Chennai Real Estate Property

Chennai Real Estate 2010 - Latest trends

2010-11-21T21:51:00.000-08:00

Chennai, a city in Tamil Nadu on the Bay of Bengal; formerly known as Madras is among the most beautiful of cities in India with its inspiring intellectual inheritance and shrine architecture. Situated in a region with many rivers and brooks and with a healthy population of 6.9 million, Chennai is distantly situated from the national capital Delhi and has been an important and one of the four metropolitan cities since the historical times.

Chennai is the fifth most populous city in India and fourth most populous metropolitan. With the materialisation of Multi National Companies in India, Chennai’s economy today has broad base in car, computer, technology, hardware manufacturing, and healthcare industries. The city is in fact India’s second largest exporter of software and has caused an increasing first choice of the city as a big business centre by most important international companies, who have invested immensely in the financial system.

The Chennai property market has seen an escalation of almost 200 percent in the last few years but with the global slump in the real estate industry, Chennai real estate has slowed down. The residential real estate prices in Chennai have grown by leaps and bounds making it difficult for buyers to purchase a home in the city. People are awaiting the market to stabilise further despite recent corrections. This has caused a 90% drop in demand for residential projects since the start of the year.

The commercial sector is not being spared either having seen a 15% drop according to media reports. The IT MNC’s largely drive the demand for Chennai properties but due to the current recession, many companies have postponed their expansion plans. Experts however predict that the market will bounce back.

Besides global inflation, the home loan rates have been steadily increasing, coupled by increasing input costs which have resulted in slump property transactions in Chennai. Quite notably, Old Mahabalipuram Road, the most blistering real estate destination in Chennai is also experiencing a downfall blaming the effect on lack of infrastructure facilities and real estate agents admit that there have been only a few transactions in the areas for quite some time.

A few of the eminent developers in India have shown their interest in increasing real estate in Chennai while property builders at the moment are constructing properties of the highest standards to pick up on the current slump.

DLF to open Luxury malls in Hyderabad and Chennai

2010-11-05T01:11:00.000-07:00

Real estate developer DLF Ltd that currently operates luxury mall -- DLF Emporio -- in the Capital is considering to start similar projects in other big cities, including Hyderabad and Chennai, that are seeing traction for high-end brands.

"We are looking to open more luxury malls in cities like Hyderabad and Chennai," DLF Malls Business Head Savitri Devi Singh said.

The company is currently in talks with the existing tenants at its DLF Emporio for the same. "There are some 10-12 anchor brands we are in discussions with to bring up similar models in other cities," she said.

According to Singh, who did not disclose the investment planned by the company in future projects, developing malls for housing luxury brands is an attractive proposition.

"DLF Emporio has already broken even and is doing very well in terms of revenue generation. It is a very viable business," Singh said, although she declined to divulge the amount, developer invested on the mall.

According to her, the mall is currently operating at a conversion rate of about 70 per cent. Some of the brands in DLF Emporio include Giorgio Armani, Salvatore Ferragamo, Louis Vuitton, Cartier, Fendi, Dior, Just Cavali, Aigner, Tods, Tiffany’s, Burberry and Hugo Boss, along with some leading Indian designers.

"Even Chandigarh has good potential for selling luxury goods, but we are not sure whether it would be right to open another mall there due to its proximity to Delhi," she added.

Cities like Bangalore and Mumbai already have luxury malls such as the UB City and Galleria, respectively and entering there is a much lesser attractive option.

If experts are to be believed, there is a dearth appropriate retail space in India that is keeping many luxury brands away from the country.

"There is a serious need to have more retail spaces for luxury brands to expand or enter India," AT Kearney Principal Neelesh Hundekari.

According to a CII-A T Kearney report, India's luxury market, which is small compared to global standards, is likely to grow three times and touch $14.7 billion by 2015.

In 2009, the luxury industry, including products, services and assets, was estimated at $4.76 billion.

Tata Housing plans new residential project in Chennai

2010-11-05T01:05:00.000-07:00

Tata Housing, the real estate developer for all consumer segments, has forayed into the Chennai residential market. It plans to invest nearly Rs. 2,000 crores in current fiscal. It proposes to develop nearly three to four million sq. ft in the few years.

Addressing a press conference here on Tuesday, Brotin Banerjee, Managing Director and Chief Executive Officer, Tata Housing Development Company Limited, said the proposed investment includes Crescent Lake, an integrated township project, spread over in 25 acre of land at Oragadam, an industrial hub of Tamil Nadu. The company proposed to develop 2,200 residential units in the next four years. The price range of the flats would be around Rs 14 lakh to 35 lakh. The project cost was estimated to be Rs. 650 to700 crore.

Mr. Banerjee said the phase I, which would have 960 apartments with six high rise towers offering 1BHK, 2 and 3 BHK apartments with a minimum size of 570 sq ft and the maximum of 1,406 sq. ft. The cost of the apartments would be Rs. 2,500 sq. ft. The second phase would have row houses and 3 and 4 BHKs.

The company was planning to tie up with the local land owners and develop projects in Chennai. It was planning to take up two more projects - large value home townships on 40 to 50 acre, priced around Rs 6.5 lakh to Rs 35 lakh and a premium project in Chennai city.

Apart from Chennai, the company was planning to develop a residential project at Hyderabad on 30 acres of land. The project would be developed along with a joint venture partner, who would bring land for the project.

Mr. Banerjee said the company was talks with various State Governments to promote affordable housing projects. It had initiated talks with the government to promote affordable housing projects through public private partnership (PPP) model. Already the company had entered into a MoU with the Assam Government to create commercial developments in the state. The first MoU was signed between THDCL and The Department of Industries and Commerce of Assam for creation of commercial space, including business parks and IT buildings in the state.

The second MoU was signed with the Guwahati Metropolitan Development Authority (GMDA) for developing a township and other infrastructure projects under the PPP model within the State. He said the company was in decision with other State Governments to promote affordable housing projects.

Mahindra Lifespaces Developers Ltd setting up Business parks in Chennai

2010-03-19T12:00:00.000-07:00

Mahindra Lifespaces Developers Ltd is in the process of acquiring around 4,000 acres in Chennai and Pune, where it intends to set up two more business parks, a top official said late on Monday. The company is acquiring around 1,000 acres of land in Chennai and around 3,000 acres in Pune, its Managing Director and Chief Executive, Anita Arjundas, told Reuters in an interview. Arjundas declined to comment on the cost for land acquisition. The firm, part of the diversified Mahindra Group, specialises in both the residential housing and commercial development segments. A business park is a township with office spaces.

It already has two business parks of about 4,000 acres under its commercial segment. The parks are operated under the brand Mahindra World City’, at Chennai and Jaipur. “Land procurement is underway, so once we are done with a significant part of it, we will start development,” she said. She did not provide a timeframe for completion of the business parks. Mahindra Lifespace is also looking to tap the recovering residential housing market by launching new projects in two tier-1 cities, she said, but did not elaborate. It focuses on the mid market and premium residential customer segments.

It already operates housing projects in Mumbai, National Capital Region (spanning New Delhi and adjoining areas), Pune and Chennai. Mahindra Lifespace has about 8 million square feet of space for ongoing housing projects and new launches. It has already completed construction in 6 million square feet. She said real estate prices in Mumbai, India’s financial capital, has recovered faster, while correction in other cities were much slower. India’s real estate industry, like the sector globally, was hard hit by the 2008 credit crisis after years of booming demand. Property prices doubled in the two years to 2007, fuelled by interest from foreign investors. But the sharp rise was followed by interest rate rises to calm inflation and the global financial turmoil, pulling down sales by more than half.

“Our understanding is that the market is back to the Jan 2008 levels, back to the peak level. General demand in Mumbai seems to be very good, while NCR seems to be a bit of a mixed bag,” she said.

FSI violation by 35 buildings at T. Nagar

2007-11-08T08:54:00.000-08:00

A recent survey of 35 multistoried buildings on Usman Road and Ranganthan Street, T.Nagar, conducted by the Chennai Metropolitan Development Authority (CMDA), shows that all the buildings have violated the FSI (Floor Space Index) and car parking norms.

The width of Ranganathan Street is about 10 metres and multistoried buildings are not permitted on this road. However, 14 of them have been built in the last few years and are functioning.

A close scrutiny of the CMDA survey shows that the percentage of violation far exceeds 600 in certain cases. The Yograthirnam building, door numbers 128 and 129 on Usman Road, has a FSI of 8.99, while what is permitted is only 1.5. FSI is the total built-up area divided by the plot extent. The building must have a mandatory parking space for 266 cars within its site. But space for parking only one car is provided.

The new GRT building on 50 North Usman Road got sanction for only five floors, including the basement, but eventually 11 floors, including the basement, were built, violating FSI and car parking norms.

In the case of the Sekar building, old numbers 84 and 85 Usman Road, the total built-up area is 7,089 sq.m with an FSI of 8.42. However, what is permitted is only 1,263.51 sq.m or 1.5 FSI. The Jayachandran building, door number 34/1 Ranganathan Street, Nalli Trust building, new number 100, Usman Road, has also violated FSI and car parking norms.

Most of the 35 multistoried buildings have not provided the mandatory side open space.

A CMDA source told The Hindu that most of the owners of these buildings when they apply submit a drawing that complies with all rules. They get planning and building permission. But when they start construction, they deviate from the approved plan. The function of the enforcement cell of CMDA is to inspect and stop such unauthorised construction.

However, the CMDA, in a note submitted on its enforcement cell, has stated that it is understaffed and is not in a position to monitor building activities effectively. There is an overlap of enforcement functions between the Chennai Corporation and the CMDA. The CMDA has recommended that the Corporation entirely take over enforcement responsibility. There are also instances of negligence and corruption.

Recently, two Corporation officials were suspended for failing to take action against unauthorised construction in the T. Nagar zone.

As in the case of Yogarathirnam building on Usman Road, stop work orders were issued (EC2/4749/05 dated 30.7.05) and a fine of Rs.11,82,900 was imposed. However, in many cases, even after receiving the stop work notice, construction continued. A few violators received demolition notices. Thirty days’ time is given to the owners to restore the buildings to the approved plan. Invariably, many ignore the notice or apply for permission to retain the building.

CMDA officials say the Town and Country Planning Act prevents enforcement action on buildings whose applications are under consideration or appeal. A few have taken the legal route and obtained a stay against the demolition orders. In the meanwhile, construction continues and the building is completed. While these buildings may get regularised through a government order, there is no system in place to ensure that such violations will not occur in future.

How can real estate be real?

2007-10-29T11:32:00.000-07:00

Housing sector initiatives in India - the beginnings. Housing as a priority was pushed to the front line in 1954 when the National Building Organisation (NBO) was set up by the Government of India for laying down plans and policies to promote housing to the homeless.

The private sector got into the act in a big way when construction people set up real estate outfits eyeing the vast scope in the field.

While the Government concentrated in providing budgetary plans through subsidised schemes, the private promoters and builders set their mind on providing posh apartments and luxurious living to the upper class.

Market promotion

Sales campaigns and marketing strategies came to the forefront, supported by glossy advertisements attracting the buyers.

Banks and financing institutions stood in bee-line with schemes for providing loans on attractive and ‘liberalised’ terms.

Some typical advertisements read thus: “Builders’ ads; Paradise regained in your new home; Luxurious living in nature’s lap; Buy an apartment and enjoy the facilities of a villa/resort; The address of royalty; The bank ads said, ‘Smart home loans,’ ‘No down payment,’ ‘Lowest interest,’ ‘No hidden charges,’ ‘Tailor-made facilities,’ ‘EMI as low as Rs. 499,’ etc. There have been hardly any who questioned the veracity of these ads.

Tighten process

As in many other cases, the administrators and law makers did not find any role for them in the field till things went wrong in the form of customer complaints, legal tangles, non-performing assets in banks, irregular constructions and so on.

Even then, rarely there has been any direct confrontation with the perpetrators of the problems. Only the Reserve Bank came on the scene, through the banking system, to tighten the loan dispensation process.

The proposed regulatory legislation too is yet to become a reality. Who is to ensure fair practices? There are many organisations of players in the real estate market, like the Ownership Apartment Promoters’ Associations at different State levels, Confederation Of Real Estate Developers’ Association Of India and the like.

Code of ethics

Some States have even enacted legislations, such as, Karnataka Ownership Of Flats (Regulation Of Promotion, Construction, Sale, Management and Transfer ) Act, 1972, and the Haryana Urban Development Act.

