Friday, October 10, 2008

Bldrs tread cautiously on realty street

Bldrs tread cautiously on realty street
Nauzer Bharucha | TNN

Mumbai: Some of the tastefully done-up stalls at the property exhibition at Bandra-Kurla Complex (BKC) are as large as one-bedroom apartments. Smart marketing girls move around with glazed brochures, pitching upcoming residential projects to prospective home buyers.
In the adjoining seminar hall, there is much bonhomie among the assembled builders, gorging on a lavish vegetarian spread. To many, it may seem to be business as usual for Mumbai’s property czars. But behind the broad smiles is a growing concern about the stormy days ahead.
The construction industry is suddenly down in the dumps and builders are still unwilling to say when they will relent and reduce prices. But across the city, massive cranes, which were once swinging at frenzied pace, have slowed down considerably.
“Developers have drastically cut down work on their under-construction projects. For instance, if a builder was laying one slab a month, the pace has slowed down to one slab in three months. When flats are no longer selling as briskly as they used to, there is little point in speeding up construction work,’’ a leading builder confessed privately to this newspaper recently.
Some of them are also believed to have postponed launching new projects. Banks and financial institutions have also turned on the screws. A couple of years ago, they stopped lending money to builders for land acquisition. Now, even loans for construction has virtually come to a halt since the past three months, industry sources said. “Banks have become extremely choosy about lending money to builders,’’ they said.
In the residential segment, prices in some of the upscale projects coming up in Malad and Goregaon are in the range of Rs 9,000 to Rs 10,500 a sq ft. In Juhu, the rate is anywhere between Rs 15,000 a sq ft to Rs 21,000 a sq ft in upcoming projects. In south Mumbai, there is an eyeball to eyeball confrontation between buyers and sellers of premium apartments. “The seller is still adamant and refuses to lower the price, while the buyer is still not falling for it. In the past six months, the same flats which were put up for sale are still circulating in the market,’’ said a CEO of a real estate company, not wishing to be identified.
At Pedder Road, a builder who has just finished an upscale apartment block, is finding no takers. “He has been demanding a whopping Rs 80 crore for each apartment, which is spread over 8,000 sq ft super built up area. Not a single unit has been sold at this price,’’ said market sources.
“Confronted by a bleak scenario, builders are twiddling their thumbs and waiting for the real estate market to revive,’’ said an insider. A handful of developers who are sitting on large chunks of land since many years, and who have little exposure to banks, are in a comfortable position at present. The rest are finding the going tough while some who had purchased land at unrealistically high rates, are finding the noose tightening.
According to the market grapevine, the brother of a prominent developer from the eastern suburbs, who has branched out on his own now, is stuck after a US-based bank allegedly stopped funding his projects in Hyderabad and Chennai. Another developer with residential projects in Goregaon, Virar and Thane finds himself pushed into a corner after taking a Rs 100 crore loan from a Kutchi industrialist at hefty interest rate of over 40%.
One builder, who shook the property market last year after he paid a phenomenallyhigh price for a plot in BKC, is also believed to be now on the edge. “His investors are breathing down his neck and even the nationalised bank which funded him, now wants its money back. His desperation is now evident because he has started offering brokers a 4% brokerage for getting clients,’’ said sources.
In the commercial segment, the lease rental prices in BKC has come down from an average of Rs 450 a sq ft to Rs 325-Rs 350 a sq ft over the past three months, it is learnt. “Developers setting up IT parks are also getting worried as they are not getting the price they were expecting,’’ said a broker.
According to housing experts, about $4 billion has been pumped into the Indian real estate market by FIIs and venture capital funds. Another $12 to $14 billion was to flow in within the next 18 months. This will not come any more.

Wednesday, October 08, 2008

Pune : Kondwa gets a bad name

With prices over 4000 per sq/ft here on the outskirts of Pune, Kondwa seems to be the new terror hub

Kondhwa: Pune's emerging terror nest
8 Oct 2008, 0344 hrs IST,TNN

PUNE: The arrests of four suspected Indian Mujahideen (IM) members from the Kondhwa area of Pune and the revelation that they had used a plush fla
t at Ashoka Mews to fine-tune their plans to send terror emails and hack into WiFi networks has left local residents shocked.

"This is unfortunate. We are feeling insecure. This is giving a bad name to the entire Kondhwa area," said B Nair, a senior citizen who stays in a building near Ashoka Mews, a complex which houses 12 buildings and 28 row houses.

Another resident, Shrilekha Menon, said that she had purchased a flat in Kondhwa three years ago as the area was peaceful then. "But now we are feeling uncomfortable and may shift," she said.

Her fears are not unwarranted. This is the second time in the last couple of months that the police have arrested suspects from Kondhwa for their alleged terror links. On August 16, one of the three youths picked up by the Anti-Terrorism Squad was from Kondhwa. Police have questioned several others in the area.

