Goldman Raise $12 Billion for Property Funds

Bloomberg reports that upto quarter of the funds would be put to use in India and China. So if we do the math 69/12.5 = ~5.5 billion dollars for Indian real estate. What will these guys develop and how will it impact property prices in India is the billion dollar question ??

By Hui-yong Yu

June 20 (Bloomberg) -- Morgan Stanley and Goldman Sachs Group Inc. raised $12 billion for global real estate funds, tapping a surge in investor demand for high-return assets outside the U.S.

Morgan Stanley, the biggest real estate investor among Wall Street banks, said today it raised $8 billion to create the largest global property fund. Goldman drew $4.07 billion for a real estate fund, twice as much as it originally sought.

More than 100 real estate funds may raise a record $69 billion this year as investors seek better returns than stocks and bonds provide, according to Private Equity Intelligence Ltd. Morgan Stanley's high-return real estate funds have posted average annual gains of more than 20 percent since 1991, about twice the return of the Standard & Poor's 500 Index.

``There's clearly still significant capital out there,'' said Stephen Coyle, a managing director and head of Citigroup Real Estate Partners. ``Most funds are fully or oversubscribed today, especially those that have been in the game a long time.''

Rising interest rates in markets including the U.S., Europe, India and Japan, have yet to halt deal making, investors said.

``Borrowing costs are going up globally,'' Citigroup's Coyle said. ``That's creating what may be the first cracks in the market but capital is still seeking real estate and seeking it much more globally than in the U.S. for maybe the first time.''

Other Funds

Blackstone, the New York-based buyout firm set to go public this week, has raised more than $7 billion for its sixth worldwide real estate fund, a pool that investors expect will reach about $10 billion when it closes later this year.

Merrill Lynch & Co., the third-largest securities firm, also plans to raise funds for global real estate purchases, Co- President Ahmass Fakahany said today at a news conference in Dubai, United Arab Emirates.

Morgan Stanley will invest almost half of the money in Japan and about 25 percent in countries including China and India. The securities firm contributed ``just over 20 percent'' of the total equity in the fund and the rest came from institutional and retail investors, the New York-based company said in a statement today.

Morgan Stanley typically borrows $3 to $4 for every $1 raised to increase the funds' buying power and returns.

Goldman got the $4.07 billion for a new fund called Whitehall Street Global Real Estate LP 2007. The sum surpassed the 2005 Whitehall fund of $3.2 billion, according to Gia Morón, a spokeswoman for New York-based Goldman.

Focus on Asia

``The increase we've seen over the past two years has been enormous,'' said Tim Friedman, a spokesman for Private Equity Intelligence, noting that real estate funds raised just $21 billion as recently as 2004. ``A third of all funds being raised by Americans have some focus on Asia and everyone is looking to developing regions for deals that are more profitable.''

Morgan Stanley for the first time will charge 0.25 percent of the value of every acquisition its new fund makes. It's also taking a 20 percent cut of the fund's investment gains as an incentive fee, up from 17 percent previously.

Record fund inflows have allowed the best managers to charge higher fees and helped fuel takeover battles.

Goldman and Morgan Stanley are locked in a fight for two Italian real estate funds, Berenice Fondo Uffici and Tecla Fondo Uffici. Morgan Stanley and Pirelli & C. Real Estate SpA today increased their offer for the funds, trumping a June 18 bid of 782.4 million euros ($1.05 billion) by Goldman and its partner, Union Generale Immobiliare, a company controlled by Italian businessman Francesco Caltagirone.

Blackstone

Blackstone in February outbid Vornado Realty Trust to acquire billionaire Sam Zell's Equity Office Properties Trust for $39 billion including assumed debt in what was the largest real estate buyout.

Coyle said his current investment target is to put 65 percent of assets outside the U.S. and the rest within, the inverse of what it was two years ago as China and other economies grow faster.

``I don't think we're going to see a lot of other $8- to $10 billion funds,'' Coyle said. ``The whole real estate market is probably $20 trillion, soup to nuts.''

Morgan Stanley plans to invest almost half of its new fund in Japan, where the longest expansion since World War II is pushing up rents and creating a building boom in Tokyo. About 25 percent is destined for emerging markets including China and India.

Morgan Stanley

Morgan Stanley has been on an acquisition spree spanning offices, hotels and residential developers. The firm invested $12.5 billion in May alone, agreeing to buy Investa Property Group, Australia's biggest office owner, for A$4.7 billion ($3.9 billion), and Crescent Real Estate Equities Co. in the U.S. for $2.78 billion.

In April, Morgan Stanley agreed to buy 13 hotels in Japan from All Nippon Airways Co. for 281.3 billion yen ($2.4 billion) in what was Japan's largest real estate purchase by an overseas investor. Morgan Stanley also bought 10 hotels in Europe from Hilton Hotels Corp. for 566 million euros ($770 million), adding to its more than 80 hotels worldwide.

Also today, Morgan Stanley said second-quarter profit rose 40 percent, beating analysts' highest estimates, as gains from trading stocks and bonds and fees from investment banking helped the firm overcome a slump in demand for mortgage-related securities.

Morgan Stanley generated $2.9 billion from fixed income, which includes mortgages, even as rising delinquencies on the riskiest home loans curbed demand for mortgage-backed bonds. Goldman and Bear Stearns Cos., the largest underwriter of mortgage-backed securities in 2006, said last week that rising foreclosures reduced their earnings.

To contact the reporter on this story: Hui-yong Yu in Seattle at hyu@bloomberg.net .

