Thursday, December 03, 2009

Dubai links with Indian real estate developers are closer then they appear

It appears that some Indian real estate developers are funded by black money from India which is illegally taken out of India through hawala channels and then subsequently bought back into the country thru legal FDI investments.
This process of whitewashing leaves no stains and by that virtue seems to be the model method of black money conversion. If Koda as the enforecment directorate claims funnelled 700 crores back, how many smaller transactions are waiting to be uncovered, only if the ED has time and funds to investigate. India is plagued by a gazillion scams and this one is just beginning to unfold. Its no surprise that Dubai which houses the infamous Don is at the epicenter of this investigation.
Pioneer reports
Koda routed loot through Emaar
Ex-CM diverted money for tribal welfare to Dubai real estate giant The money that was supposed to be used for the welfare of tribals of Jharkhand has been ‘diverted’ to the Commonwealth Games projects by former State Chief Minister Madhu Koda. The investigating agencies finally got a lead on the hawala transactions made by Koda, currently under arrest for scam of over Rs 4,000 crore.Koda aides are alleged to have siphoned huge money from the State coffers to Dubai, which has been channeled back ironically to propel a major Commonwealth Games project — the Games Village — through the Dubai-based real estate developer Emaar MGF, which started operations in India just about four years ago and has become one of the ‘leading’ real estate developers.Well-placed sources in the Enforcement Directorate told The Pioneer that the directorate has clues about monetary transactions between Koda and Emaar MGF, which is building projects for the 2010 Games also besides several other investments. Emaar MGF is developing the residential complex for the participants of the Games on the banks of Yamuna. After a protracted and not-free-from-controversy tendering process, the Delhi Development Authority (DDA) awarded the project of Games Villages behind the Akshardham Temple to the Emaar MGF last year. The ED on Thursday raided the offices of Emaar MGF and homes of several board members in and around Delhi in connection with the multi-crore money laundering scam involving the former Jharkhand Chief Minister.

37 comments:

Anonymous said...

The comments to stories used to be 40 50, Now they are reduced to 9 6 and 7 .
This blog is dying its natural death.
BB - Are you back from Dubai? You screwed this blog man.

Anonymous said...

The comment is an indicator of the surrender of most buyers..So when people feel that RE is going to forever keep strengthening, that's the time for a correction. All this makes me very hopeful...the end for RE is close at hand. Also, the sudden demise of sundaas bhai is also an indication..

Anonymous said...

ssundaas bhai aka BB was never one entity that posted comments on this blog. MAny of the comments of BB sounded different, had different sentence formation, different tones.

It had everything to suggest that comments were being posted by different people with same login.
Blog owners had to create an Anti or a RE bull so that the tuff can go on between bears and bulls and get traffic on the blog.

BB concept has lost its charm now, Personally want to see what new the blog owners bring out to revive people's interest.

Shriniwas K said...

@ All Anonymous.
Chill no one is making any money on this blog. Those ads hardly pay 20 or 30 cents per month. You cant even buy milk in India with present food inflation of 17.5 %

There is difference between housing and commercial real estate market - India's commercial property is going to fall flat on its face - China is also in middle of big Housing bubble but dont know about Chinese Commercial real estate.

The problem is that because of inflation in India where milk, rice and sugar in India cost more than that in US, people are more worried of their daily livelihood than investing or purchasing property.

This is exactly what happened in 1994-95 when RE got out of reach. The few who bought say upward trend only in 2002 end

Anonymous said...

People have resigned to the fact that there are no major gains to be made on property purchases. The interest rate component will suck all your profits. Given the economic crisis and job losses risk has become a four letter word. The only shoe left to drop is with the builders who are holding on to inventory with the hope that some sucker will fall for for their piece of crap. There are always good buys in the market but those will goto the big fish or those connected to the builders.

Anonymous said...

"Extend and pretend" programme of expansion and extension of Home Buyer credit is not helping to artificially pop up the housing market. The Home Prices continue to decline.