It is reported that the Associations of Promoters/Builders have laid down code of ethics. State legislations have penal provisions against non-fulfilment of the provisions and rules laid down. In some centres, there are organisations of owners of sites and apartments working for protecting their members’ interests.

If only all the Players and Regulators ensure implementation of rules and regulations and follow ethical practices, the real estate market can be a fair market. Further, the Government should not see the sector as a revenue spinner by raising the guidance value, cost of stamp duty and registration from time to time, escalating the cost, leading to unfair practices.

Play fair

If “real estate has to be real” each one of the players should play fair. The buyer should also value his money- even borrowed money.

He has to avoid falling prey to the glossy ads and false promises, but does his home work well, before entering the field.

Interest rate reduction doesnt really excite consumers

2007-10-25T09:06:00.000-07:00

A reduction in the interest rate announced recently by a few housing finance companies and banks and the possibility of others also following suit, with the festival season round the corner, could not be better timed.

The slashing of the rates comes at a time when the real estate is going through a sluggish patch in the backdrop of the sharply rising land prices making middle class households increasingly feel that there is little for them to purchase.

While representatives of the realty sector are happy about the reduction, as they feel that the move would revive customers’ interest, existing customers of most of the HFCs and banks who opted for floating interest rates feel that they are being discriminated against. This is because the reduction in the rates is only for new customers, in other words those who will seeking loans afresh.

What this means to the existing customers is little respite from the rather sharp increase in the rates on their home loans in the last two to three years. Their demand for also being extended the benefit of the recent reduction is not without reason as many of them have seen the interest rates spiral from 8 to 10 per cent or even more. It meant either an increase in the EMI (Equated Monthly Installment) amount or the repayment tenure.

Upward movement

Sources in HFCs said most of the institutions were in the practice of revising the floating rate every quarter though for some quarters the movement has been only upwardly. While pointing out that the reduction could well mean the beginning of the end of the alarming phase with regard to the spiralling rates, an official of LIC Housing Finance Limited said the reduction is translating into more customers.

As regards the decision of the institutions to apply the reduction to only new customers, the sources reasoned that it was not easy for the companies and the banks to do since they had borrowed their funds at different rates and at frequent intervals.

It would happen only when the cost of funds for the institutions come down.

In addition, they also inform that whenever reduction is announced it only means that the banks are only offering a discount on the floating reference rate (FRR) and the FRR itself is not cut.

Hailing the new interest rates, N.Sairam of G.R.Natarajan and Co said the existing customers should also be extended the benefit.

The new rates, he said, was one of the few heartening aspects for the builders in the backdrop of the rising cost of raw materials and escalating land prices.

Attractive

The need of the hour, according to Mr. Sairam, is an interest rate regime which is attractive to the middle class and affordable housing. The focus should be on making more people own dwelling units rather than catering to the high end of the society.

M.K.Sundaram, managing director, Chozha Foundation, said the rates for new customers were not surprising given that the rising interest rates for the banks also meant many households putting on hold their decision to purchase.

He said some of the institutions, particularly those based elsewhere in the country, were offering special rates to the customers of certain builders and developers.

Mr. Sundaram said one of the scheduled banks recently approached him promising that it would offer home loans at competitive rates to his customers.

This was a welcome initiative, he said, even while highlighting the need for the HFCs to give some respite to the existing customers on floating rate as well.

Home loan fair inaugurated

2007-10-24T08:30:00.000-07:00

‘Find and fund your house’ is the motto of State Bank of Mysore’s Home Loan Utsav that opened here on Monday. A 50 per cent concession in processing fee is offered. Some 10 builders are showcasing their housing projects at the venue. If a visitor decides to choose one and seeks a housing loan for it, the bank would provide its home loan that takes care of furnishing, and registration costs, in addition to the cost of the house.

The home loan can also be insured under ‘SBI Life’ for a one-time premium that is part of the home loan.

Loans are available with a floating rate of 11 per cent interest. Actor Kumari Sachu inaugurated the utsav .

The Bank plans to have two more home loan fairs that would be area-specific for the IT Corridor localities and in Anna Nagar. It is extending a concessional rate of interest and reduced processing charges to its customers for home loans till November 30, to mark the festival season.

The fair is on till Wednesday at C.P. Ramaswamy Art Centre on Eldams Road.

Property transactions plummet in Chennai, suburbs

2007-10-22T09:27:00.001-07:00

Data available with the Registration Department reveals that the number of property transactions in Chennai and its suburbs in Kancheepuram and Chengalpattu districts has come down substantially in the last two months.

In May 2007, the number of documents registered in the five district registrar offices was 51,583. Of these, 80 per cent was property-related. In September, the volume came down to 36,748. Property transactions in the suburbs in Chengalpattu district, including Sriperumbudur that had the highest volume of transaction in the State, dropped by 30 per cent. The market has been experiencing a lull in the last few months.

Senior Registration Department officials have been observing a slow-down in transactions, and the data compiled recently confirms this. A.V. Ramasamy, chairman, Builders’ Association of India’s southern centre, attributes the slowdown to the wait-and-watch attitude of buyers who, he reckons, are not willing to buy at the current prices.

C.H. Gopinath Rao, former national president, Institution of Valuers, says property dealers had bought land at high prices. In some cases they had paid huge sums in advance. They don’t want to sell now as the prices are falling. He says the increase in guideline values is not a reason for the slowdown. They have been raised within the city, but remain well below the market value in the suburbs. The additional rise in property cost due to guideline values is only marginal. The property values went spiralling even after the revised guideline values were put up for public opinion in 2006.

However, the revenue through stamp duty and registration charges has not dropped. The upward revision in guideline values, between 50 and 150 per cent, which have been in force since August 1, helped to stabilise the revenue collection.

Indra Nooyi’s new apartment

2007-10-18T09:05:00.001-07:00

Indra Nooyi, chairman and chief executive officer of PepsiCo, chooses Poes Garden, Chennai as her new home. She recently booked an apartment with the KGEYES Residential Private Limited, one of the Chennai-based real estate and construction company.

The website of the company describes Poes Garden project as a four floor apartment project with 4000 sq.ft apartment in each floor.

When last visited, the website informs that two of the four floors have been booked.

SIPCOT seesk grant for special infrastructure

2007-09-13T08:29:00.000-07:00

The State Industries Promotion Corporation of Tamil Nadu (SIPCOT) has submitted a detailed project report to the Union Ministry of Textiles, seeking grant for creating special infrastructure at the Irungattukottai apparel park.

Though the Centre had promised to release Rs.7 crore, it went back after the completion of the 10th Plan period in March 2007. At that time, an official had said that there was no provision for it in the 11th Plan.

Work delayed

Around 30 out of the 35 firms have delayed setting up their units. They met SIPCOT officials on Saturday and demanded a convention centre, a design studio, a common testing lab, a crèche, a canteen and a dispensary.

“We heard their grievances and are willing to help them. We prepared a detailed project report and submitted it to Bhupendera Singh, Joint Secretary, Textiles. In the meanwhile, we have decided to set up a effluent treatment plant costing Rs.2 crore, a common training centre, a hostel for working women, a crèche and a dispensary,” SIPCOT Chairman and Managing Director N. Govindan told on Wednesday.

Velachery-GST Road link project kick starts

2007-06-22T09:01:00.001-07:00

Work on extending the southern arm of Inner Ring Road, linking Velachery with Grand Southern Trunk (GST) Road through some of the fastest developing localities in south Chennai, has begun.

The State Highways Department, which is implementing the project, commenced the work a few days ago on the west of Pallikaranai swamp. It is scheduled for completion within two years.

Embankments

An official of the Department said with the swamp being a low-level area and prone to flooding, sand embankments were being built before starting work on the multi-lane road project. The embankments, 10-feet each, are coming up on both sides of the tracks of Mass Rapid Transit System (MRTS).

Simultaneously, the department has started work on the other side to provide connectivity with the Thillai Ganga Nagar subway.

The five-kilometre project involves laying a couple of four-lane roads on either side of the MRTS, which after some distance would converge to become a single four-lane corridor.

According to the official, ample space would be provided on the stretch for construction of piers for the MRTS phase II extension from Velachery to St. Thomas Mount. This is required since the extension would be on elevated tracks.

Space would also be provided for constructing a canal to drain the rainwater from Veerangal Odai to the Pallikaranai swamp. Residents of Velachery attribute the flooding of their area during monsoon to the absence of such a link canal.

The department official said the Inner Ring Road project will cost around Rs.100 crore, of which nearly three-fourth is towards the land acquisition.

The remaining amount would be on the road work. He added that the land acquisition has been completed.

Indiabulls Real Estate acquires two housing projects

2007-06-21T20:00:00.000-07:00

Indiabulls Real Estate Ltd has announced that the Company through its wholly owned subsidiaries, has acquired two housing projects in Chennai.

Selene Estate Pvt Ltd, a wholly owned subsidiary of the Company has entered into an agreement to acquire 50 acres of land to develop a residential project at Jalladianpet, a suburb of Chennai located next to IT Corridor at Old Mahabalipuram Road (OMR). 16 acres of land have already been acquired and registered.

Fama Land Development Pvt Ltd, a wholly owned subsidiary of the Company, has entered into an agreement to acquire 241 acres of land to develop a residential and commercial project located near National Highway 5 ("NH 5"), an alternate industrial corridor being promoted by the Tamil Nadu State Government. 198 acres of land have already been acquired and registered.

The Company, through its wholly owned subsidiaries, has acquired 396 acres of land in Panvel, near Mumbai, to develop large scale residential projects.

With respect to the formal approval to Indiabulls Industrial Infrastructure Ltd (IIIL), (a wholly owned subsidiary of the Company), for development of a multi product SEZ at Nasik, the company is in discussions with MIDC to finalize MIDC’s stake in the Joint Venture. As per the MOU signed earlier between MIDC and the Company, the stake of MIDC would be upto a maximum of 26% in IIIL, the Joint Venture company developing the multi product SEZ at Nasik.

The Company has received Rs 264.49 crore from Ariston Investment Sub A Ltd and Rs 172.89 crore from Ariston Investment Sub B Ltd towards the sale of equity stakes of 7.95%, each in Indiabulls Properties Pvt Ltd and Indiabulls Real Estate Company Pvt Ltd. Further, the Company is in the process of completing both these transactions.

Building violations may not see stern actions

2007-06-19T09:28:00.000-07:00

Confusion prevails over the terms of reference of the Justice S.Mohan Committee constituted to review the Town and County Planning Act. This committee was constituted through a government order issued on June 1 2007. The order broadly states that the committee will review the Town and Country Planning Act and recommend amendments to it. However, statements made by the Government indicate that the committee will review the regularisation schemes, in particular the High Court order passed to that effect.

The Government order is silent on this and carries no specific terms of reference for the committee.

The Government sources inform that the opinion of a retired Supreme Court judge has been obtained on the High Court order that upheld the building regularisation scheme of 1999 and rejected subsequent schemes brought in 20 00, 2001 and 2002.

The legal opinion so received favours the Government filing a review petition, the sources say.

A note on Section 113 of the Town and Country Planning Act, which empowers government to regularise or exempt any building from any rules of the Act, has also been circulated to committee.

The amendment to section 113 is under active consideration.

The opinion that is gaining ground in the Government is that it has the powers to amend the Town and Country Planning Act and regularize building violations. Attempts are made to go soft on demolition, instead levy a compounding fee.

In 1998, the Citizen consumer and civic Action Group (CAG) filed a case in the Supreme Court challenging the existence and amendment of the section 113a of the Town and Country Planning Act. The Supreme Court ruled in 2000 that the government has the powers to amend sec 113 but the manner in which it was made and the frequent changes to the Act were found detrimental to the city.

It allowed the regularisation scheme brought through section 113a of the Act as a one-time measure.

Higher FSI for multi-storied buildings

2007-06-19T09:25:00.001-07:00

The Floor Space Index (FSI) of multi-storied buildings across Tamil Nadu is to be increased and brought on par with the Chennai city.

At present, the multi-storeyed commercial buildings in Tamil Nadu has an FSI of 1.6 with about 40 percent of ground coverage (the ground coverage is the extent of area the building footprint occupies on ground).

It is to be raised up to 2.75 depending on the size of the footprint of the building.

The government order to this effect is to be passed shortly.

This standalone amendment comes at a time when the new building rules are on the anvil.

