companies. Balance one hundred million dollar will be raised in the following closures.

“We plan to invest the money in unlisted Indian real estate companies under the FDI guidelines. We prefer to have weightage of up to 50 % in every company so that we can have a ‘say’ in the management. It will help us to drive the policies in the right direction,” said Arun Goel, CEO of DHFL Venture Capital India Pvt. Ltd, which has been mandated to create an investment portfolio on behalf of the fund.

The fund will invest in real estate companies pursuing projects in residential, commercial and hospitality domains which also encompass SEZ, IT parks, hotel.

DHFL Venture has appointed Mumbai based Yen Management Consultants Pvt. Ltd as financial advisor.

The fund will consider factors like the number of development projects in hand, FDI compliance, local presence and growth plans and execution in choosing the company.

Explaining the investment rationale, Goel said, “an increasing population and flourishing services sector have resulted in a number of green field projects to build residential and office buildings. Further, rising cost of hotel accommodations across major cities in India has led to high demand for ones with reasonable rates.”

Besides EU based countries, the fund is getting good response from Japan, the UK, UAE, said Goel, who expects the fund to give 25 % internal rate of return.

Berggruen Will Invest 500 Million Dollar In India

Berggruen Hotels is scaling up its plans for India and proposes to set up 8-10 four-star hotels, adding to the investments it has already announced to develop budget hotels, service apartments and resorts under the Keys brand name.

The upscale hotels will be established over 4-5 years, taking the company’s total investment in India to Rs 2,100 crore. “We launched operations in India in 2007 with budget hotels as this was the ideal segment to enter. We are now finalizing the upscale concept to be launched here, and the model will be replicated in the international markets,” chief marketing officer Partha Chatterjee said.

Berggruen Hotels is backed by New York-based Berggruen Holdings, which manages the personal investments of billionaire hedge fund guru Nicholas Berggruen. The investment will comprise $200 million in equity while the rest will come from borrowings, Mr Chatterjee said.

Construction of seven budget hotels is under way and work at eight more locations will begin this year. Berggruen had announced in 2007 that it was setting up 38 budget hotels in the country at an investment of $100 million.

The first budget hotel will open in January, 2009, in Kerala’s capital Thiruvananthapuram, while the first four-star property is expected to be operational a year later at Valsao beach in Goa.

Berggruen has roped in leading Japanese architect Shigeru Ban for the four-star hotels. “We expect to have around 4,500 rooms under operation by 2011,” Mr Chatterjee said, forecasting a turnover of Rs 350 crore by then.

Berggruen Holdings’ other investments in India include an equipment rental company, a vocational education provider, a car rental company, real estate development deals and investments in the stock markets.

SMR Ltd Plans To Invest In Malaysia Cybercity

Mumbai-based Sunil Mantri Realty Ltd plans to invest about hundred million U.S. dollars to participate in the development of Bandar MSC Cyberport in Kulai, the first Multimedia Super Corridor (MSC) cybercity in Malaysian southern Johor state. This is for the first time that an Indian company is investing in malaysia cybercity. The company signed the MoU to jointly develop this more that one billion’s ringgit development.

MSC Cyberport chief executive officer Mr. Ganesh Kumar Bangah said, “The hundred million U.S. dollars investment from Sunil Mantri will be injected to develop Phase one of Bandar MSC Cyberport, covering a size of 13.2 ha. Work on the project is expected to start at the end of the year”.

Mr. Bangah said, “It will be a mixed development with residential, commercial and ICT spaces targeting the IT operations of MNCs, while developing local technology companies and technopreneurs.