Coimbatore land bubble bursts

Chennai prices as an indicator. In some areas prices have quadrupled in 5 years.

After Mumbai, now its Coimbatore. The bubble is deflating faster then expected. The bad news keeps pouring in.

Hindu reports from Coimbatore

our businessmen bought seven acres, located about 10 km from Tirupur for over Rs.1 crore. A real estate broker gave them hope that they could expect a huge income in a couple of months. But nobody has showed any interest in the property in the last six months.
Hardship to businessmen

Half the amount invested in the land got locked up and they could not pay the remainder. It caused a lot of hardship to these businessmen in their day-to-day transactions. It is not a story of single group, but the nightmare of many in Tirupur.
Investors blamed

K.J. Prabakaran of J.S. Promoters estimates nearly Rs.250 crore invested on lands in and around Tirupur is effectively locked now. Even those with good expertise in the land deals invested in land with long term plans. Now they have also been affected. The real estate boom that prompted investors from Tirupur to buy land to a distance of 100 km was at its peak between 2000 and 2005. But it appears that the boom has now burst. Sources in the registration department say that registration of land and agreements has come down in the last two months.

Many realtors say the downturn was expected and in fact overdue for sometime. They blame it on investors who wanted to make quick money by creating artificial demand.

Speculators pushing land costs, hardening interest rates and the fall of the US dollar against the rupee are being attributed as the main reasons for the downturn.

E. Thiagarajan of KRC Constructions said that while real estate was all about property development in metros such as Mumbai, in Tirupur even purchase of agricultural land was labelled as real estate business.

Like others, Mr. Thiagarajan maintains that there is still a good demand for budget houses and plots.

Even now investments on factory buildings and houses are being made based on requirements.

“Those who diverted funds from existing business, investing their surplus funds on land of five to 10 acres around 30 km from the town without any requirement for the same, are now in a spot. In many cases, their regular businesses were affected. Some of them have started selling the land at cost price while some are even incurring losses,” he adds.

Lured by heavy transaction, dozens of small time traders and people from many walks of life played the role of brokers. It was like mushrooming of brokers camping in every other tea shops. Now, their role also has been marginalised.

He, however, insists that transactions are being done now though not on a big scale. Selling the same land to many persons without registering it for a brief period was the trend till recently.

“In every stage, whenever the property changes hand, the value goes up by not less than 20 per cent. This kind of business has come to a standstill,” points out G. Ramasamy of Vasantham Group.

Exuding hope, he further showcases the brighter side of the business: A large number of buyers from all segments are ready to buy plots or houses if the promoter provides necessary infrastructure with quality.

Has the bubble burst in Mumbai ??

Due to cheap availablilty of land, the number of high paying jobs grew in cities like Bangalore, Pune, Hyderabad and Chennai. In these cities one can find a decent apartment for 3k a sq/ft. In Mumbai the corresponding price would be 9k. The Mumbai boom was fueled by cheap credit and black money. End user demand was priced out even at the onset of the boom, when prices were 4k+, which was due to lack of supply. Now with supply outstripping demand several times over, It wont be long before Mumbai prices find their floor at 3-4k a sq/ft. Most builders will sell at the best price they get since they know, the situation could only get worse. Its best for buyers to quote 40% of the value and see if the seller blinks. This market can crash, faster then it went up

Mumbai: The buildings in Mumbai may be soaring higher each passing day, but the property sales charts in the city are experiencing a slump.

Developers are now bending over backwards to make that sale, and are ready to offer huge discounts freebies such as free parking space and stamp duty payments have become commonplace.

In suburbs such as Andheri, Goregaon and Malad builders often offer a 10 to 15 per cent discount on bulk deals. Those discounts could reach 30 or 40 per cent if it will them clinch the deal.

“A builder might quote Rs 10,000 per square foot. But if you sit across the table with money in hand, he will reduce his price by 30 to 40 per cent.” says Bastvi Estates Agent, Rashid Bastvi

Because the sales have fallen, the rate in some cases rates have gone down by 90 percent in the past six months

“In my opinion, overall sales have gone down by 60 to 70 per cent, also in the second-hand property market, sales are down by almost 80 to 90 per cent,” President of Estate Agents Association of India, Yashwant dalal says.

The sales slowdown is playing heavy on the psychology of the developers. Even A-grade developers are now calling on brokers with a hope to turn the sales graphs up. But there is no reason for the common man to get worried, as it is the ideal time to cash in on this real estate market slump.

OMR Road Chennai IT highway of the housing boom

Hyderabad: It's raining homes on Chennai's Old Mahabalipuram Road or OMR as national realty developers are betting big on Chennai's IT highway located in the outskirts of the city. Over 10,000 new apartments are coming up in this place in four major residential townships.

There has been investment to the tune of Rs 4,000 crore in this emerging residential hub. Foreign real estate fund Pacifica Group is investing Rs 1,000 crore in a mixed use township that will have 4,500 apartments to offer. The Hiranandani Group is investing Rs 2,000 crore.

Hyderabad-based developer Lanco has also announced investment worth Rs 600 crore in the area while Bangalore-based Purvankara Group is bringing in Rs 200 crore to build 730 apartments.

These companies are counting on the demand for an estimated 4 lakh IT professionals that Chennai's IT corridor is expected to bring in.

"We think soon it will develop into a full-blown suburb for the city. And what we see in other cities is that people like to walk to work. They don't want to spend much time traveling. That's the reason we feel residential flats have huge potential here," Vikram Agnihotri, Regional Head of Pacifica Group, says.

While the IT influx has been a major attraction, experts of the housing industry say they prefer Chennai to other South Indian cities for development because it does not depend solely on the IT industry.