Citadines Chennai OMR Gateway

2007-06-06T07:49:00.001-07:00

The Ascott Group, the serviced residence arm of CapitaLand Ltd, one of the largest listed real estate companies in Asia, has signed a joint venture agreement with The Rattha Group to acquire its fourth and largest property in India.

Ascott said the property will be developed into a serviced residence.

"This is part of Ascott's master development agreement (MDA) signed with Rattha in August 2006. The MDA aims to acquire and develop seven serviced residences in India by 2010," the company said in a statement.

Ascott will acquire a 40 per cent equity stake in the property to be named Citadines Chennai OMR Gateway while Rattha will hold the remaining majority stake.

Ascott will also manage the property for 10 years with an option to renew the management contract for another 10 years.

Cameron Ong, Ascott's managing director and chief executive officer, described India as a key growth market for Ascott.

India, however, lacks the supply of quality accommodation to meet the increasing demand from inter-city business travellers and expatriates, he said.

"Ascott is the first international serviced residence company to enter Chennai. With the addition of Citadines Chennai OMR Gateway, Ascott has close to 1,000 units under development, and we are on track with our expansion target to achieve 2,000 units in India by 2010," he added.

Ascott has three other properties in India - Somerset Whitefield in Bangalore, Somerset Greenways, Chennai and Citadines Chennai Boulevard - all of which are slated to open next year.

Chennai's land prices costlier than London

2007-06-03T12:53:00.000-07:00

With real estate prices turning unaffordable to the common man, a city-based firm has come out with the offer of much cheaper properties in London, Dubai and even New Zealand.

Real estate promoters Ace International has put up for sale of 200 plots, some 20-25 kms off Central London and 12 kms from Heathrow airport. The 2,600-4000 sq ft plots cost Rs 15-20 lakh, half of what it costs in the Chennai suburbs.

"This is perhaps for the first time that promoters are taking up the marketing of plots in some other country," V Santhanraman, Director of the firm, said.

The firm has taken up marketing of the plots offered by some prominent developers in London, including UK Land Investments and Marc Properties.

The firm, which has been into the marketing of hotels in countries like China, Malaysia and Singapore and that of buildings for educational and other purposes and plantations, was approached by the London developers, said Santhanraman.

"The outside world has come to know about the buying capacity of Indians and the globalised economy has facilitated the free purchase and sale of land anywhere across the globe," he said.

The firm also claims to help the customer in completing all government and legal formalities regarding the purchase, resale and construction of houses in the plots.

Santhanaraman said his firm would offer site visits to the customer after collecting 20 per cent of the total cost of the plot as advance. The firm would arrange the visiting visa, accommodation and air ticket of the customer.

New Challenges for real estate in south india

2007-06-03T12:50:00.000-07:00

The lack of quality real estate for retail operations in the southern states has slowed down retail expansion in the region, denting the region’s reputation as a hotbed for retail and its potential for growth.
The slow development of retail real estate in the region has led to the South accounting for just 22% of the total retail market in the country at a value of Rs2,62,930 crore and a fifth of the 50 million people employed in this sector, according to a study released by research firm Images F&R in partnership with property consultant Cushman and Wakefield.
According to the study, in 2007-08, an estimated 100 million sq. ft of quality shopping space will come up across the country. But, only about 16 million sq. ft of this new development will be in the South. The northern region will see an addition of 41 million sq. ft. While in western India, around 35 million sq. ft of new retail development is estimated to come up by the end of 2007. Much of the retail expansion in the South is expected to come from rapidly expanding tier-II cities such as Kochi, Coimbatore, Vishakapatnam, Mysore and Mangalore.
“The new hub of retail will be the tier-II cities with population less than two million,” says Anurag Mathur, deputy managing director, Cushman & Wakefield.
It was southern-India-based retailers who pioneered organized retail concepts in the country. The country’s first supermarket, the Nilgiris chain, was set up in Bangalore in 1904 and Spencer’s Plaza in Chennai lays claim to being the first mall in the country.
Speciality coffee chain, Cafe Coffee Day, which will have a network of 500 cafes by the end of September 2007, set up its first café with Internet access thrown in at Bangalore’s upmarket Brigade Road in 1998.
But now, the lack of quality real estate space is emerging as a key concern for these retailers.
“You don’t see the intensity of malls in Bangalore as there is in Delhi and Mumbai,” says Bhaskar Bhat, managing director, Titan Industries Ltd. “The South has a way to go in being able to create retail space to cater to the aspirations of a growing customer base.”
Retail space has suffered partly because property developers concentrated on building the office complexes that house technology companies across the southern region; meanwhile, retail realty development lagged.
“We are definitely late in the retail layout construction segment,” says Mahesh Khaitan, director of real estate firm Salarpuria Developers. “The same skills that we used to build and sell office and residential space will not work for retail realty, we need to reskill ourselves in mall management.”
That’s despite a consumer base that is well salaried, and hungry for goods.
By the age of 27, the average IT worker in Bangalore earns Rs6 lakh a year and can expect a sixfold increase by the time he or she is 40 when earnings top Rs35 lakh. Average spend on eating out by India’s IT employees tops Rs4,500 crore according to CLSA Asia-Pacific Markets, a research firm that tracked the lifestyle pattern of 3.25 lakh IT professionals across the top eight IT firms in the country.
South India-based consumer durables chain Vivek’s took 30 years until it clocked Rs100 crore in revenues from its launch in 1965. The spurt of growth began from 1996 when it added 47 new showrooms, largely in Tamil Nadu and Karnataka, and in Chennai and Bangalore within these two states. “But in 2006, we posted Rs100 crore of sales in just 105 days” says Kodandarama Setty, chairman and managing director, Vivek’s.
Vivek’s had sales of Rs360 crore at the end of March 2007 with a chain of 54 stores. By the end of 2010, the group aims to add another 100 stores in the region.
Developers such as Salarpuria are rushing to meet the demand for quality retail space in South India. Salarpuria is building a 1.4 million sq. ft Market City, a retail space within Hyderabad’s technology hub, the Hitech City.
In Bangalore the developer will build two malls in the city’s western and northern suburbs at an average size of 0.65 million sq. ft.

Announcement on airports welcomed

2007-05-23T08:12:00.001-07:00

The Tamil Nadu State Council of Confederation of Indian Industries (CII) has welcomed the announcements made by Chief Minister M. Karunanidhi regarding airport expansion and greenfield airport near here.

In a statement here on Tuesday, CII chairman Gopal Srinivasan, said: "CII welcomes and fully supports this bold twin track move by the Chief Minister that will secure a quick medium term win, while creating a bold option for the next decade in the new airport location. This is exactly in line with the CII recommendation.'' he said.

Pay urban land taxes : Chennai Collector

2007-05-23T08:10:00.000-07:00

The Chennai Collector has urged owners of landed property measuring less than two grounds to pay their urban land taxes.

Owners of private land and lands leased out by the Government should pay quit rent, ground rent or lease rent at the respective tahsildars' offices soon.

`Will be seized'

The land would be seized if the levies were not paid, a release from the Chennai Collectorate said.

How do the chennai residents spend their weekends?

2007-05-22T08:32:00.001-07:00

Thanks to a skewed development of leisure and entertainment avenues — such as malls and multiplexes — the residents, particularly the youth, across the city seem to have different answers to the question.

While those in south and central parts of Chennai seem to head almost automatically to the nearest multiplex, mall or the much-favoured ECR, those in other parts of the city are not as lucky.

S.Raja, a software engineer from Kolathur, laments: "There is nothing spontaneous about weekends in North Chennai. There are no malls or multiplexes here and getting to the popular multiplexes involves too much planning. ECR is altogether ruled out." He points out that there are affluent people in North Chennai who would not mind spending that extra buck for leisure over the weekend. So what makes North Chennai or some of the other city suburbs unviable locations for multiplexes? A spokesperson of Pyramid Saimira Theatre Limited said in terms of potential customers (`foot falls'), theatres in North Chennai had as much potential as other parts of the city. The company is doing a market survey there and is keen on acquiring properties.

Residents of some of the southern suburbs of Chennai too have limited options.

The most common destinations are the Marina and Elliots Beach and to reach these places, residents have to spend a considerable amount of time and money. The Arignar Anna Zoological Park in Vandalur is a favoured location. Visitors have a lot of walking to do in the zoo, located on 1,300 acres of Reserve Forest.

Other options for the residents are beaches in Neelankarai and other villages off East Coast Road, but they are not fully developed, in terms of facilities and transport. Further, they are not entirely safe for families, considering the number of crime cases reported from that stretch. There are some amusement parks, but families have to pay a lot. There are not many air-conditioned theatres and the few that exist, are known to fleece moviegoers.

J P Morgan to invest Rs. 400 Crores in Chennai

2007-05-09T07:22:00.000-07:00

J P Morgan Property Fund, which has mobilised over $300 million to focus on the Indian real estate, is going to set up a residential project in Chennai at an estimated cost of Rs 400 crore.

Chennai-based realty developer Arihant Foundations and Housing will develop the residential property, spread over 45 acres of land, in a joint venture with J P Morgan.

The company's Board of Directors on Wednesday authorised its entry into the joint venture (JV).

The JV would have 50:50 equity participation from both the partners, Arihant Foundations informed the Bombay Stock Exchange (BSE).

The India property fund targets key economic centres in the country including Mumbai, Bangalore, Chennai, Kolkata, Hyderabad and New Delhi, among others, to develop projects along with local partners.

Last year, J P Morgan Asset Management had announced the mobilisation of around $360 million from institutional and high net-worth investors (HNIs) from the US, Asia, Europe and the Middle East to invest in the booming Indian real estate space.

Office space rentals likely to go down

2007-05-07T12:04:00.000-07:00

Commercial real estate market, which has been witnessing a bull run over last couple of years, will soon face a bearish phase. Oversupply of office space in most of the grade A cities in last six to 12 months, may result in a fall in rental and capital values.

According to a report by global real estate consultancy firm DTZ, ctites like Delhi, Bangalore, Chennai, Pune, Kolkata, and Hyderabad, except Mumbai will have oversupply of 20% to 200% of estimated demand in 2007. Mumbai will continue to have supply shortage.

According to Ankur Srivastava, MD, DTZ India, “The city-level demand-supply analysis in conjunction with the economic fundamentals shows office space rentals are likely to hit a plateau in next six to 12 months.”
He said barring a few exceptions, primarily the central business districts (CBDs), the oversupply situation will lead to a correction in office rental values. Lack of fresh supply in the CBD because of non-availability of land will not create oversupply scenario.

He added that correction in rental values will not be driven by lack of demand but due to oversupply. The leasehold office space markets are currently at an all time high — both in terms of quantum of space leased and rents. Lease rentals in NCR has gone up by over 200% in the last two years.

The study finds that rising capital and rental values and easy availability of capital have led to start of large number of projects at major locations. The increased pace of supply of quality commercial real estate is likely to outstrip demand in the short-to-medium term, the report said. However, it is expected that the oversupply position will reduce in long term as demand grows and supply tapers off. So, stakeholders like occupiers, investors, developers and intermediaries will formulate their strategies accordingly.

There are various factors that will define the degree and timing of this rental value correction. Srivastava said the threshold for this correction has been brought closer by the two recent interest rate hikes in the first three months of 2007. Degree of Inflation and consequent measures taken by RBI in the money market will play an important role in the real estate sector.

RBI tried to stem speculative interest and reduce inflationary pressures in the economy by curtailing availability of capital and increasing the interest rates. Srivastava said these steps will impact new projects.

List of areas for real estate frauds in chennai

2007-05-03T08:04:00.000-07:00

The police have drawn up a list of areas in Chennai, from where real estate frauds are reported frequently.

The immediate provocation is a steady increase in the number of complaints about land grabbing. Between January and March this year, Commissioner of Police Letika Saran received over 300 petitions from people complaining about real estate frauds, according to the Central Crime Branch police. Most of the complainants alleged that their land had been illegally grabbed and unauthorised persons had even begun construction.

In some cases, the petitioners sought police intervention to retrieve their property, which had changed several hands, without their knowledge. A few others approached the court. "Apart from creating awareness among the rightful owners, we have been cautioning prospective buyers to check the title deeds before entering into an agreement. We are also asking banks advancing loans against immovable properties to cross-check," Additional Commissioner of Police S. R. Jangid said.