Toll Net Loss Widens as Revenue Falls More Than Costs

Bloomberg.com

By John Gittelsohn and Peter Woodifield

Tax Credit

The company doesn’t expect an increase in sales as a result of the government’s expansion of a federal tax credit to include people who already own homes, Chief Executive Officer Robert Toll said today on a conference call.

“I don’t think we’ve seen a tax bump,” said Toll, whose customers are rarely first-time buyers.

Toll’s forecast paints an overly bleak picture, Carl Reichardt, an analyst with Wells Fargo Securities LLC in San Francisco, said in a note after the earnings release. The company is being “conservative” in its outlook, he said. He upgraded the stock to “outperform” from “market perform” on Nov. 11.

“We believe it may take some time for Americans to regain confidence in our economy, their job status and the benefits of home ownership,” CEO Toll said in the statement. “Currently, we anticipate a gradual recovery in housing, similar to the one that occurred over several years coming out of the last recession in the early 1990s.”

Foreclosures

New house construction in the U.S. has been hurt by increasing numbers of foreclosed properties coming onto the market. Two million homeowners who were paying their mortgage at the end of 2008 entered the foreclosure process in the first 10 months of this year, Lender Processing Services Inc. reported yesterday.

Anonymous said...

Bubble Symmetry

Jayant said...

The Realty Check

Business World, 05 Dec 2009

The proposed real estate regulation Bill could change the way the sector works

Anjuli Bhargava

Foreign cheap money

For three years (2004-07), a heady mix of unchecked growth and expansion, huge inflows of money and unscrupulous practices permitted the sector to enjoy rates of return way beyond any other. Returns of 100-200 per cent on projects were not unheard of. Developers were not keen to work on a project unless it promised astronomically high returns.

Indian companies have — at least for now — been rescued by banks in India , and buyers have not been hurt too badly. But in Dubai, many buyers are likely to suffer,

Call for strong regulation

The call for strong regulation is echoed by many. Sachin Sandhir, who heads independent regulatory body Royal Institute of Chartered Surveyors India, says regulation is essential in India where he fears “another bubble is rebuilding” even before the last one is fully over. “Regulation is very much needed. Buyers currently have no recourse, and this would be an alternative redress mechanism.”

Bigger Is No Better

Not everyone, however, agrees that established players are any better. In fact, a number of complaints are against well-known developers. And one does not need to look far for examples. In Gurgaon, developers such as DLF and Unitech have come under fire for delayed projects, changes in specifications and not providing even the basic facilities. “I used to be an advocate of Unitech, but now if someone paid me to buy Unitech properties, I would not,” says Rakesh Seth, managing director of marketing solutions firm Finedge India. He has invested in a few Unitech projects, all of which are delayed by over two years.

Basic, essential amenities

Worse than delays are cases where residents are forced to live without basic, essential amenities. Mukul Deva, managing director of MSD Securities, who stayed in Unitech’s Uniworld Garden in Gurgaon, found to his horror that trucks came in every night to the chic complex to remove the day’s sewage. The complex, where flats cost more than Rs 1 crore, does not have basic sanitation, he says. It was one of the reasons why Deva decided to move out of not only Gurgaon but India — he is now based in Singapore.

Anonymous said...

The developers are in deep manure! One can see how under manure they are by seeing how much they are hurrying to the QIP/FCCB route to raise funds..they are leveraged to the hilt and beyond. In fact the lever is about to break or has broken. A lot of them are beyond redemption. Housing prices are static for now...but the edifice on which these prices are built are brittle and buckling. It should not be long before we see a complete collapse...

One indiahousingbubble indicator is the sudden disappearance of sundaas bhai! I think sundaas bhai was behind the murder of the pune developer...sundaas bhai used to claim that he has over invested(no doubt through debt financing)in Pune. Also sundaas bhai was capable of anything to make a profit...I am sure of this!