All this attention has caused land prices in OMR to double within just six months from Rs 15 crore an acre in December last year to nearly Rs 30 crore an acre now.

The first apartment complexes being built here are currently being pre-booked at Rs 4,500 per sq ft and the realty firms which have made huge investments here believe that they will see a 10 to 15 per cent appreciation on this price year on year, making these homes more and more expensive in the days ahead.

Mysore Road-Magadi Road arc to host IT corridor

The new boomtowns in Bangalore

Bangalore: IT majors crying for space in Bangalore can say cheers: a 1,000-acre dedicated hi-tech corridor has been proposed between Magadi Road and Mysore Road for clean industries in the Comprehensive Development Plan (CDP). The corridor will be 17-29 km from the city centre and will house IT and IT-enabled service industries. This will ease the pressure on Whitefield and Electronic City areas, where the IT industries are concentrated.
The corridor was proposed and integrated with the Master Plan 2015 prepared by the Bangalore Development Authority (BDA). It was approved by the state cabinet on Friday. The government has asked the BDA to fast-track this corridor. BDA commissioner M K Shankerlinge Gowda told Sunday Times of India that the Karnataka Industrial Area Development Board will be asked to start land-acquisition process by next week as BDA is to receive revised CDP from the government by then.
The corridor will have tall glass-andsteel skyscrapers, with the CDP allowing vertical growth in this zone. The floor area ratio has been doubled to four now. The additional FAR has been granted as the minimum width of roads stipulated here is 100 ft. “The proposal is to set up 10 integrated townships of 100 acres each with international-standard amenities. They will be developed through a global tendering process. Ten top-of-the-line developers will be short-listed. The concept is plug-and-play for offices, Gowda said.
The BDA doesn’t foresee any land acquisition issues as the corridor area has been marked clean-industry zone. The BDA will share developed land with landowners here. “It’ll be on 60:40 ratio, and land owners will gain,” Gowda said.
The corridor can become an instant hit, say industry pundits. Water, infrastructure and space have been addressed. Dearth of water and infrastructure issues raised by IT industry captains in Whitefield and Electronic City belts have been addressed here.
The Master Plan has drawn up a connectivity network. The existing Bangalore-Mysore four-lane road, Mysore-Bangalore double-track, monorail connectivity, Peripheral Ring Road, Satellite Town Ring Road, BMICP road and NHAI’s proposed Intermediate Ring Road will ensure smooth movement of traffic.
FINDING A NEW HOME
Hi-tech corridor will have 10 integrated parks, each of 100-acre size on either side of a six-lane road
60% area earmarked for residential purposes and guest houses; 37% for office space
3% for commercial development, including shopping malls and multiplexes
What they say
The focus currently is on the southeast quadrant and towards Devanahalli airport. Besides, developing infrastructure along the Mysore Road-Magadi Road corridor is a far cry, considering the delays we are seeing in building the infrastructure to get to the upcoming airport. — Juggy Marwaha, head, sales, RMZ, a commercial property development company
Any initiative to create new infrastructure is welcome. But we need to do it with speed, planning and transparency. — Kris Gopalakrishnan, president, Infosys Technologies
Instead of the government diverting its focus, it should allow the Nandi corridor to be completed. — Mohandas Pai, director, HR, Infosys

Witnessed 30% dip in enquiries in 3 mths: Orbit Corp

30% dip in enquiries translates directly to 30% lower sales assuming that other 70% enquiries convert to sales in a proportional manner. Mr Aggarwal is also not commenting on indicative dip in prices, calling it inappropriate. Ofcourse when the market was jumping by leaps and bounds I'm sure Mr Aggawal would be happy to say prices are up 50% y-o-y. Mr Aggarwal needs to understand that money supply is finite and astronomical apt prices in Mumbai will crash to the earth. Its only a matter of time

Pujit Aggarwal, Managing Director, Orbit Corporation, that the company did witness a dip in the enquiries by about 25-30% and this trend has been there over the last two or three months.

Aggarwal said that due to the fence-sitters' decision about home buying, there is a sudden huge rush for leasing. He added that as the interest rates begin to cool off, many people will go in for purchasing.

Excerpts from CNBC – TV18’s exclusive interview with Pujit Aggarwal:

Q: Are the volumes dipping?

A: We have seen a situation where the volumes have been on the lower side. We have also witnessed a situation where the enquiries are less.

We have witnessed a dip in the enquiries by about 25-30%, which has been the trend over the last two-three months.

Q: From that point of view are developers willing to negotiate on prices?

A: We have not witnessed the trend, where the developers were willing to negotiate with prices. But there were situations when developers are more certainly offering few freebies, like payments of stamp duty, payment of free car-parking, etc. So those were being thrown in with some additional amenities.

Q: Do you see the strength continuing and how much more pressure do you see coming in on contracts or volumes going forward? As you said there has been a dip and price negotiations are getting more selective by the day. What is a trend really going forward, say for the next six months or December?

A: The trend that we have found is that many people are fence-sitters, because of the interest rates going up and prices cooling off in certain parts of the country. I feel that kind of effect percolating down to Mumbai also. So, many buyers have become fence-sitters; they are waiting and watching.

Buying a house is not a decision that one takes impulsively and on the spot. The fence-sitters think what will happen if we take the decision six months later. So, those decisions we feel are being postponed and delayed; they are waiting for the prices to come down. Once the interest rates begin to cool off, we will witness many people going in for purchasing.

Q: If the scenario continues, how much dip in prices do you reckon by December 2007?