The areas from where the police receive such complaints include Old Mahabalipuram Road, East Coast Road, Velachery, Pallikaranai, Tambaram, Chromepet, Porur, Mogappair and Ambattur, Deputy Commissioner of Police (CCB) G. Dharmaraj said.

Some loose ends in the registration process needed to be addressed to avoid such frauds.

Chennai - Beware of Land frauds

2007-05-03T08:02:00.000-07:00

Powerful brokers are cheating land owners in Chennai and the police are thought to back the rich and the mighty, reports say.

Forty-six year old Devi ended up in a police station after she shouted at construction workers who were illegally taking over her family's lands.

The family lands are owned by seven members but documents show it belongs to a private builder.

Devi's brothers say they were tricked into a deal by a local real estate builder.

The brothers Elumalai and Jayaraman say they have been made to sign on blank pieces of paper.

''IT people abroad are buying the property. Its there on the website of the Adityaram group. But all his dealings are completely fraudulent,'' says Elumalai.

An advocate for Adityaram Properties denies, but the police decided to back the powerful builders.

Villagers in the area fear the police the most.

Jayaraman adds, ''they called us, locked us up and then released us. The DC Adyar said, 'its the rate I fix Rs 25 lakhs in 10 minutes you'll have the cash.''

The police department's 'land grabbing cell' has atleast 1000 cases and they admit there are atleast four or five forged documents for many properties.

With a boom in real estate prices there is a huge spurt in the number of cases of land grabbing and land fraud in Chennai.

Estancia's big plans for chennai real estate

2007-04-30T11:48:00.000-07:00

It is his customers 'walk' to their destinations, offices, mall or school- that the P Suresh, 49, managing director, Arun Excello Infrastructure Pvt Ltd expects would propel him into the bigger real estate league.

The Rs100-crore turnover group that sold over 1,000 residential apartments promoting 19 projects, is planning to double that number in a single project called Estancia. An integrated township project, it comprises an IT park, school, shopping mall, hotel and serviced apartments coming up at Vallencheri, on GST Road near Chennai.

Undoubtedly, the Rs1,500 crore project on a 78-acre plot is a Hanuman jump for the group headed by this mechanical engineer from Guindy Engineering College, Chennai and an MTech from IIT, Kharagpur. All these years the group was promoting projects in the band of 3-4 acres

KG Green Meadows - Healthy living complex

2007-04-27T12:42:00.000-07:00

KG Developers and Promoters, one of Chennai’s city’s early and leading property developers with over 10 million sft. of residential and commercial space to its credit today, announced that it is setting up the first gated community complex within the city limits. To be called KG Green Meadows, the project with a projected investment of INR 50 crores, will be a boon to health and lifestyle conscious citizens of Chennai. Green Meadows is slated to be the first of its kind healthy living complex centrally located in the heart of the city, with a unique Oxygen Parlour and numerous other lifestyle enriching amenities such as jogging track, reflexology pathway, meditation centers, steam, sauna, jacuzzi, gymnasium and swimming pool. KG Developers and Promoters have since acquired 4 acres in Velachery where the project will come up. The project is scheduled for completion by early 2008.

Budget hotels from Indian Railway Catering and Tourism Corp

2007-04-27T12:38:00.000-07:00

The Indian Railway Catering and Tourism Corp. will set up 20 'Rail Ratna' brand budget hotels in the southern states and major hoteliers have already been awarded sites at several places for the venture, IRCTC Southern Region Manager K P Damodaran said today.

Addressing a press conference here, Mr Damodaran said sites had already been awarded for the hotels at Ooty, Kanniyakumari, Madurai and Rameshwaram.

Land would be handed over at Chennai Central, Trivandrum Central, Ernakulam, Kottayam, Calicut, Coimbatore and Mangalore for more hotles, he said.

Mr Damodaran said that since taking over the catering in Southern Railway in November, 2005, the IRCTC had set up 13 modern food plazas at major stations including Trivandrum, Ernakulam, Chennai and Bangalore.

Ten more food courts were being planned, including at Kollam, Kottayam, Kozhikode, Mangalore, Erode and Tirunelvelli.

To provide hygienic and wholesome food to railway passengers and visitors to the stations, major base kitchens would be set up at Trivandrum, Kottayam, Ernakulam, Thrissur, Erode, Madurai and Chennai, he said.

Land Scam in chennai

2007-04-25T08:35:00.001-07:00

A man, who allegedly sold the same piece of land to 15 people and collected Rs 1.95 crore, was arrested by the police on Tuesday.

Following two complaints received from Sujatha Mathew and S Radhakrishnan of Mogappair, Commissioner of Police Letika Saran directed the Central Crime Branch police to register a case.

Investigations revealed that V Sankaran (39) of Villivakkam N.R.N Colony had a general power of attorney for a vacant site measuring 3,600 square feet in West End Colony, Mogappair.

He allegedly sold the land to 15 people in three different batches and received Rs 1.95 crore out of the sale.

Apartment

He had also entered into an agreement with them to build an apartment on the land, but had not kept the commitment.

Investigating officers said that a case of cheating among others had been registered against Sankaran.

He was produced before a city court, which remanded him to judicial custody.

Further investigation is on.

Quick disposal of registered documents

2007-04-24T04:55:00.000-07:00

The State Government on Monday announced the "Samadhan Scheme" for quick disposal of registered documents pending determination of correct market value. People whose documents are pending with various sub-registrar offices can get their documents by paying 60 per cent of the difference in stamp duty between market value fixed by the respective sub-registrar and the amount remitted by the parties concerned. The new scheme will come into effect from April 24 and will be available till June 23.

Zak India Property Expo 2007 - April 26 to 29

2007-04-23T05:42:00.000-07:00

Prospective homeowners will find most of what they need at one spot next week.

Zak India Property Expo 2007, being held at the Chennai Trade Centre from April 26 to 29, will be accompanied by partner exhibitions, BuildTech and InteriorExterior Expo.

"For a person who wants to build a house, he needs the latest technology in building materials, he needs the property... and then at the end of the process, he needs accessories for the interiors," said Syed Zakir Ahmed, chairman and managing director of Zak Trade Fairs and Exhibitions.

Thirty developers will showcase 300 properties in Chennai and other cities, with prices ranging from Rs. 3,500 to Rs. 20,000 per square foot for commercial projects and Rs. 2,500 to Rs. 7,000 for residential projects.

Mr. Ahmed expects 1.45 lakh people to visit the exhibitions, which will be open from 10 a.m. to 7 p.m. and have a single entry ticket costing Rs. 30.

A legal advice booth, with independent advisers, will help visitors understand the jargon of the construction world and offer advice on legal documents.

"People get confused... What is plinth area and what is carpet area? We don't want anyone to get cheated," he said.

G.R.K. Reddy, managing director of MARG Constructions, one of the sponsors, feels that townships can be one of the buzzwords at the fair, which is being held during a boom phase in Chennai's property market. "Real estate prices are on a high because there is less supply and more demand. But houses take time to build. A lot of townships are coming up... In 18-24 months, 30,000 to 40,000 homes are coming up [in these townships], and they will meet the demand. Prices will go down."

GDES ready to start its new facility in Chennai

2007-04-23T05:39:00.000-07:00

Construction is complete on a 37,000-square foot, $1.6 million off-shoring facility in Chennai, India, which will house up to 500 employees, officials at Dallas-based GDES announced today.

The new building is home to GDES' flagship offering, Global Workforce Solutions™, which provides companies direct access to a low cost, highly educated workforce in India providing up to a 60 percent savings in operational costs, a rarity in an industry that has historically shied away from providing quantifiable savings.

Construction of the Class A facility, located in India's fourth largest city and home to major multi-national companies like Ford, BMW, Hyundai, World Bank, Standard Chartered Bank, Ericsson, Motorola, and Nokia, was overseen by India-based contractor ETL Infrastructure Services. The facility includes employee-friendly features not commonly seen by most traditional offshore facilities. In-house cafeteria, restaurants, retail outlets, medical facilities, fitness and recreational facilities, large lawns, open outdoor sitting areas and natural trees lining the facility are some of the aesthetics to be enjoyed by GDES employees.

(Click here for details)
International design of new building lobby"We are very pleased to open our Chennai facility as a satellite office for North American companies who are looking to establish a global workforce to take advantage of low cost labor without worrying about many of the negative attributes associated with traditional outsourcing," said GDES CEO Steve Clemons. "Because we provide our customers complete transparency into our cost structure, complete flexibility to change their processes without having to negotiate the contract, and complete control over their work content, we are able to directly deliver significant savings to our customers."

GDES' Global Workforce Solutions offers an alternative to traditional outsourcing by providing companies with a facility to process work such as document scanning, data entry, x-ray analysis, or any process that can be done anywhere in the world as long as someone has a computer and internet connection, are conducted by specially trained employees that report directly to an onsite company representative.

By accessing GDES' infrastructure, companies save the time and resources that would otherwise be spent in a foreign country working legal, tax, real estate, HR and cultural issues to establish their own facility.

In addition to housing the necessary equipment, computers, and services, the GDES Chennai facility is a full service office complex with a planned hotel on campus and 24 hour-a-day office access. Complete with scalable options, the facility's floor space is designed with North American companies' expectations for quality and scale.

Over the past decade, Chennai has grown into one of India's major off-shoring marketplaces due to its highly educated workforce, cost of labor and generous tax structure. The cost of skilled labor in Chennai is approximately 15-20 percent lower compared to Bangalore, Delhi and Mumbai. GDES' facility is also located in a Special Economic Zone (SEZs). SEZs are exempt from state and central government taxes and import duties on equipment and technology in order to attract investment. These cost savings are ultimately passed on to GDES customers. The facility is located 30 minutes away from the Chennai International Airport. Chennai is also home to South India's only US consulate. "Because our offering calls for a team leader of North American companies to be located in Chennai, it was important for us to build out a facility that included many of the features the American workforce has come accustomed to, and go beyond that by providing access to a quality American international school, the US consulate, and other amenities that will ensure a smooth transition period."

ETA Star Property Developers looks for partners

2007-04-16T08:47:00.000-07:00

Chennai's ETA Star Property Developers Limited, part of $4 billion turnover ETA Ascon group based in Dubai, is holding discussions with two US and two European investors to offload an approximately 40-per cent stake. The stake sale will help finance its real estate development projects in the pipeline.

The Tamil Nadu Industrial Corporation Limited holds a 0.1-per cent in ETA Star, with the balance being held by the promoters.

According to managing director P H M Syed Ismail, the company needs funds mainly to execute its proposed Rs12,000-crore integrated township project at Sriperumbudur near Chennai.

"The project will be spread over 1,200 acres. Already we have 250 acre and the balance is in the process of acquisition." He hopes to complete the land acquisition process in six months, while the the entire infrastructure is scheduled for completion in one and a half years. "After that it will take around seven years for us to complete the entire township project. We can construct five-crore square feet."

At the launch of the company's first residential apartment project in Chennai, Jasmine Court, Ismail said, the 4.4 acre residential complex will have six individual blocks of four floors with 219 apartments, with a total built up area of 2.87-lakh sq.ft. The two- and three-bedroom apartments are spread over between 1,100 and 1,557 sq.ft. "The launch price is Rs2,990 per sq.ft," he said.

The company is developing the property in partnership with Baashyam Constructions P Ltd, Chennai.

Earlier ETA Star had built the Binny Crescent and The Gardens residential complexes in Bangalore, where the ETA group had invested in the 70-acre plot that had belonged to the erstwhile Binny Limited, at Binnypet.

"We will develop Bangalore City Centre, a 7-lakh sq.ft shopping mall and the ETA Star Innovative Film City, a 5.5-lakh sq.ft villas and apartment complex in Bidadi near Bangalore.

In Chennai, ETA Star is mainly involved in development of commercial properties like shopping malls and IT parks, and the Jasmine Court marks its entry into the city's residential property market. This will be followed by 6.3 lakh sq.ft residential cum serviced apartment complex in Padur on the Old Mahabalipuram Road; an ultra premium apartment complex in Greenways Road, Chennai proper and 64 luxury villas spread over 17 acres at the junction of the Old Mahabalipuram Road and East Coast Road.

The company is developing a 27-lakh sq.ft IT park on the Old Mahabalipuram Road called ETA Techno Park. "The total project cost of Rs600 crore. We have completed 3 lakh sq.ft and has leased out to HCL Technologies. Another 3 lakh sq.ft is in the process of construction for the same client," Ismail said.