Jayant said...

Greedy lenders "You" have taken the "common" borrowers for a ride and destroyed their life savings via various deceitful ways in collusion with various Government machineries. Now is the time for "You" to get screwed up Big Time. Noose around your neck is tightening.


Dubai assets could be 'untouchable', lawyers warn embattled bondholders

By Louise Armitstead
Published: 7:04PM GMT 03 Dec 2009

The bondholders are waiting to hear about Dubai World's plans to restructure $26bn (£15.7bn) of debt, including $6bn in its Nakheel property subsidiary.

Nakheel, which owns some of Dubai's most ambitious projects, including the Palm Islands, issued over half of its debt in the form of a $3.5bn sukuk, or Islamic bond. It was the sukuk's December 14 due date that prompted last week's standstill announcement.

Lawyers have warned that the rules governing sukuks can be muddling. Shaikh Muddassir Siddiqui, head of Islamic finance at Denton Wilde Sapte, said any default of the loan would be governed by sharia laws but added:

"Each jurisdiction approaches the sharia elements of financial structures in different ways, according to the requirements of its own law. Neither debtor nor creditor should assume that a single interpretation of the sharia principles shall be applied universally just because the structure has been determined to be sharia-compliant."

Essam al-Tamimi, senior partner at Al Tamimi and Company, a Dubai-based law firm, said: "The UAE courts will order everyone to pay their debt, you, me and the ruler, we are all equal under the law. But when it comes to government debt, following the issuing of the judgment... like in a lot of countries, the attachment of government assets and selling them by public auction is not allowed. "

Anonymous said...

I think this silence is the calm bfore the storm. Real estate is sinking day after day, all know it and now feel it as well :)

Wait for a while and see what happens in next two quarters.
Lot more to come....!!!!

Anonymous said...

Vik,

I think you should call BB back or this site will die very soon.

Venkatesh Babu K R said...

Anonymous,

Reduction in number of comments doesn't mean reduction in number of viewers of this blog. Vik has done a nice job by starting this blog and keeping people updated about all issues related to real-estate. I'm sure this blog has good number of viewers.

Anonymous said...

true, but we need participation and views and not just eyeballs for this site to survive. Vik i think you must get back this character BB.

Venkateswaran K Iyer said...

I for one read this blog every day. I dont necessarily post, because I have said what I had to say.

Others have also said what they had to say. Now it is a question of seeing the actual events unfold - which is taking place at glacial speeds.

A collapse or a rebound will require 6 months to materialise. What to write for such a long time?

Except abuse BB?

In the meantime, I have greatly profitted by the links posted by various members.

For example I started participating in Property discussion forum after following a link posted by (I think) Shriniwas. A very good discussion forum. I dont know if there is any other such site?

Also, "Of two minds" link was posted recently. A very insightful blog indeed (posted above as bubble symmetry)

So keep the links and posts coming, members, they are highly appreciated.

As for Dubai, it is the lenders whose money is being screwed out of them. Dubai has its sky scrapers and will keep them - 5 years from now when oil price is in the stratosphere, Dubai RE will also deliver the goods.

Being govt owned, there will be no distress sale in Dubai to depress prices. So the lenders will just have to swallow their medicine, that is all.

Commercial RE in USA is a more important indicator. Dubai is a non-event

Venkat ND

Venkateswaran K Iyer said...

(As posted elsewhere)

I dont know about Pune, but in Delhi, prices are up by 5% every 3 months for the last 6-9 months, total around 10-15% up.

Jaypee sold 5000 flats in Kosmos in3 months flat. Their office was like a mela and people were buying flats like aloo-pyaz at a mandi. That too after JP already sold 2000 flats of Klassic from May to September.

Another 5000 flats were sold by 3C lotus boulevard, Amarpali, GC etc in NOIDA.

Some 15000 flats were sold by Gurgaon builders in 3 months with a price bump up of 15-20%.