A: There would be some developers who would be under pressure in terms of sales going down and their commitments are being hurt. So, it would depend from company to company and how robust their model is.

Q: On an average could you give us a ballpark dip?

A: It would be very inappropriate for me to give any indicative answer.

Q: Coming to demand concentration, where is it more - leasing or outright sale?

A: Lately, what we found is that because of the nature of the buyer-shifting, he has become a fence-sitter. They have chosen to lease for a year and then postpone their decision to buy. So, all of a sudden we are finding that there is a huge rush for leasing. The leasing model is looking very good and attractive. The prices in leasing are going up, but as far as the sales are concerned, the prices are stable or the freebies are being offered for that.

Q: How do you rate the DLF IPO?

A: DLF is one of the finest companies and has a super presence in the country. I highly respect Hiranandani and his group; DLF IPO certainly deserves respect. As a company and moving forward, I would certainly look at DLF issue very nicely and in a very attractive manner.

Q: Has the entry of DLF increased competition in the realty space?

A: Of course, it is most welcome. More competition, more space and more players are healthy for markets.

NRI's and locals pump money into real estate

Financial Times reports

Ashwin Vora, a junior executive at an IT company, has made a down payment for a flat in Kharghar, Mumbai’s newest residential district. He forecasts a profit of 20 per cent over the pre-selling price when the condominium is completed in two years.

N Mahesh, a doctor living in London, has invested a few years’ savings in land to be developed as an IT park. He also owns his parents’ home in India and another property there. Both have nearly doubled in value over the past three years. He is confident that his latest venture will earn at least 40 per cent profit after two years.

The two men are separated by distance and differ in wealth and way of life. But both agree on one thing: there is money to be made at home.

The number of wealthy households is expected to double to 400,000 in three years’ time and the middle class is growing equally rapidly. Similarly, the Indian diaspora has created a large, increasingly wealthy and influential ethnic community in the UK, the Middle East and the US. A major source of remittances and investment inflows, these Indians abroad who earn an average $35,000 annually are responsible for about 20 per cent of foreign direct investment into the country.

A recent HSBC study on the mass affluent in five Asian cities, including Mumbai, revealed three trends that closely mirror investment preferences of non-resident Indians sending funds back home.

Both groups are betting on property, stocks and business ventures.

Choices for the average Indian investor remain relatively limited, so it is not surprising that close to 90 per cent of respondents in the HSBC study still keep their money in rupee savings. However, more options are emerging for both local and non-resident Indians (NRIs) to grow wealth within the country’s borders.

More than 50 per cent of study respondents have bought local property. Three out of 10, perhaps enthused by recent exponential returns in equities and access to more investment instruments, are into the stock market, mutual funds and bonds. Close to a third have taken the entrepreneurial route, aspiring to be the next Ambani, Mittal or Tata.

In terms of aspiration, 27 per cent plan to buy local property and a quarter intend to invest in stocks and bonds to grow their wealth. Nearly half of respondents said they would prefer to use funds to start a business rather than to buy luxury goods, take expensive holidays or secure guaranteed school admissions.

More than $3bn of NRIs’ excess cash is parked in tax-free rupee and foreign currency accounts. These deposits are popular because the funds are freely repatriable and earn excellent deposit rates. More experienced investors are investing in shares of Indian companies through the stock exchange, domestic mutual funds and government.

Opportunities are opening up for the entrepreneurial NRI as direct investment into Indian companies are now permitted in all but a few sectors of the economy. NRIs can also invest in companies, proprietorships and partnerships on the basis they may not repatriate sale proceeds from such investments. These various investments may be made without any prior government approval.

Real estate investments in India, ranging from residential properties to big-ticket real estate projects, are popular for NRIs. New regulations have encouraged overseas Indians to forge strategic alliances with global real estate groups testing the markets.

NRIs can also acquire, by way of purchase, inheritance or gift, any immovable property in India, other than agricultural land, plantation property or farmhouse.

There is now virtually no restriction on NRIs investing in Indian property from funds received through normal banking channels. The Reserve Bank of India has recently done away with the 10-year lock-in period for remittance of sale proceeds of immovable property. Recurring rental income earned on letting out property is also freely repatriable.

Now real estate TV in India

Looks like the HGTV culture is coming to India

BANGALORE: The Rs 4,400 crore Alliance Group will invest Rs 100 crore to launch the country's first 24-hour real estate information channel next month.
"It will provide comprehensive, latest and authentic updates on all aspects of real estate, including infrastructure, to viewers all over the country, the south and south-east Asian region and Gulf states where there is a strong NRI presence," Alliance Chairman and Managing Director Manoj Namburu.
Real Estate TV, a pan-India English-language channel was being put together under the guidance of media personality Sashi Kumar by a team of media professionals led by Chief Operating Officer T K Vibhaker, Namburu said.
With news bureaus and studios in Mumbai, Delhi-NCR, Chennai, Bangalore, Hyderabad and Kolkata, a wide information- gathering network across India, and research and analysis facility in Delhi, Real Estate TV will be "the one-stop shop for anything and everything connected with this industry and the large number of other industries connected to it," said Sashi Kumar

Real estate fund Indiareit to invest in Hinjewadi - Pune

MUMBAI: Ajay Piramal-promoted real estate fund Indiareit on Wednesday said it has signed a JV with Pune-based developer Paranjape Schemes (Construction) to develop one of the largest integrated development projects at Hinjewadi in Pune.