The company will also build a shopping mall at the site of the landmark Anand Theatre on the Anna Salai, Chennai, which will soon face the demolition squad.

The one notable shopping mall built by ETA Star in Chennai is the Chennai Citi Centre. However it has attracted the municipal authorities' attention for some deviations from the approved plans. "The deviation is very miniscule and in six months time it will be set right," asserts Ismail.

The company says ETA Star has real estate projects worth Rs1,100 coming up on 45 acres in Chennai. It also says that it has Rs2,000 crore worth of real estate development projects in other parts of the country.

In Mumbai, ETA Star has set up a 50:50 joint venture in partnership with Supra Estates to develop 10-lakh sq. ft, of which 7-lakh would be for residential and the remaining for a 3-lakh shopping mall in Juhu. The project will start in four months time. ETA Star is also involved in developing 63 acre near Mumbai. "The project will be developed into a health resort with a 5-star hotel, spa and other facilities," Ismail adds.

ETA Star's parent, ETA Star Property Developers LLC, Dubai, has launched over five-million sq.ft of premium properties in Dubai and the Northern Emirates. The company also has plans to develop another four-million sq. ft of commercial, residential and hospitality projects in Business Bay, Arabian Bay, International Media Production Zone, Dubai, Internet & Media City, a luxury resort & spa in the Jumeirah Palm Crescent in the Middle East.

Chennai Port plans for using its prime land

2007-04-10T11:51:00.000-07:00

The Chennai Port is planning an innovative method to generate revenue from a part of the 600 acres of prime sea-facing land that it owns. On the cards are a mall, multiplex and sea-facing restaurants that will be a first in the country, reports CNBC-TV18.

The Chennai Port could soon stop being limited to only shipping, but may also become a shoppers attraction. The port authorities want to develop a one-lakh sq ft plot of land into a mall, which will cater to both locals and international passengers arriving on cruise ships. "Looking at the potential, we thought we should have an international standard passenger terminal with all facilities of shopping and hotels and other things also,” says K Suresh, Chairman, Chennai Port Trust.

The mall is going to be part of a large multi-level parking facility that the port plans to develop on three acres of land worth an estimated Rs 500 crore, which would have otherwise gone un-monetised.The multi-level car park is something the port needs desperately, considering it exports about 1.1 lakh cars a year and uses almost 30 acres of valuable quay space to park them. The car park and mall are expected to generate at least Rs 300 crore a year.

"While promoting exports, we normally allow a 30-day free time for the cars; that free time and multi-level car park would not give us the revenue that we are looking for so that how the idea of having a shopping mall and hotel and entertainment facilities will come up" feels Suresh.

With the real estate prices in Chennai having doubled in the last two years and over 600 acres of port land available, this could be a great revenue source. So if the Chennai Port Authority is successful in developing a part of its water front property into an entertainment district, then it could be a fantastic revenue earning exercise that other port cities around the country could try, especially land-starved Mumbai.

AIG Global Real Estate and the RMZ Corp. to develop Real Estate space

2007-04-09T05:10:00.001-07:00

AIG Global Real Estate and the Bangalore based RMZ Corp., real estate development company will float an equal joint venture to develop commercial and office space in key cities across India. The proposed venture will also look at the hospitality sector tying up with some international hotel chain.

According to RMZ Corp managing director Raj Menda, the alliance will help us in achieving our long-term goals in terms of capital investment and financial support. The company recently acquired 11-acre plot in Chennai for Rs298.10 crore and has plans to develop the same as office space (1.5 million sq.ft). The land was owned by Hindustan Teleprinters Limited belonging to Himachal Futuristic Communications Limited.

Speaking about the joint venture, AIG's country head and chief executive officer Sunil Mehta, said, "We believe that AIG Global Real Estate is well positioned to realize and capitalize on the opportunities that exist in the Indian market. The joint venture would reinforce AIG's commitment as a long term financial player across all asset classes in India."

The five-year old RMZ Corp has plans to set up three joint ventures, one each for retail, residential and hospitality and office spaces. Currently present in Bangalore, Hyderabad, Chennai, Kolkata and Pune RMZ Corp will be expanding its operations to Mysore, Mangalore, Coimbatore, Kochi and Nagpur.

Land grabbing scam in Chennai !!!

2007-04-05T04:32:00.000-07:00

Here goes a NDTV report

A central government owned funding agency, in collusion with land grabbers, is allegedly auctioning the locked properties in prime areas of Chennai.

Indira is shattered. Although she lives in Bangalore she owns a beautiful house in Chennai as well. The property had remained locked for many years.

But recently it was auctioned and quickly demolished, all without her knowledge. It's only when her neighbours got in touch with her did she get wind of this crime.

Indira filed a petition under the RTI Act which revealed that a government owned funding agency called IREDA was behind the this.

By dubious means the agency had cited Indira's unoccupied property as an asset of a defaulter who owes it Rs 1.5 crore and had obtained an order from a debt recovery tribunal in Delhi to auction the property to recover these dues.

"I've no idea who they are, which company they run or how much have they've borrowed," said Indira, victim of land grabbing.

Experts say this a devious method being adopted by funding agencies to recover bad debts, all in collusion with land grabbers and even allegedly the debt recovery tribunal.

In this case the recovery officer had done nothing to ascertain the real owner of the property. And now the Madras High Court has ordered a probe by the CBI.

"The property which is worth more than two crore rupees has been sold for sixty five lakh rupees. So there is some beneficiary. The IREDA must have received only sixty-five lakhs," said R Suresh,
Asset Management Expert.

"Despite the notice they have proceeded and have confirmed the sale. They ought to have stopped," said R Subramanian, advocate.
Despite the best efforts by NDTV, IREDA officials refused to come on line.

Its a wake up call for all those who own property that remains locked for some reason. Land grabbers are on the prowl and your property may be up for sale, whether you like it or not.

Rs. 257 crores deal finalised for Shankar Hospital, Chennai

2007-04-04T04:37:00.000-07:00

Hyderabad based Global Hospitals has acquired the 450-bed Shankar Hospital, Chennai after it bagged the bid for Rs.257 crores in the office of the Chief Justice of Madras High Court on Monday.

Announcing this at a press conference here on Tuesday, K. Ravindranath, chairman, Global Hospitals, said the multi-speciality Chennai hospital located in 46 acres would be converted into a health city with 500 beds, 50 to be offered free of cost.

A press release said Sri Kanchi Kamakoti Peetam Charitable Trust could not operate the Chennai Hospital any longer as it had become heavily indebted. Also it could not establish a medical college. Therefore it was compelled to sell the property. The release quoted T. R. Rajagopalan, counsel for the trust, as having told the court that it was interested in keeping the hospital functional as a medical hub for the area and its neighbourhood. Hence it would accept the Global Hospitals' offer.

Dr. Ravindranath said Rs.1,000 crore would be invested in five-ten years in the Chennai hospital to make it a centre of excellence in each speciality. It would have a neuro, transplant and elderly care centres, a hotel, service apartments besides floors for Indian and foreign patients. It would be fully operational by the year-end.

Tatas enter realty foray

2007-04-02T14:09:00.001-07:00

For Ratan Tata it is now time to do a realty check. Tata Sons, the group holding company gave a go ahead to the real estate strategy for the entire group.

The realty foray will be through two main vehicles, Tata Housing and Development Corporation (THDC) and the recently launched Tata Realty and Infrastructure Ltd (TRIL).

TRIL will launch a Mauritius-based $1 billion realty fund where Tata Sons will put in Rs 800 - Rs 900 crore as equity in tranches.

Initially, the fund itself will have a smaller corpus of $750 million where Tata Sons will put in 15 per cent or around $100 million.

Negotiations for funds

Sources in Tata Sons say that the group is in advanced negotiations with a clutch of financial investors like PE funds Carlyle and Warburg Pincus, who are keen to chip in as co-investors.

Talks are also in the last leg with Macquarie Bank, Citigroup and a consortium of Japanese banks.

Sources in Bombay House say that initially the plan is to try and develop the real estate assets that currently exist within the group.

Group companies like VSNL, Tata Chemicals, Tata Tea, Tata Power and Voltas have assets across metros and Tier I cities like Bangalore, Mumbai, Delhi, Chennai, Kolkata and Pune.

The focus will be to monetise these assets in the beginning into commercial, office spaces and residential complexes.

Besides, even though the group companies will not get big consessions, they will enjoy a first right of refusal.

Banking on land

Valuation of the group's total real estate assets is estimated at a whopping Rs 15,000 crore. In phase I, 150-300 acres will be developed in the metros.

"We are evaluating what to do with our real estate. We have some plans," said Prasad Menon, MD, Tata Power.

Tata Housing, a 100 per cent subsidiary of Tata Sons will be the nodal agency for most of the realty development. Currently, THDC is developing eight townships across India, investing Rs 1,500 crore over two years.

New buildings will come under scanner

2007-03-29T05:38:00.001-07:00

New multi-storeyed constructions in the city will come under the scanner of an inter-departmental team before they get electricity and water connections.

The team, consisting of officials from Chennai Metropolitan Development Authority (CMDA), Metrowater, Tamil Nadu Electricity Board and other departments, would inspect such buildings to ensure that they adhered to a set of norms recently finalised by a High Court-appointed monitoring committee.

Completion certificates would be issued only if there were no violations. The certificates are necessary to obtain water and electricity connections, as per the court order.

Builders have been claiming that their work has been hit ever since the court order.

Builders' Association of India vice-chairman and Chozha Foundation promoter M.K. Sundaram said that not a single completion certificate had been issued by the CMDA since October, 2006. "At least, 20 applicants are waiting for the certificates. The rest have not applied ... they are waiting for the CMDA to come up with norms so that their applications will not be rejected and they will not be termed as violators," he said.

The norms should be "practical and viable", allowing for minor variations from the approved plan, he added.

According to sources, the norms would allow for some amount of variations.

But the inter-departmental team would ensure that the construction of the building was complete.

It would also make sure that there was adequate space for parking and setback before issuing completion certificates.

Already the team, which was constituted to speed up the process of issuing the certificates, found serious violations by 40 commercial and special buildings, pointed out CMDA vice-chairman R. Santhanam. He is slated to meet the builders soon regarding the norms.

India's real estate market pegged at $14 billion

2007-03-27T09:57:00.000-07:00

India's domestic real estate market is worth about $14 billion, experts observed at a conference in Chennai.

Amid the whopping growth in the sector, the experts also suggested that a regulatory authority be in place to enhance transparency in the real estate business in India.

'Currently growing at 30 percent per annum, the domestic real estate market is estimated to be of the order of $14 billion,' said Manoj Vaish, president and CEO, Dun & Bradstreet, India, which provides global business information.

'Last year it was sort of a gold rush for the Indian real estate sector. A massive influx of FDI was witnessed into this sector,' he added.

As a part of its ongoing efforts to educate and update market participants in India, Dun & Bradstreet this week hosted an interaction on the 'Dynamics of the Real Estate Market: The Investment Perspective'.

Speaking at the conference, S. Sridhar, Chairperson and Managing Director, National Housing Bank said, 'There is a huge funding gap for infrastructure development in special economic zone's (SEZ) commercial and domestic space.'

'The financial solutions providers, especially the domestic capital markets, should look into filling this void,' he suggested.

Sridhar said the real estate community should think out of the box and needs to offer wide range of products, which suits the pockets of even people in the low-income group.

According to former Planning Commission advisor Tarun Das, housing is an important asset in the Indian economy with strong backward and forward linkages.

'The high volatility in the housing market requires that the price movement is adequately tracked for smooth functioning of the economy,' he said.

'For a house price index to be meaningful, it must compare prices of equivalent houses from one period to the next. This is difficult, as no two houses are identical,' he added, stressing the need for a system of measurement that allows for differences in the sample houses traded.

'The real estate market is not a bubble and thus I don't expect it to burst. I expect the market to grow for the next 20 years. We need to enhance transparency and build trust,' said M. Murali, chairperson and managing director of Shriram Properties Ltd.

CMDA asks builders to fall in line

2007-03-25T16:35:00.001-07:00

Chennai Metropolitan Development Authority (CMDA) has directed 77 commercial multi-storeyed building owners in the city to restore the structures to the approved plan.

It also issued demolition notices to 23 applicants, who had sought to regularise such buildings under the 1999 regularisation scheme.

CMDA vice-chairman R. Santhanam said the high court-appointed monitoring committee, which met here on Friday, reviewed the action taken by the Authority regarding the regularisation applications and passed orders.