One way builders hiked price was ingenious. They sold a carpet area of 900 sf as 1200 sf super area during the slow down in MArch 09, and sold out in 1 month. The same 900 sf carpet area plan was slightly changed to 950 sf but packaged as 1500 sf super area and were still sold out.

That way builder effected a 20% price hike by fooling the customers, although the per sf area was kept the same (at 2400 psf)

Mind you - that rate is on a superb expressway, 10 minutes from an international airport and with metro connectivity - you Pune people are being really bilked by these builders, going by the rates you all are posting for a second tier city, although with superb weather)

Anyway, price decrease is a dream that we buyers like to indulge in. It will never happen. RE in developed countries may crash, where supply exeeds population.

In India, supply is far less than demand, as personally witnessed by me in Delhi and detailed above. Plateau for 3 years and a relentless rise to astronomical levels after 10 years is my prediction.

Venkat ND

Venkateswaran K Iyer said...
This comment has been removed by the author.
Venkateswaran K Iyer said...
This comment has been removed by the author.
Venkateswaran K Iyer said...

http://economictimes.indiatimes.com/articleshow/5306325.cms

Anonymous said...

Hi Vashi hunter here ....
Sorry to say but my hunt for last 6 months saw only price up.../
Where is your 6000 sensex and 70% correction
In fact no Good clean 2 BHK in sanpada for 45 L Forget Chembur...
And I am selling my property in Kharghar , 1 BHK in spaghetti ..now having 25-30 quereies on behalf of 4-5 free ads.
Anyway if anyone having 2 BHK in Millenium sanpada for 45-46 L dcontact immidiatly ( my mail is below) also interested in kharghar proprty ( I cannot sell asap as my purchase here needs to be cofirmed) please contact on
mumbai10000@gmail.com

Anonymous said...

Vik,

You need to get Sundas Bahi or else this site will get loose its value. The name of BB in one day has almost brought in 20 comments till now. Kindly request Sundas to comment.

Shriniwas K said...

I got a decent deal of 2750 psf in Baner hills in Pune. It was 4000+ in peak in 2007 mid and 3200 now. The Pune Municipal corp has fixed rates there, so it cant go below that rate. I have been checking prices since 2004-05. The lowest it should have gone was 2300-2400 but it didnt so I just bought at 2700. My friends bought in Baner for 2500-2800 and Wakad for 2400-2300. Both have excellent access to Expressway and also good connectivity to Pune and also have decent amenities. I bargained a lot for 2500 but since mine was town house, the builder didnt budge, he said flat prices are reduced because the builder then does not provide parking if he drops rate. I did not want to waste time for 200 psf so finally bought it.

Anonymous said...

Congrats Shriniwas. So how much area did you buy? Is it construction linked?

Venkat ND

Bindaas Bhai said...

This dubai economic blow is much much smaller then US economic blow. If indian real estate can survive US blow.... this dubai issue is nothing. Remember, In spite US mess up Mumbai real estate prices have gone up.

Buy now or buy after 2 years for 200 % price.


Bindas bhai

Shriniwas K said...

@Venkat, I got ready possession and abt 2200 sqfeet ish. My parents get to move right away. Iwant Kothrud to come down to 3500 from present day 4500 - that area is definitely in a bubble. Nobody is able to sell there as people quickly pick up cheaper neighborhoods... I honestly think the bubble in the suburbs is over and Government of india is pumping money into system via 6th pay commission. If you dont buy, the govt officers will buy ... THey not only have salary, they also have 2nd income ;) ... However buy only if you are going to live in house.

Anonymous said...

Venkat ND

You are a Big Liar.

I stay on rent in Noida where 3C amrapali and Jaypee are coming up with there projects in Sec 117 and 127.

You said that all of them are sold. Bullshit. 7 months back Amrapali was unable to sell their flats and till date are still selling.