Indiareit would invest Rs 250 crore to develop the project. Ramesh Jogani, CEO and managing director, Indiareit Fund, said, “Out of the total Rs 250 crore, part of the deployment will come from the Indiareit domestic fund and the rest from the Indiareit offshore fund. Private equity fund 3i is an investor in the offshore fund.”

The UK-based 3i had invested over $200 million in the offshore fund. Spread across 138 acres at Hinjewadi, the project envisages a development of IT/ITES special economic zone (SEZ), residential apartment and villas, a retail mall and a star hotel.

The project entails more than 9 million sq feet of development. Shashank Paranjape, managing director, Paranjape Schemes, said, the project would have a market value of more that Rs 3,200 crore.

Govt may curb demand in real estate

Finally Mr Chidambaram wants to reign in the bubble, after the horse has bolted out of the barn. Excessive speculation has resulted in bubbles all over the country with land prices tripling and quadrupling in period of 18-24 months. Cheap loans caused the bubble in residential prices whereas black money is the primary cause of of the surge in land values. Without enforcing strict land revenue and Income-Tax laws black money will continue to funnel the unabated rise in land, thereby forcing apartment buyers to take up loans at these lofty prices.

New Delhi: The Government on Tuesday indicated it intended to curb demand in the “overheated” housing and real estate sectors.

"Intention is to constraint demand in those sectors where there are signs of what you call overheating and example of that could be real estate and housing. I think in these sectors there is reduction in demand," Finance Minister P Chidambaram told reporters.

India’s industrial output increased 13.6 percent in April compared to 9.9 percent in the same month last year, but the Government is concerned that the economy might be overheating.

The Associated Press reports Chidambaram has warned banks against too much lending in real estate, which experts believe is drawing large amounts of speculative money that could result in a property bubble.

Chidambaram, however, said he had no intention of reducing demand in other sectors. The impact of his statement was immediate on Dalal Street, where nearly all the real estate stocks lost value, notwithstanding a modest 48-point gain in the benchmark index.

All realty stocks gained on Monday when the DLF IPO opened for subscription on a strong note. Unitech, the biggest listed real estate firm, saw its shares plummeting by 3.4 per cent or Rs 17.45 to Rs 490.

Another leading realty developer Parsvnath dropped 1.73 per cent to Rs 312.35 on the Bombay Stock Exchange, while stocks like Ansal Properties, D S Kulkarni, Sobha Developers and Atlanta Ltd also fell sharply.

Bangalore HAL airport to continue - Kumarswamy

The K'taka CM has said he will look into continuing operations at the HAL airport.
This is the final nail in the coffin of all those speculators who expected Devanhalli to be the next airport road. Now with high interest rates, strong rupee and already inflated prices, it should be interesting to see how low the prices go in an area with water and electricity woes through out the year. Ofcourse the CM has his hidden agenda to drive speculators towards Bidadi and Ramnagaram, his assembly constituency.