"Demolition notices have been issued in cases of buildings that have been constructed without any approved plan or in case of serious violations," he said. The applicants would be given a 45-day notice to demolish the unauthorised portions or structures.

"The committee decided that if the applicant does not take any corrective action within the notice period, the water and electricity connection would be cut." He said in most of the cases the notice period would expire by next month-end.

CMDA also informed the committee that it has sought additional particulars from 12 applicants in the same category, who had applied under the 1999 scheme.

The officials informed the committee that individual rejection letters were sent to applicants, who had applied under the 2002 regularisation scheme, which had been struck down by the Madras High Court.

"We have already sent individual rejection letters to 3,267 applicants out of 6,522 cases.

The committee asked CMDA to speed up the process and send letters to all the applicants under the regularisation schemes of 2000 and 2001, which have also been struck down by the High court."

At the next meeting, the committee would take up development control rule violations by those in the `special building' category. A sub-committee, Mr. Santhanam pointed out, had already been formed to finalise guidelines in view of the court directive to adopt "less stringent measures" towards residential buildings.

The committee also finalised norms to be followed while issuing completion certificates for new buildings as per directions given by the court in its August 2006-judgement.

Bid for Kanchi Trust land

2007-03-23T08:51:00.000-07:00

Leading property developer Shriram Properties has bid Rs 220 crore for 45.88 acres belonging to the Kanchi Trust, including a medical institute and a hospital, on the IT corridor on the outskirts of this city.

Shriram Properties, which made the offer for the land and the Sri Jayendra Saraswathi Institute of Medical Sciences and Sri Kanchi Kamakoti Sankara Hospital, informed the Madras High Court that it would furnish 10 per cent of the amount within 24 hours of its bid being confirmed and the balance within three months.

In an affidavit, the firm's chief operating officer R Murugesan undertook to "develop and run a state-of-the-art hospital in collaboration with a reputed medical institution". The offer will be heard by the High Court today.

In July last year, a Division Bench had permitted Sri Kanchi Kamakoti Petam Charitable Trust to sell the institute and hospital and fixed the price at Rs 185 crore. Earlier, a Single Judge had rejected the plea by the trust to sell the property. According to the trust, it had decided to sell the property as it had suffered heavy losses due to non-issuance of essentiality certificate. Stating that it had invested Rs 80 crore for establishing the medical college and borrowed another Rs 75 crore from banks, the Trust had decided to sell the property to clear its liabilities and had sought permission from the Court for this.

The Single Judge had, however, turned down the plea, against which the Trust filed an appeal, which was allowed by the Division Bench

Tier II, III cities becoming viable investment options

2007-03-22T13:07:00.001-07:00

The Tamil Nadu Government's proactive investment policy has led to the emergence of Tier II and Tier III cities as attractive investment destinations with more companies opening businesses there in the past few months, according to an analysis by the Confederation of Indian Industry-Southern Region.

Companies operating out of Tier II cities such as Coimbatore, Madurai and Tiruchi and Tier III cities such as Virudhunagar, Tuticorin, Karur, Sivagangai and Tirunelveli have doubled, or even tripled, their turnover in just two years, Sanjay Jayavarthanavelu, chairman, CII Tamil Nadu State Council, told reporters at the inauguration of Innovision 2007, a symposium on innovation in industries, on Thursday.

With Tamil Nadu in general and Chennai in particular becoming one of the most favoured investment destinations, the CII, together with the Government, was promoting Tier II and III cities as hubs for IT and manufacturing industries. For example, a city like Tiruchi had witnessed a buoyant growth with many companies touching the Rs.100-crore mark and some even exceeding Rs. 1,500 crore. Boilers, energy and fabrication units catered both to the export and import markets. The cut-flowers industry in Virudhunagar had several units doing business above the Rs. 200-crore mark annually. Many IT majors were now looking towards Tier II cities. About 40 companies had come up in Tiruchi in the past few months.

There were immense possibilities for industrial units to foster innovation in process development and services delivery, said Ajai Chowdhry, chairman and CEO, HCL Infosystems. However, the lack of an enabling research and development atmosphere in academic institutions was a major hurdle in creating innovations in industries. Only an industry-academia link could solve this.

Building demolition halted

2007-03-21T08:15:00.000-07:00

The Kancheepuram district administration, which began demolishing buildings on a piece of land classified as `tank poromboke' land in Chromepet on Monday, stopped the drive on Tuesday following protests.

Revenue officials came to Kulakkarai Street, Lakshmipuram near Chromepet on Tuesday morning along with policemen to continue with the demolition. However, the work, after the demolition of a compound wall, had to be stopped following protests from occupants of the building and from elected representatives.

Located near Chromepet, the area falls under the jurisdiction of Tiruneermalai Town Panchayat. According to the officials, they were acting on orders of the Madras High Court following a petition from V. Vedachalam, hereditary trustee of Arulmighu Mukkalathamman Temple. According to Mr. Vedachalam, a couple of buildings had come up on `tank poromboke' land situated next to the temple.

They had appealed to the Kancheepuram Collector as early as in 2002 to demolish them, and though Revenue Officials of Tambaram Taluk were instructed to inspect the site and remove the encroachments, it was not done.

The two buildings in the land are the Thanthai Periyar Library and a Sanmarga Sangam being run by the Senior Citizens Welfare Association.

Members of the association said the Sangam was run purely on a voluntary basis providing free tuitions and food to school students of poor families for more than 25 years. No donation was collected and expenses were managed with contributions of the association's members alone. Members of the Thanthai Periyar Arignar Anna Welfare Association, running the library, said the building served as a reading centre for poor students.

Alandur MLA and Labour Welfare Minister T.M. Anbarasan inaugurated the building in November 2006. Members of the two associations said it would be unfair to demolish buildings that were performing a useful job. They said the Tiruneermalai Town Panchayat had given its consent to hand over the land to the two associations.

However temple devotees said no local body had the powers to allot to others land that were classified as `poromboke' in revenue records.

Officials said they had stopped the demolition drive for the time being and would wait for orders from their higher-ups.

Beware of Real Estate price rises : IT Minister

2007-03-20T08:07:00.000-07:00

Burgeoning real estate prices would hamper the growth of the IT sector in Tamil Nadu, Union Minister for IT and Communications Dayanidhi Maran said.

Launching India's first web-based cross-cultural educational portal of Global Adjustments here, he said the government was not responsible for the increase in the real estate prices, which was a cause for concern for IT companies, planning to invest in Tamil Nadu, especially in Chennai.

"It (the rapid increase in real estate price) was due to investment in real estate by Indians working abroad," he added.

Stating that the phenomenal increase in the real estate prices would affect IT companies from investing in India, Mr Maran appealed to those in real estate not to increase the land prices.

"If you increase the land prices, then the IT companies will run away from Chennai," he said and pointed out that the land prices in tier-II cities like Coimbatore, where the Tamil Nadu government had decided to set up IT parks to attract investments, had in fact gone up steeply and was almost double the prices prevailing in Chennai.

Earlier, launching the e-learning portal on cross-cultural education in the presence of US Consul General David T Hopper, Cognizant Technology Vice-chairman Lakshmi Narayanan and Global Adjustments Private Ltd CEO Ranjini Manian, the Minister said India was growing at a tremendous pace with more and more MNCs were looking up to set up their base in India.

"Such services have become very essential and Global Indian will surely address the growing need of professionals travelling abroad".

Ms Ranjini said Global Adjustments focuses on providing solutions to ensure that every Indian had access to the training required to work in multi-cultural environment.

Chennai is on the radar of foreign real estate funds

2007-03-13T11:45:00.000-07:00

Chennai is on the radar of foreign real estate funds and large developers after the southern city recently witnessed two big-ticket property deals.

AIG Real Estate Fund along with the Bangalore-based real estate firm RMZ Corporation has purchased an 11-acre plot at Guindy belonging to Hindustan Teleprinters (HTL), a subsidary of telecom equipment maker HFCL, for Rs 298.10 crore.

In another deal, Shyam Kothari, brother-in-law of Mukesh Ambani, has bought IDBI’s 2.5 acres Boat Club property in Chennai for Rs 175 crore. These deals have taken the commercial property price in Chennai to a new high. International property consultants Jones Lang Lasalle was the advisor to both the deals.

The HTL-AIG deal has pushed land price in Chennai to a record Rs 27.1 crore per acre from the earlier Rs 15-18 crore per acre. The price of premium properties in Chennai has increased significantly over the last 12 months, driven by high demand, and limited supply.

Guindy, traditionally an industrial centre, has in recent years emerged as a centre for IT companies and has seen development of commercial space. Software companies and technology parks have come up within the Guindy Industrial Estate adjacent to the property. A major IT project, the Olympia Tech Park, with about a million sq ft of commercial space is coming up nearby.

HTL, a subsidiary of Himachal Futuristic Communications (HFCL), is under the purview of BIFR. Himachal Futuristic took a 74% stake in the firm in 2001, when the government divested its holding. HTL has another 50 acres on the arterial Mount Road, which is now expected to be auctioned shortly.

Record deal property sale in Chennai !!!

2007-03-09T14:43:00.000-08:00

HTL has sold over 11 acres of land at Guindy for a record price of Rs 297 crore.

According to sources in the industry, the HTL property on GST road, which was put on the block through e-auction, was bagged by a real estate developer for Rs 27 crore an acre. International real estate consultancy firm, Jones Lang LaSalle, the exclusive marketer for the property, was the sale manager. The name of the buyer was not disclosed.

According to sources in the real estate business, the size of the deal sets a new record for a property sale in Chennai. The price works out to about Rs 6,198 a sq ft. For HTL, this is a 50 per cent increase over the price it got in 2005-06 when the National Highways Authority acquired 1.64 acres for Rs 29.06 crore - Rs 4,067 a sq ft.

Guindy, till recently an industrial centre, has in recent year emerged a centre for IT companies and commercial space.

Guindy Industrial Estate, adjacent to the property, a home to small-scale enterprises, is now know more for the IT space and commercial built-up space.

Location advantage

The advantage the location offers is that it is at the junction of Mount Road and Mount-Poonamallee Road. A real estate developer with a million square feet of developed space commands Rs 60 a sq ft as lease in the vicinity.

Subsidiary

HTL (formerly Hindustan Teleprinters Ltd), a subsidiary of Himachal Futuristic Communications Ltd, a telecommunications equipment manufacturer, is under the purview of the BIFR. Himachal Futuristic took a 74 per cent stake in 2001 when Government of India disinvested its holding.

Chennai real estate market peaks

2007-03-08T18:23:00.000-08:00

The real estate market in Chennai is passing through a phase that it has never witnessed in the past. The residential properties are getting much costlier than office properties in the city.

The sale price of residential apartments, both in the primary as well as secondary markets, has almost doubled over the past 12-15 months in the city. On the other hand , the sale price of office space has increased just 20% - 30% on an average, during the same period.

The flare-up in residential prices is mostly attributed to the demand outsmarting the supply, besides the increasing cost of land acquisition. The increased demand is mostly driven by the growth in the IT/ITES sector in the city, which has also been attracting large investments in the manufacturing sector.

According to industry sources, the current capital value for office space ranges between Rs 4,500 per sq ft and Rs 7,000 per sq ft in the CBD (central business district), Rs 3,500 - Rs 5,000 per sq ft on OMR (IT Corridor) and Guindy, and between Rs 2,500 - Rs 3,000 per sq ft in suburban Ambattur.

On the other, the capital value of residential apartments ranges between Rs 4,500 per sq ft at the low-end areas and goes up to Rs 12,000 per sq ft.

It even goes more in places like Poes Garden, where the prices had never crossed Rs 5,000-mark.

“While acquisition of commercial space is driven by average rate of return (ARR) on investments, the buying of residential units is mostly driven by aspiration. If someone is keen on buying a residential apartment in a certain area, he buys. In such cases, the logic takes a back seat,” says Sanjay Chugh, vice president – Transaction Management Services.

In the case of the emerging OMR, the prices range between Rs 2,800 and Rs 4,000 per sq ft for newly-launched residential units. The price ranges between Rs 2,500 - Rs 4,000 per sq ft in suburban areas like Perambur and Ambattur.