In August, Pune police commissioner Satyapal Singh had said that the number of suspected Simi activists in the city had increased from 47 to 300. Though Singh had not revealed the pockets and areas from where these activists were thought to operate, police sources said that a majority of them were located in Kondhwa.

"We are concerned by this grouping of Simi activists in one locality. Earlier, they were scattered at Kasewadi, Bhavani Peth and Kondhwa. Now a majority of them have shifted their base to Kondhwa," said a senior police officer.

The officer said that there could be several reasons, including cheaper rentals and, until recently, weaker surveillance.

Speaking to TOI on Monday, deputy commissioner of police (DCP) Jalindar Supekar (zone IV) said that two special teams comprising 10 policemen each from the Kondhwa and Hadapsar police stations have been formed to look for suspected Simi activists taking shelter in places like Kondhwa.

The teams, formed three days ago, are headed by senior police inspector R B Gaikar, who is in charge of the Kondhwa police station. The activities of the teams, which started functioning from Sunday evening, will be supervised by Supekar and assistant commissioner of police (ACP) Ramesh Biwal (Wanowrie division).

According to Supekar, the team has been given a special task of identifying suspected Simi activists, keeping a tab on their movements and collecting intelligence.

Biwal confirmed that the Mumbai crime branch and Bangalore police had earlier visited Kondhwa for questioning suspected SIMI activists, but he claimed that the outcome of the interrogation was not known because no information was shared with the city police.

Tuesday, October 07, 2008

Shah Rukh glamor doomed in the Gulf

Shah Rukh Khan or SRK needs to start reading this blog :). Sabbal Seshu and Ashish will get him black money rich clients for his high end gulf properties. Alas Mr SRK you might be a good businessman with Knight Riders and IPL, however this one is destined to end up 'deserted'.

Bollywood Star Hopes Glamour Will Rub Off on Gulf Properties

By Ayesha Daya
Enlarge Image/Details

Oct. 7 (Bloomberg) -- Shah Rukh Khan, the star of Bollywood hits such as ``Om Shanti Om'' and ``Chak De India,'' hopes his glamour will rub off on the real-estate fortunes of a little-known Gulf emirate.

Khan will help Ras Al Khaimah, a rocky outcrop of 168 square kilometers (65 square miles) and 250,000 people, to sell an 8 billion-dirham ($2.2 billion) beachfront development that will include an underwater disco and lounge. He presented the project, called Shah Rukh Khan Boulevard, in Dubai on Oct 5.

``I'm a believer in a place where things grow fast,'' Khan, who has visited Ras Al Khaimah only once, said in an interview after the briefing. Khan, 42, has endorsed products ranging from PepsiCo Inc. soft drinks to Hyundai Motor Co. cars.

Ras Al Khaimah, the most northerly of the seven sheikhdoms in the United Arab Emirates, aims to emulate Dubai, whose booming property market has attracted endorsements from celebrities including Brad Pitt and Boris Becker. The developer, TSA Group, is trying to lure foreign investors including Khan's fans from the Indian diaspora.

As oil and gas reserves dwindle, the emirate hopes tourism will generate independent sources of income and supplement contributions from hydrocarbon-rich Abu Dhabi that provide basic infrastructure, power and public services.

The Shah Rukh Khan Boulevard will be built on the man-made Dana Island that is being developed by the government's real estate unit Rakeen. The Boulevard will comprise townhouses and ten towers spread across an area of 600,000 square feet and is due to be completed in 2012.

Design Ideas

Khan has offered design ideas for the project, such as a glass gate at the entrance and big screens on the beach where people can watch movies, besides the underwater attractions.

``For me, this is the first step to have the freedom to express myself in stone,'' said Khan, who isn't planning any other developments. The Mumbai-based actor will start filming ``My Name is Khan'' on Dec. 15.

Khan said the project won't be hampered by a slump in the local real estate market brought on by the global financial crisis and the prospect of a worldwide recession. ``This is not the first time I'm experiencing recessions,'' the actor said, adding that the project won't be ready for another five years.

In Dubai, Brad Pitt is helping to design an 800-room hotel and resort with Zabeel Properties, while towers have been named after former Wimbledon tennis champion Boris Becker and ex-Formula One driver Michael Schumacher.

Dubai's other projects include a 1-kilometer-tall tower and surrounding developments that will cost about $40 billion, a 300- island project in the shape of continents called The World, and the world's biggest mall.

Dubai Real Estate

Home prices in Dubai, the second-biggest of the country's emirates after Abu Dhabi, are likely to remain little-changed until 2010 after five years of gains, Colliers CRE Plc said in a report Oct. 5. Emaar Properties PJSC, the Middle East's biggest publicly traded real-estate company, lost the most since 2000 on Oct. 5 on concern that the U.S. bank bailout won't prevent the global credit crisis from reaching Dubai.

``There is very little to go on with regards to the fundamentals behind the Ras Al Khaimah market,'' said Robert McKinnon, managing director of equity research at Al Mal Capital PSC. ``But I do expect it would correct along with the rest of the U.A.E.'' if this happens.