Eight million passengers a year. At an airport around 35 km from the City that’s already battling burgeoning traffic and poor road connectivity. The existing HAL airport is set to close down once the new greenfield airport at Devanahalli starts operations in April 2008. More importantly, with no transition period.
According to aviation industry experts and professionals, the situation warrants two airports in Bangalore, at least till the traffic and facilities are streamlined in the new airport and connectivity issue is addressed. Just 10 months ahead of the new airport, this could be a belated move. But it’s still worth a shot, according to passengers and experts.
Warwick Brady, Chief Operating Officer, Air Deccan, says the airline is for retaining the existing HAL airport for short-haul flights. “With the skyrocketing demand for air travel, the Devanahalli airport operators will more than achieve the projected growth in passenger traffic by 2010. So there is no reason for the HAL airport to be considered a competition,” he says.
BIAL agreement
According to the Union Civil Aviation Ministry’s agreement with Bangalore International Airport Limited (BIAL), no new or existing airport will be permitted to operate as a domestic or international airport within 150 kilometres. The Government is also “committed to equal treatment and non-discrimination of all international airports and to renew the bilateral agreement constantly.”
“HAL had never wanted to close its airport. But the then government decided to go by the demand of the consortium. BIAL was worried that HAL would compete with it and take away its business,” points out C G Krishnadas Nair, former Chairman, HAL.
HAL officials, however, have also maintained that the airport is not top priority in the company’s scheme and that it’s pursuing its own plans, including Maintenance, Repair and Overhauling (MRO) facilities with global players.
A group of domestic carriers had last year conveyed to the State Government the need to retain civil operations in HAL airport.
It was also pointed out that short routes within the State would be hit, when operated from an international airport that has its own stringent security system.
“Road commuters will be the first to feel the heat. It doesn’t make sense to travel for two hours to the airport to catch a 30-minute flight,” says Federation of Karnataka Chambers of Commerce and Industry President R C Purohit.
He adds that some flights should be retained at the HAL airport, at least till a rail link or a dedicated road is established between the City and Devanahalli.
HAL AIRPORT FACTFILE
* The airport is a Government of India aerodrome
* Third busiest airport, after Mumbai and Delhi
* Handles 300 movements everyday
* Handles six million passengers every year
* 266 per cent increase in traffic volume since 2000
* 11 international and 10 domestic carriers operate from here
* Civil aircraft movement accounts for 80 per cent of traffic
(Sourced from The Plane, a magazine published by HAL)
REACTIONS
“Major cities including Mumbai and Delhi have two airports: one for domestic and the other for international flights. There is nothing new in what the IT companies have asked the Government. It goes without saying that the HAL airport has to be retained, because it makes no sense in shutting an operational airport down.
— Indru Wadhwani,
CEO, Mallya Hospital
“I won’t be travelling for two hours to Devanahalli to catch a short flight to Chennai, Kochi or Mangalore. A booming city like Bangalore needs two airports. But neither those who are making a noise against the closure of the HAL airport now nor the media had expressed apprehensions when the government signed the agreement with BIAL. Even now, the agreement could be revised if people pressurise the government. By 2010, the air traffic would not be less than 15 million (per year). The government can convince BIAL that it would get the business it wanted, but a second airport is a must considering the booming traffic.”
— C G Krishnadas Nair,
former Chairman, HAL
“Bangalore is growing at a tremendous pace and the new airport alone can’t cater to the passenger traffic in the coming years. Moreover, a huge investment has already been made into the infrastructure upgrades at the HAL airport. The prudent thing to do is let the HAL airport operate skeletal flights that don’t take more than an hour.”
— P K Mohankumar
General Manager, The Taj West End
“The HAL airport has to be retained. All big cities, including London and New York, have more than one airport. There are three advantages in having multiple airports. Firstly, there will be competition among airports and this, in turn, will ensure better services. Secondly, it helps in segregating air traffic as domestic and international. Thirdly, it gives travellers the option to go to the nearest airport.”
— Capt G R Gopinath,
MD, Deccan Aviation
“The HAL airport has to function for two years after the Devanahalli airport becomes operational, because link roads to the new airport are yet to be developed. At the same time, we need to take note that travelling to the HAL airport during peak traffic hours has become extremely stressful. Even with minimal international operations, the airport is congested. Also, BIAL has made huge investments and unless domestic flights are operated from Devanahalli, it won’t be commercially viable for the consortium. But I do agree that a growing city like ours needs two airports, one exclusively for domestic flights.”
— N R Mohanty,
former Chairman, HAL
“Since most of the IT companies are located in the southern parts of the City, the drive to Devanahalli through heavy traffic is going to be exhausting. This, in turn, will badly affect the employees’ performance. It makes sense to retain the HAL airport and use it exclusively for domestic flights of short duration. We can link the new airport with the HAL airport either through Metro or a tunnel road, so that international travellers who want to board domestic flights can travel hassle-free.”
— Nanda Kumar,
Chief Finance Officer, Honeywell Technology
“What the IT captains have said makes a lot of sense. Imagine a person living in J P Nagar having to travel one and a half hours to reach the new airport, all to take a flight to Chennai. Of course, passengers arriving on international flights to Devanahalli and wanting to take a domestic flight, say, to Mangalore will have to travel a bit to reach the HAL airport. But that’s not reason enough to close the airport down.”
““Personally, I’m of the view that the HAL airport should function till road and rail facilities are provided from the City to Devanahalli. I will discuss the issue with the Union Civil Aviation Minister. It has to be seen whether the agreement (with BIAL) could be reviewed or not. I will do my best.”
— H D Kumaraswamy,
Chief Minister

posted by The Bangalorean @ 6/10/2007 12:51:00 PM 0 comments links to this post
HAL airport: the last-ditch effort

HAL airport: the last-ditch effort
DH News Service, Bangalore:

The onus on retaining civil aviation operations at the HAL airport, even after the new international airport in Devanahalli takes off in April 2008, is back on the State government. Though Chief Minister H D Kumaraswamy has assured a look-in on the proposal, it remains to be seen whether a revision of the agreement between Bangalore International Airport Limited (BIAL) and the Union Ministry for Civil Aviation is possible at this juncture or not.
The agreement says that no airport would be permitted to operate within 150 km from the Devanahalli airport. While government sources say that the chances of a revision are remote, there is a contention that it all depends on how Bangalore’s air passengers mount pressure on the government.
With around 300 movements per day and a passenger volume of six million per year, the HAL airport is already bursting at its seams. However, what the experts point out in favour of retaining the airport — the third busiest in India — is its potential to serve as a supplementary airport, operating domestic flights.

Connectivity
Another issue raised by those who endorse the idea of two airports in the City, is the poor connectivity between the City and Devanahalli.
The National Highway Authority of India (NHAI) has responded to the State’s concerns and is lining up overpasses and service roads on NH 7. However, the Detailed Project Report (DPR) itself is likely to take a year.
According to aviation experts, the Bangalore market offers enough room for two airports. And they point out that two airports also ensure competition to offer better services.
However, they are also concerned about the longevity of the space-strapped HAL airport, as well as the distance international travellers have to take to board connecting domestic flights at the HAL airport, even if the two-airport concept is adopted. The debate has just started.

COMMUTING WORRIES Bangalore's IT firms lobby for two airports

Is this the last straw which breaks the Devanhalli camel's back. If the HAL airport continues to service domestic flights, Devanhalli airport would only service international flights. The total number of international flights per day is probably 30 and most of the them operating at night. If the HAL airport continues to operate, I expect Devenhalli prices to crash by more then 50% if not more. It will be interesting to see Narayan Murthy and Azim Premji driving to Devanhalli while making short day trips to Chennai

Some 10 months from now, Bangalore will get a new airport at Devanahalli, 35 km from the city, but the city's information technology industry wants the state to continue using the current airport for short-haul flights.

"It does not make sense for a person to drive two hours to reach an airport and then take a one-hour flight," said T.V.

Mohandas Pai, director for human resources at Infosys Technologies Ltd, one of the city's flagship software companies.

Civilian air traffic from the existing airport in the city, owned by the public sector defence aircraft maker Hindustan Aeronautics Ltd (HAL), will cease once the new airport being built by Bangalore International Airport Ltd (BIAL) becomes operational according to a concession agreement between the company and the central government.