“Today, the affordability of home buyers has gone up. Also the supply coming into the market is much less than the demand. Hence, builders are getting premium price and are also able to afford premium quality buildings," V Jagannathan, managing director, Ramaniyam Real Estate, a leading property developer said.
T Chitty Babu, MD, Akshaya Homes, termed this as a cyclical phenomenon.

"An emerging market will first witness demand for 'work space', and the higher earning

executives then drive the demand for residential units, which in turn will catalyse the demand for retail, food and entertainment spaces," he said. "Chennai is now in the residential segment of the cycle. And I am sure, 6-9 months down the road, there will be increased demand for commercial space catering to the requirement of retail, entertainment and food categories," Mr Chitty Babu added.

Former software services company SSI sells its real estate

2007-02-26T13:48:00.000-08:00

Prasad V Potluri, an NRI serial entrepreneur with an appetite for deal-making, has agreed to take complete control of Chennai-based real estate company SSI in a deal valued at Rs 900-1,000 crore.

Mr Potluri will buy the Kalpathi Suresh family’s 70.85% stake in SSI and make an open offer for up to 20% to other shareholders. The price being paid for the shares is not known but SSI’s market price of Rs 157.70 means that the promoter holding in the company is worth about Rs 646.57 crore.

Mr Potluri is expected to pay a premium. If the open offer is successful, it would take the deal value to close to Rs 1,000 crore.
The deal has been concluded and an announcement is expected soon. SSI, formerly a software services and IT education firm, has substantial real estate holdings in Chennai including a 70 acre property in Chennai’s Perambur area which it bought from the defunct Binny Mills Corporation.

It also owns a hotel in Ooty and a 37-acre property near Mahabalipuram. Real estate transactions have been getting pricier in recent times as funds flush with cash look to take advantage of soaring property rates. Real estate companies are busy raising money to build more office complexes, townships and residential apartments.

In the last year alone, three major high value transactions have taken place all of them involving foreign funds and local developers. JP Morgan invested Rs 274 crore in Lodha Builders and Morgan Stanley signed an agreement with Mantri to invest Rs 300 crore. And then Morgan Stanley agreed to invest more than Rs 675 crore in Oberoi Constructions.

2.38 Acre Land in Chennai may fetch upto Rs.150 Crore for IDBI Bank

2007-01-04T07:51:00.000-08:00

Chennai is set to witness its biggest residential land deal ever. IDBI Bank has put land in Chennai's most premium location, Boat Club Road, on the block and CNBC-TV18 reports it could fetch the bank over Rs 150 crore.

Chennai's property market is buzzing with news of big-ticket deals. Close on the heels of news that Chennai based HTL is looking to sell its 11 acre land in Guindy, IDBI Bank is selling its 2.38 acre plot in the city's most posh address, Boat Club Road.

The land has an FSI of 1.5 and sources say, it is probably the last large chunk of available land on Boat Club Road. Sources say bidders could pay upwards of Rs 14,000 per square foot for the chunk of land that currently houses two guesthouses of the State-owned bank.

Boat Club Road is the most coveted residential address in the city and consultants say, the sale will attract an overwhelming response from developers and individuals looking to build high-end luxury housing.

The sale is expected to take place in February through an e-auction. IDBI Bank has appointed Jones Lang Lasalle as the consultant to the deal.

Source: ChennaiTimes

Chennai Investment News Update

2007-01-02T10:15:00.000-08:00

Sobha Developers has won a contract worth Rs 23.21 crore to build a plant near Chennai for personal computer maker Dell's Indian arm.

Pantaloon Retail has announced its plans to set up its lifestyle retail store `Central' at Chennai.

Real estate boom to gain momentum in 2007

2007-01-02T10:14:00.000-08:00

The booming real estate market will gain momentum and is likely to attract foreign investment worth Rs 8,000 crore in 2007, an Assocham study has said.

"The real estate boom of 2006 is set to multiply itself in 2007 to get India a foreign capital of over Rs 8,000 crore with leading international investors establishing their presence in the rewarding real estate development," the industry body said in a statement.

The sector would provide employment opportunities to over two lakh skilled and unskilled workforce, it said.

The chamber attributed factors such as strong economic growth, rising income levels, growing middle class, increasing urbanisation and improving transparency for the resurgence in the real estate sector in 2006.

Assocham feels the sector would continue to grow further in 2007 with easy availability of financing. It forecasts that realty sector would grow from 12 billion dollars in 2005 to 90 billion dollars by 2015.

"Greater integration with the global economy and the increase of domestic as well as foreign investments are encouraging demand for real estate. Despite ill found doubts of a bubble, foreign investors are lining up," it said.

In a bid to encash the booming Indian property market, global players such as Royal Indian Raj International, Blackstone, Goldman Sachs, Emmar Properties, Pegasus Realty, Citigroup Property, Lee Kim Tah Holdings, Salim group, Morgan Stanley and GE Commercial Finance are expected to bring substantial foreign capital into India.

Source: Chennai Online

Peninsula plans rupee, dollar fund to buy land

2006-12-08T17:11:00.000-08:00

Peninsula Land Limited, the real estate arm of the Ashok Piramal group, is planning to launch two funds totalling Rs 2000 crore, a domestic and a dollar fund to finance its land acquisition programme.

The Indian fund, to be called Indigo, will be of Rs 300 crore with a green shoe option of RS 150 crore while the dollar fund, Paramount, will of $ 200 million with a $ 150 million green shoe option.

The domestic fund is expected to open by the end of this month.

The dollar fund which will target NRIs and other high networth individuals and Foreign Institutional Investors will open a few weeks after the Indian fund.

Both funds are expected to close in a six to eight week time-frame.

The dollar fund will be raised in London, Dubai, Singapore and Hong Kong.

Rajeev Piramal, managing director of Peninsula Land told the Business Standard that the amounts will be invested in acquiring land for the company's planned expansion in the south and West.

The company has planned a series of IT parks and retail mall developments across metros like Mumbai, Delhi, Bangalore, Chennai and Hyderabad as well as some of the second tier cities like Nagpur and Pune.

The company plans to build around 15 million sq ft pf IT space and a similar amount of retail mall spaces in these these cities.

The company is also planning to the hospitality space, Piramal said.

Piramal explained that the fund and the real estate company will invest together in these properties - while the fund will put up 75 per cent of the land cost, the company will invest remaining 25 per cent.

He clarified that the new fund will not be used to fund the development of existing properties.

The company is currently developing some residential and commercial office spaces in Mumbai.
Source: Business Standar

Ascott acquires 2 more properties in India to develop service residences

2006-12-07T15:06:00.000-08:00

The Ascott Group has secured its second and third properties in Chennai and Bangalore in India.

The acquisitions are part of the master development agreement signed with The Rattha Group in August.

Under the agreement, the partners will acquire and develop seven serviced residences in India by 2010.

Ascott will take a 40 percent equity stake in the two new properties with the remaining majority stake going to Rattha.

The two service residences will be named Somerset Whitefield in Bangalore and Citadines Boulevard in Chennai.

They will treble Ascott's portfolio in India to 660 units.

Ascott will manage the properties for a period of ten years with an option to renew the management contracts for another ten years.

Ascott did not disclose the financial details of its latest acquisitions.

Source:Channelnews Asia

Hilton Hotels Corp. announces investment in India

2006-11-30T11:47:00.000-08:00

Hilton Hotels Corporation (NYSE:HLT) today announced they will create a joint venture company (JV) in India with DLF Limited (DLF). The joint venture company plans to develop and own 75 hotels and serviced apartments over the next seven years. The formation of the joint venture is pending receipt of formal written approval from the Government.
The JV-owned hotels will represent several brands from the Hilton Hotels Corporation portfolio, including Hilton Hotels, Hilton Garden Inn, Homewood Suites by Hilton and Hilton Residences. The JV Company will develop and build these properties, while Hilton will manage them.

DLF will hold 74% in the JV Company, and Hilton will hold the remaining minority stake as a symbol of its commitment to the venture. Over the next five to seven years, Hilton will invest up to USD 143 million in the JV Company, before consideration of debt.

The initial stage of the joint venture will involve 20 hotels in a number of key locations, including Chandigarh, Chennai and Kolkata. A large number of these hotels are expected to be Hilton Garden Inn properties -- a business hotel brand, offering focused service. Beyond the initial 20 sites, the JV Company will continue to identify and acquire sites and undertake new hotel developments.

Ian Carter, Executive Vice President, Hilton Hotels Corporation and CEO of Hilton International Operations, explained the attraction of the Indian market: "India is an outstanding market for hotel development, given its powerful combination of economics and demographics. Hilton will build on its collective experience in India and the opportunity with DLF is a compelling next step to capitalise on the development momentum and build our Hilton Family of Brands in India."

Source: HotelMotel.com

Ambattur - an emerging IT/ITES hub in Chennai

2006-10-30T05:03:00.000-08:00

The Ambattur area in the North of Chennai is rapidly emerging as an IT/ITES hub for the city and an alternative to the Old Mahabalipuram Road (OMR).
Ambattur has for many years been an industrial belt, home to a number of small-scale industries and larger manufacturers. Recently though, a number of IT/ITES companies have set up shop in Ambattur attracted by low real estate costs and the availability of manpower in the area. Real Estate developers are not far behind, with many planning to develop IT parks in the area on land released by companies closing down or moving to other regions such as Gummidipoondi.

Several IT/ITES companies have set up operations in Ambattur include HCL Technologies, ICICI OneSource, TCS, Polaris, and Perot Systems.

Developer RR Group is constructing a 2.2 million sq.ft IT Park on nine acres of land in Ambattur at a cost of Rs.510 crore. India Land and Properties, a part of global real estate investor Americorp, is building a 2.5 million sq.ft IT Park called "Chennai Tech Park" on 10-acres in the Ambattur Industrial estate at a cost of Rs.375 crore.

Ambattur is conveniently located just 15-km from Chennai airport and has well established road and rail connections. The area was also recently brought under the Chennai Municipal Corporation limits.

Most importantly though, Ambattur and neighbouring districts such as Anna Nagar, Perambur, Korattur and Villivakkam are places where a large chunk of Chennai's IT/ITES workforce resides. Locating IT/ITES facilities in Ambattur would significantly reduce commute time for workers who live here.

Real estate investors who have focused on the southern part of Chennai would do well to start looking at opportunities in the north of the city.

Source: INR News

Khivraj Tech Park plans IT SEZ near Chennai

2006-10-26T11:54:00.000-07:00

Khivraj Tech Park Pvt Ltd, the real estate arm of Khivraj Motors, is planning a 25-acre IT products specific SEZ (special economic zone) in Navalur, Chennai, according to Mr Ajit Chordia, Chief Executive Officer, Khivraj Tech Park.

This would be the company's second venture in this area, the first one being Olympia Tech Park in Guindy, promoted jointly with Eveready Industries India.

Some of the existing clients at Olympia have evinced interest in taking up space at the new technology park as a part of their expansion plans, he said, including one major telecom outsourcing company.

Some of the major clients at Olympia include AIG (American International Group), an insurance products and services provider, and Mindtree, a Bangalore-based software services provider.

Mr Chordia said that the company is hoping for SEZ status because of the benefits to IT companies. "Since there is no certainty that STPI (software technology parks of India) benefits would be extended beyond 2009, bigger companies such as Wipro and IBM are looking at SEZs," he said.

From the developers' perspective, the capital cost comes down by about 10 per cent in an SEZ, which is not a major benefit, he said. Developers are entitled to benefits under the industrial park scheme, which is still valid for the next two years, and would allow the company to enjoy ten years of tax-free operations.

However, apart from the cost, the SEZ also allows for an assured title deed, and reduces the possibility of land disputes.

The company would also set up a school or a hospital for the benefit of the locals around the SEZ region.

Khivraj is also planning to expand to tier two cities in anticipation of growth in those areas. It would send in applications for SEZ allocations in Coimbatore, Tiruchi and Madurai.

Mr Chordia said that Coimbatore is emerging as a suitable alternative to Chennai, whereas Tiruchi is a city for the future. "We believe Tiruchi stands a good chance of becoming the next best destination after Coimbatore, because of the number of good engineering and arts colleges," he said, pointing out that a company such as ABN Amro has been recruiting B.Com graduates irrespective of their background. This could mean that the next logical step is to set up shop in those cities.

Also, Coimbatore is fast becoming as expensive as Chennai as far as real estate costs go. Rental costs in Tiruchi would still give the company a cost saving of about 40 per cent, he said.