THIS SUNDAY I WAS INVITED BY 3C and AMPRAPALI REPRESENTIVES TO SEE THE SAMPLE FLATS. PURCHASE DIRECTLY FROM BUILDER. NOT RESALE. THERE IS HARDLY ANY SALE IN LAST 7 MONTHS In 3C and AMPRAPALI. I VISITED THEIR SITE an LAND HAS NOT EVEN BEEN DIGGED PROPERLY.

Guys Venkat D looks like a Broker. Don't FALL into the TRAP.

Anonymous said...

Govt. Salaries will never be able to match those of private sector.

A 36 year old Govt. officer gets 26,000 take home pay after 6th pay commission. While same guy in a private sector makes more than a lakh.

I don't think they have purchasing power enough to purchase a flat which even I-bankers are finding unable to afford.

All this theory is a farce.

Shriniwas K said...

@Bindaas Bhai,

Dubai blow is not a joke. The UAE dirham has already lost 10% value. If Abudhabi chucks Dubai and the Sheik fails to sell anything, Dubai property which already has no takers will go the exact way US foreclosure/forsaken homes are as the people wont pay rent/EMI if the property value falls below the loan amount outstanding.

There are very few people left who will buy in Dubai. Maybe you should pick something up. At least we can counter those Pakistanis who are using Dubai to train terrorists against India, US and Israel.

Venkateswaran K Iyer said...

@ Anon 10.25

Amarpali Saphire (1200 flats) in Sector 46 is sold out except for top floor flats. It was mostly bought by public sector employee bulk booking. YOu must be talking about Amarpali Pan oasis in sector 70, which is recently launched, has sold 60% of flats already. Amarpali Platinum in Sector 117 is a premium project and is selling half finished flats at 3600 psf. It remains 50% 5 after 1 year.

I have no idea which of the 3 Amarpali projects in NOIDA not was selling 7 months ago - must be platinum - but nothing was selling then. JP Klassic sold nothing for 6months, then sold out in 3 months from May to September.

3C is sold out till tower 26. More than 1000 flats. Price was 3075 psf. Now company has launched tower 27 at 3275 psf, from 3rd December. There are still 6 towers kept reserved which 3C will keep launching slowly. They continue to sell in Espacia, also in the same area.

Jaypee has sold 4000 out of 5000 Kosmos. Klassic (1700 flats) also sold out. Only top floor flats are left - in Kosmos 80 towers with 6-8 flats per tower, that itself is about 500 for 17th (top) floor, which nobody will buy.

3C does not do direct selling. You must have been contacted by Unicon or Investors clinic who are the underwriters for the project.

Pan Oasis is also being heavily sold by Investors CLinic. I suspect that it was they who must have contacted you.

Digging for 3C towers 1-6 has been completed. They had promised 2 year delivery (less floors than subsequent towers). Digging for other towers with 3 years delivery is yet to start.

Digging for JP Kosmos is half way thru. No digging for Kosmos, since they are still selling the remaining 1000 flats.

I never said they were digging, only that bookings are sold out. In Delhi there is no concept of Penthouse, top floor flats are unsold in initial booking. They are sold later with heavy discount.

Know your facts before you talk. Otherwise you only expose your own ignorance - despite living in NOIDA. You sound like a renter who missed the bus - you could have picked up Kosmos in September at 2725 with another 10% discount, but failed to do so. Now it is 2975psf with 6.75% discount max. The entire project has been underwritten by a Singapore consortium and the broker discounts have dried up.

I also missed the NOIDA bus.

By the way I am not a broker but a buyer - a doctor by profession.

I am not in the habit of telling lies.

Venkat ND

Venkateswaran K Iyer said...

@ Shriniwas,

2750 psf is a reasonable price anywhere in India for a good quality high rise condo, already build. Cheapest price is probably 2200 psf for a high rise, average quality (1800 for unbuilt).

I have no idea about Pune, but Baner hills sounds like a cool and pleasant place. Is it close to where you work or have good connectivity?