Spokespersons for the ministry of civil aviation and BIAL said there was no proposal to change or change in the concession agreement between them and that the HAL airport would have to be closed to civilian air traffic once the new airport came up. A change, if any, would happen only after discussions with BIAL and approval from the Union cabinet, said the spokesperson at the ministry. Pai and Infosys chief executive designate S. Gopalakrishnan were part of a delegation led by the National Association of Software and Services Companies, the industry lobby, which met Karnataka chief minister H.D. Kumaraswamy, to discuss infrastructure issues in Bangalore.

The IT industry contributes more than half to Bangalore's net domestic product or over a quarter to Karnataka's gross domestic product. "New York has three airports, London has three airports, why shouldn't Bangalore have two airports.

This (HAL) airport could continue with domestic flights," Pai said.

The IT industry employs over 6.75 lakh people in Bangalore, nearly a tenth of the city's population, and fears the commuting time to the new airport would take longer than the flight duration to destinations such as Chennai.

Kumaraswamy promised to look into their proposal but did not commit to anything, said Mamata Gowda, a spokesperson at the chief minister's office. The chief minister's 20-month term, under an agreement to share power with the Bharatiya Janata Party-he belongs to the JD(S)-ends in September when he is expected to hand over power to a BJP leader.

BIAL is the holding company of a consortium led by Siemens Projects Ventures, a German infrastructure company, Larsen & Toubro Ltd, and Unique Zurich Airport, which operates the international airport at Zurich, Switzerland.

The Karnataka government and the Airports Authority of India each hold a 13% stake in the company.

BIAL expects the airport at Devanahalli to handle around 10.12 million passengers by 2010, in the initial phase of the project and eventually grow to be able to handle 40 million passengers.

The HAL airport, which sees over 165 flights a day, handled over seven million passengers in 2006. "The passenger growth is enormous and both airports can handle the traffic.

Not only short-haul flights, but flights on trunk routes can also be continued (from the existing airport)," said A.K. Saxena, managing director, Bangalore Complex, HAL.

Price correction in Bangalore residence realty

INDIATIMES NEWS NETWORK[ WEDNESDAY, JUNE 06, 2007 01:53:45 PM]
BANGALORE: The much-awaited price correction in the prime residential property market in Bangalore could be around the corner. The demand-supply mismatch in the city, that had fueled the sharp increase in the prices of premium residential property over the last one year, is expected to see a marginal fall thanks to the imminent supply in the market.

The existing demand for premium apartments in prime locations such as Richmond Town, Benson Town, Koramangala , Jayanagar, off M G Road, Cunningham Road, among others is expected to reduce with an increasing number of independent bungalows making way for small premium apartment complexes, according to a survey by real estate consultancy firm Cushman & Wakefield. This may also see the market stabilising in the near future.

With real estate prices surging in the past, the sector attracted huge investments leading to an increase in the number of plotted developments and villa projects in peripheral areas such as Sarjapur Road, Hosur Road, Bannerghatta Road near Jigani, Bellary Road, Doddaballapur Road and Hoskote. The survey states that this additional stock will help feed the current demand and stabilise the continuous rising values, over the next 8 to 12 months.

During the December 2006-May 2007 period, barring a few micromarkets like the Sarjapur Road/Outer Ring Road; Brunton Road/Lavelle Road and the RT Nagar-Yelahanka stretch which saw prices appreciate by over 10%, most pockets clocked a moderate rise in property prices (under 5% in a majority of localities), the survey states.

“The exceedingly high price points and spiraling interest rates during the last six months have contributed to a reduction in interest from speculative investors, resulting in a clear shift to a largely end-user-led demand. More price sensitive locations and developments in certain parts of the city would witness a rationalisation of capital values wherein the market is finally reaching price thresholds and new supply is being infused in the market at high prices,” said, Anurag Mathur, Deputy Managing Director, Cushman & Wakefield, India.

According to the survey, South-East Bangalore will see ample supply in the coming 12-18 months and this may contribute to a marginal correction in these localities. In this context it must be mentioned that the supply situation for villas in the current year in the Whitefield-Sarjapur belt alone stands at 2,500 villas. Approximately 1,40,000 units is expected to be delivered over the next two years.

OFFICE SPACE GETS PRICEY

Owning office space in Bangalore is no easy bargain. Capital value for commercial space in the much sought after central business district (CBD) has gone up by 29% when compared to the previous year, while the non-CBD locations have witnessed a 18% rise, reports M Rochan from Bangalore. According to a report by real estate consultancy firm Cushman & Wakefield, the rate for prime and grade ‘A’ commercial space in the CBD as on April, 2007 stands at Rs 6,200 per sq ft, a 29% increase when compared to April 2006, when it stood at Rs 4402.
“Bangalore as a corporate destination witnessed a boom primarily due to IT and was further fueled by ITeS, R&D and bio tech sectors,” said Anurag Mathur of Cushman & Wakefield.
This growing demand also showed that the quality office absorption in Bangalore stood at 11.42 million in sq ft in 2006 as against 1.08 million sq ft in 1999. Locations outside the CBD like Old Madras Road, C V Raman Nagar, Bannerghatta Road, Indiranagar and Koramangala have witnessed a 18% increase, with the capital value for office space standing Rs 4,500 per sq ft. Similarly, the going rate for office space located on the Peripheral Outer Ring Road is Rs 3,500 per sq ft.

Cauvery stir chokes real estate in Mysore

Mysore, Mar. 30 (OSR)- The Real Estate business, which had witnessed a sudden boom in city some months back, seems to have nose-dived. The realtors attributed it to the Cauvery agitation which began on Feb. 5 soon after the Tribunal delivered its final verdict.