Source: The Hindu

Serviced apartments becoming popular in Chennai

2006-10-20T10:08:00.000-07:00

First came the apartments. Then came the `fully' furnished apartments. Now you have `serviced' apartments that seek to offer the best of both worlds -- home and hotel -- to the increasing number of short-stay corporate visitors to the city.

Star City, which already has six such properties, has started constructing a Rs. 22-crore serviced apartments complex on Poonamallee High Road.

The block consisting of 60 apartments with their own kitchenette, microwave, rice cooker and washing machine would also have star hotel facilities, including gym and pool, says managing director Muruga Bharathy. "We will open in 2007."

Ranjini Manian of Global Adjustments, a company that is primarily into expatriate relocation, has also recognised the rising need for quality temporary accommodation.

"The number of expats coming to the city has gone up and is growing. However, except for a few apartments maintained by some star hotels, we do not have a temporary accommodation industry," says Ms. Manian.

Global Adjustments, she says, is thinking of a serviced apartments facility at Sriperumbudur, right on the telecom corridor. The two-acre facility, proposed to come up next to the Nokia Special Economic Zone, will house executives who want to avoid the hassles of commuting. For quality living there would be entertainment zones, landscaped premises, work areas, kitchenettes and a grocery around the corner, says Ms. Manian.

For the expatriates, cost is secondary when compared to a home-type atmosphere.

The concept of serviced apartment hinges on the cost factor, says Mr. Muruga Bharathy.

Ernst & Young has 40 of its employees housed at Star City's three bedroom apartments.

"They are on a four-month training programme. The cost will be prohibitive if all of them are put up at star hotels," says Mr. Bharathy. Other than three bedroom apartments, Star has studio apartments and suites for families. The rate per day for a three-bedroom apartment is on par with any three star hotel. For a month, it will be around Rs. 40,000 plus electricity charges.

Inn Chennai has four types of rooms, says sales manager Seshadri. "It is Rs. 2,000 for the regular room and Rs. 3,500 plus taxes for single bedroom apartment. We also have a multi cuisine restaurant and travel desk just like a hotel."

However, the concept that is popular world over and well established in even neighbouring Bangalore is yet to take shape in the city, say industry insiders.

For many, a serviced apartment means a `fully furnished' place with some furniture and a television thrown in. "It works for people who come down for medical treatment. Moreover, with rise in land and construction prices, small operators find it difficult to survive in this sector unless they offer furnished apartments," says Mr. Bharathy.

Operators such as Baheerada Marthandan of Chennai Real Estate have their hands full.

"After Tidel Park came up, the rental demand has gone up," he says. Instead of Rs. 2,500, a newly `converted' single bedroom serviced apartment in Tiruvanmiyur fetches Rs. 7,000.

"Now I am constructing a block with eight apartments at Sholinganallur," he says.

Source: The Hindu

Sustained demand for office space in Chennai

2006-10-17T15:19:00.000-07:00

The year 2006 has been a highly successful year for office developers in Chennai with most buildings completed till date being pre-leased. Projects such as Olympia Tech Park, Chennai One, Digital Zone 2, Amara Sri, Bascon IT Park and Kuppu Arcade have been fully pre-leased well before completion indicating strong market conditions.

The Indian real estate market, the size of which is now estimated to be around Rs.72,000 crores, is expected to continue growing at its present growth rate of 30% per annum.Nearly 3 million sft was absorbed in the first three quarters of 2006 in Chennai. The absorption slowed down in the third quarter of 2006 due to the limited supply getting completed. In spite of that, Chennai is the second largest office market after Bangalore. Very few real estate markets have undergone such a dramatic and rapid change in such a short span of time as the Chennai real estate market. Chennai is witnessing a sustained real estate demand that has largely been a result of growth, spearheaded by a spurt in the knowledge sector largely comprising the IT and BPO led businesses. The year has also seen the emergence of Ambattur as an alternate IT destination to Old Mahabalipuram Road and Mount Poonamallee Road. Projects such as Prince Info Park and Arihant Insight have seen good pre-leasing enquiries. Developers such as India Land and the RR Group are constructing large IT Parks in Ambattur. However, the Government needs to proactively improve the infrastructure conditions in Guindy and Ambattur as they have become IT hubs.

Major transactions

The total office space absorption in 2006 is expected to be 4.5 to 5 million sft which would be an increase of nearly 30% from 2005. Projects of leading developers such as RMZ and Ascendas are getting ready only in 2007. This has led to the current shortage of quality Grade A office space in the city. Due to this shortage, the rentals for office space have increased by 10-15% in the last 6 months. However, the developers buying land at exorbitant prices should realise that most IT and BPO companies have a rental budget varying from Rs. 25 to Rs. 40 per sft per month. If this rental increase continues, the occupiers would start considering other lower cost cities over Chennai.

Developers should also realise that projects in Chennai are not just competing with each other but also with projects from other competing low cost Tier 2 cities such as Hyderabad and Pune.

A number of projects by prominent developers such as Hiranandani, K Raheja, ETA and Shriram would be ready for occupation in 2007.

Also, the first phase of DLF IT Park @ Chennai, which is the largest office project in the city, would be available for fit-outs by the last quarter of 2006. A number of global technology and offshoring majors have committed for space in the DLF IT Park.

With companies having realised that Chennai offers better infrastructure than many other Indian cities, has low attrition levels and a large pool of qualified human resources, the city is fast emerging as one of the most preferred destinations for IT and BPO companies in the world.

The State Government should encourage growth of new townships, business parks and take up regional urban development plans where growth corridors can be identified and public-private partnerships promoted for investment in alternative nodes of development.

The State Government should try and implement in Chennai the Madhapur model of IT Park development as in Hyderabad. In peripheral areas, the developers need to focus on fast track, low-rise buildings with large floor plates, large green areas, adequate power, water, roads and connectivity infrastructure at cost- effective rentals rather than over utilisation of permissible FSI.

The arrival of the venture capital funds and the real estate mutual funds in the real estate scene will have an impact in a number of ways. The developers will get more organised, corporatise themselves and become more transparent to avail themselves of these funds.

As foreign capital flows to Indian real estate, a number of sophisticated institutional players will emerge to dominate the real estate landscape in a paradigm shift away from small players and wealthy individuals. As the opportunities in outsourcing start filtering to additional service-oriented industries such as financial services and healthcare, the commercial real estate sector is expected to witness further investments in the construction of offices for the next few years to cater to the growing demand.

Moreover, commercial real estate investments in Chennai offer relatively higher yields when compared to the rest of the world. Investors can expect yields of 10-11% in prime commercial properties in Chennai versus the global average of 5 - 5.5%, making it an attractive option for current income seeking investors.

Also, many companies have realised the size of the SEZ opportunity and are evaluating options to optimise fiscal benefits. Many of them are reviewing the existing operations and growth plans and are rethinking on the real estate strategy.

Companies are looking at migration and setting up SEZs as strategic option for business growth. The SEZ's are definitely lucrative investments to real estate developers as they will get a tax holiday for a consecutive period of 10 years (out of a 15 year period), exemption from the provisions of minimum alternate taxes, exemption from dividend distribution tax, service tax exemptions on input services, tax breaks for investing in an entity developing a SEZ and customs duty and excise duty benefit.

Source : The Hindu

Farmers willingly selling land

2006-10-13T15:15:00.000-07:00

Tamil Nadu perceives Special Economic Zones (SEZs) as centres to provide employment to skilled and unskilled labour force by utilising uncultivated fallow land. For farmers and land-owners, who are dependent upon rains and often suffer from negative returns, SEZs provide an exciting option for exit.
Irrespective of what is happening in other states, the SEZ development process in Tamil Nadu is going on smoothly. Acquisition of land by the state government or purchase of land by developers has not become a major issue in the state.

One of the reasons for this peaceful development is that most of the SEZs proposed in the state are industry-specific and they do not require land in excess of 330-400 acres. Often the land requirement is much less. This is in contrast to the big SEZs being set up in states like Maharashtra or Haryana.

In Tamil Nadu, the land is being made available to the SEZ promoters through multiple channels.

The principal source of land in Tamil Nadu is the State Industries Promotion Council of Tamil Nadu (SIPCOT) which has already acquired land, mostly ‘low biological potential land’ and dry stretches, to be leased out to industries in the periphery of Chennai and other cities and towns. All the major industries like Sterlite in Tuticorin, Hyundai at Irungattukottai, St.Gobain, Nokia, Flextronics, Motorola etc at Sriperumbudur, are being built on SIPCOT land. Some of them like Nokia are developing SEZs on the land allotted to them.

Source: Financial Express

Shriram group nurses major real estate ambitions

2006-10-13T15:08:00.000-07:00

What started as a small entry into real estate development for the city-based Shriram group, has now turned into a big business.

The group's real estate company headquartered in Bangalore Shriram Properties Limited has charted out mega plans that include development of information technology related special economic zone (SEZ) near Chennai, six township projects in Chennai, Kolkata and Bangalore apart from the usual residential property development in the southern cities.

Implementing these projects involve tying-up funds and even promoting joint venture companies. Expectedly, the thirty-eight year old managing director M Murali is busy shuttling between Chennai and Bangalore ensuring the project stays on course. Formerly a business development manager at Larsen and Toubro in Chennai, yhr 29-year old Murali was hired to head Shriram Properties in 1997.

"It was a strategic decision to have Bangalore as our headquarters when the company was promoted." The Rs5-crore equity Shriram Properties rode on the booming real estate wave in Bangalore.

From a turnover of Rs2 crore in 1998, the company closed last fiscal with a turnover of Rs140 crore. "This year we will close with a turnover of Rs260 crore. In two years the turnover will be around Rs1,000 crore," says a confident Murali.

According to him the company has constructed around 4-million sq.ft space and another 14-million are in various stages of comppletion.

The residential property centric Shriram Properties is now expanding into other cites and also undertaking the development of commercial property. Today, the company has projects in Coimbatore and Hyderabad. But what is interesting is its entry into commercial space development in a very big way.

JVs for IT SEZ and townships
Shriram Properties acquired the defunct Standard Motors' 58-acre factory land and machinery in a court auction for Rs154.10 crore. (See: MatexNet to auction Standard Motors plant and machinery) The Shriram group has decided to develop the land as IT SEZ in joint venture with the US-based Sun Apollo fund. Sun Apollo is a joint venture between the Delhi-based Sun group promoted by the Khemkas and the US-based equity fund management group.

Says Murali, "It is a 50:50 joint venture. A new company has been formed by name Shriram Properties and Infrastructure Limited. The Standard Motors land has been transferred to the new company. We have got the SEZ status for the project from the central government."

The Rs2,500-crore project will have a total built up area of around 5.3-million sq.ft. According to reports, apart from the SEZ the project includes a 5-star hotel, a mall and serviced apartments.

The other mega projects being planned by Shriram Properties are the development of six townships in Chennai, Kolkata and Bangalore. "The total land area will be 1,200 acres and the built up area will be around 50-million sq.ft. The project outlay will be around Rs23,000 crore," says Murali.

The Shriram group will promote the projects in partnership with foreign realty funds. "The group will continue to own Shriram Properties. We will have project wise joint ventures," explains Murali.

He does not find the shift from residential property development to commercial property a major challenge. "We outsource the construction activity. Marketing the property will not be a problem as we have a good brand equity in the market and also have good rapport with multi national companies (MNC) and others," he concludes.

Source: Domain B

Chennai Tech Park to be completed by end-2007

2006-10-13T14:32:00.000-07:00

Chennai Tech Park, the first IT park in the country to be promoted by 100 per cent FDI route would be complete and operational by end-2007.

Disclosing this to the media, S Salai Kumaran, director and COO of India Land and Properties, the promoters, said that the IT Park project would be coming up in 10 acres at Ambattur Industrial Estate, Chennai.

"It will have a total built-up space of 2.5 million sq. ft. making it one of the largest IT park projects in India, designed specially to cater to IT and ITES companies," he said.

Kumaran said the company, which is an Indian subsidiary of a NRI-venture Americorp, would invest about Rs 125 crore of the Rs 375 crore for the project, the rest of which is to be funded through bank funding.

"The two towers - Signature, would be completed in two phases, first one which would be ready by March and the completion of the whole project will be by end-2007," he said.

Kumaran claimed that it would be 'intelligent' building in terms of maintenance and security. It would also be the first IT Park to have an eco-friendly design with Gold Rated Green Building Specifications for user comfort and high-energy efficiency.

Source: DQ Channels