Is the price all inclusive or does it exclude parking, club and development charges?

Anyway, congrats again.

@Anon 10.29

Govt servants got 2-5 lakhs arrears. That is why they can get their hands on booking amount. Rest, they are credit worthy for bank loans, sanction is not a problem (unlike in private sector where there is risk of job loss). They are usually older than 36 when they book flats, usually around 50.

After last 5th pay commission, they booked in Dwarka and Sohna road, Gurgaon. And got 4-600% appreciation in 10 years.

They will always book when a lump sum arrears is given to them. Other times they cannot afford it.

Venkat ND

Anonymous said...

Venkat D

I guess you have been mislead by the Brokers of Sales agents at Amrapali and Jaypee

The only respectable contsruction has been done by Eldeco in Sec-117

The Jaypee and Amrapali have NOT BEEN SOLD.

Just 25 flats were bulk booked by NTPC people because they have been given discount.

Vikash a sales agent of Amprapali is contacting my company with a scheme where in he will given flat 10% discount for bulk bookings.

Same offer has been brought in by Jaypee.

You have not missed the bus. This is just a plan to create artificial shortage.

You are not a salesman, so I can understand your frustration.

Just tell me if everything has been sold why are the Jaypees, 3C , Amrapali are daily placing camps in companies like HCL, CSC, NIIT ,EXL etc.? One company had some 40 people interested asked builder to promise posession by delivery date and wanted a bank guarantee of 10% of amount paid by its employees as penalty in case there is a delay. Their representatives couldn't give that!
Now imagine if this can happen to such a big company will these builder be able to deliver the flats.
They are all castles in air.

Doctor saab use your brain sometimes. Usage of Brain is its best medicine :)

Don't spread rumours without proper study on this forum. I know how much screwed up the builders are in this

Venkateswaran K Iyer said...

Anon,

why dont you check out the buyers forum for 3C and get an idea of the booking status?

http://groups.google.co.in/group/3c-lotus-boulevard

And discussion on NOIDA flats at another forum?

http://www.indianrealestateforum.com

Remember, information is money. And wrong information is ....... what?

Venkat ND

Anonymous said...

Venkat D

I trust real ground state scenarios rather that these blogs and discussion forums. 99% of people who write on these blogs and forums have not even talked to builders broker buyers, forget visiting the construction sites and understanding the market.

And why are you so frustrated?

If you feel that you have missed the bus on Noida , meet me at Vinny's Sec-18 . I can get you a deal directly from the builder at 2750 3C, construction linked 2250 at one time payment. They are all available.

You are just trying to create panic over here.

Send me ur id if you want to meet.
And behave like a doctor not a mentally challenged patient.

Venkateswaran K Iyer said...

If you can get me 2750 construction linked at 3C, I am ready to book immediately.

But I know you will find that it is top floor!

Which nobody buys.

Otherwise, tower 27 of 3C sold out in one day, except top floor, at 3275 with 6% discount.

Now no more booking is available.

These are facts. Your denial will not change them. I am ready to bet anything - say I'll eat my hat - that you are getting only top floor of 3C from your Vinnys.

(try using a better broker by the way).

I am not frustrated, I missed the bus in May 2009 for NOIDA, it is a fact that cannot be changed (there have been many other buses, I dont always miss all of them).

I dont need help for NOIDA in Dec 2009, I know the market inside out. From innumerable ground visits this past 6 months.

Which you obviously do not.

I doubt if you have even visited the sites of 3C and JP going by your grossly incorrect statements made earlier.

If I was taking your exam, you would have failed the course.

Venkat ND

rajni sharma said...
This comment has been removed by the author.
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sam gupta said...

thakns for sahring this valuable inforamtion Dubai’s office property space still waits expectantly for a lift from Expo 2020, in the hope that the upturn would come off sooner.India tops the number of foreign investors and investment transactions in Dubai's real estate market, according to the organisers of a leading property
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