The number of property registrations in the two offices of Sub-Registrars have gone down considerably thus affecting the revenue to the State's exchequer.

The revenue by way of registration and stamp duty, which was Rs. 14 cr. per month in Mysore (North) Sub-Registrar's office and Rs. 6 crore in Mysore (South) dipped to Rs. 8 crore and Rs. 4 crore respectively after the Cauvery stir erupted.

Mysore (South) which registered 1,500 properties per month earlier, could register only 800 properties since the stir began. Officials say that the fall in property registration was due to the ban on the registration of revenue sites and conversion of agriculture land.

Real Estate agents and developers dispute this saying the disturbed atmosphere has hit the market leading the slump in property value.

According to an agent, the property value fell as potential investors from outside are reluctant to do business in Mysore.

Investors from North India, particularly Mumbai, Andhra Pradesh and Tamil Nadu, who were thronging Mysore in anticipation of major industries starting their units here, have backtracked as no miracles are happening here.

When there are no investors, the land value is bound to crash. A 40'x60' site in Vijayanagar, which commanded a price of Rs. 25 lakh in December last is now available for Rs. 20 lakh, recording a fall of 20 per cent.

Relators feel that the crash will continue further if the normalcy is not returned.

Godrej properties plans for the future

Adi B Godrej, is chairman of the Godrej Group, one of India's largest conglomerates, a leading manufacturer of goods and provider of services in a multitude of categories: home appliances, consumer durables, consumer products, industrial products, and agri products and real estate, to name a few. A recent estimate suggests that 400 million people across India use at least one Godrej product every day. The Godrej Group stands in a strong position today with annual sales in excess of US$ 1.4 billion, a workforce of approximately 20,000, and a strong diversified portfolio.
Holding a Master's degree in management from the Massachusetts Institute of Technology, USA, 65-year old Adi Godrej is also recipient of the Rajiv Gandhi Award 2002, the Globoil India Legend 2002 and the Scodet Life Time Achievement Award 2003.
In its 16 years as a focused real estate development company, Godrej Properties Ltd. (GPL) has established a strong presence in the real estate market. The Godrej Group sees its property development business as a major thrust area. The Indian property development sector is already amongst the fastest growing in the world and in the coming decades, is likely to emerge as one of the largest in the world.
What will be the impact of abolishing ULCRA?
The abolition of ULCRA and freeing of FSI are two steps which will allow for dramatic improvement in the availability of housing and making prices more affordable. ULCRA and restrictive FSI in Maharashtra are responsible for the acute shortage of real estate and mismatch in demand and supply in the city. We need to make changes in real estate regulations and modernise them. All big cities are growing taller. For instance the FSI in Mumbai suburbs is 1 and the island city is 1.33. We need to do away with the antiquated laws. For instance in Hyderabad and parts of Kolkata, the permissible FSI is 3 and six respectively. In places like Hong Kong the limit is 10 and in Manhattan 30. It is a chicken and egg situation and we need to go ahead and build taller buildings as well as take care of the infrastructure.
When are you planning for an IPO?
We are looking at an Initial Public Offer [IPO] in the second part of this financial year wherein we expect to dilute 10% of the total value of Godrej Properties. The money will be utilised for our new projects. The exact amount to be raised will depend on the advice from our merchant bankers. Godrej Properties last financial year was Rs 45 crore.
What would be the benefits if Godrej Properties goes public?
We need to raise capital as otherwise Godrej Properties, a private company, will not be able to grow strongly. We will provide for the residential user a very reliable product. All our projects have a great emphasis on environment and ecology. We will devote space to amenities, recreation, sports in every project. As it grows it will benefit both the shareholder and the customer. We will dilute 10% in the first tranche but in future if we require more capital, we have no reservations about diluting further.
What do you think of the regulator's move to make rating of IPOs mandatory?
Whatever moves SEBI takes to ensure transparency is a good move. However the fact remains that the regulator cannot do everything and the investor has to follow the dictum of 'Buyer Beware,' and look into the reputation and track record of the companies they are investing in. We are quite aligned to the SEBI directives.
As opposed to other industries where there is self regulation, why is this weak in the real estate industry, which needs a regulator to enforce things rather than be amenable to self regulation?
Even as there are companies who have established a name for themselves, brands have not become an important part in real estate. Both consumers and investors need to be conscious about this. For instance, Godrej has established itself as a consumer or FMCG brand in nearly every household and the company would not like to cheat on its products which would affect the image of the brand. The same should be the case in real estate.
Is Godrej planning any townships?
We are looking at building such projects in many different cities. There is a strong demand for this kind of housing and this is the only way to create affordable housing in India. Each township would be from 50 acres to 200 acres in metropolitan areas. We have several residential projects in Mumbai and Pune and are currently building a huge gated community in Bangalore. The Project Godrej Woodsman Estate rests in a large 15-acre area and is located enroute to the upcoming international airport due to which the area is witnessing rapid development activity. Godrej Woodsman Estate rests away from the noise and pollution of downtown Bangalore, yet within a 15-minute drive from premium schools, shopping centres and hospitals.
What are your retail plans given the fact that Reliance, Bharati, Tatas and Birlas have made great forays in this direction?
We have three retail models. One is called Life Space, which is essentially a retail store for Godrej's own consumer durables and some allied products of competitiors. We have about 40 such stores across the country. The other model is Aadhar, which is a rural supermarket, where we sell agri inputs, fertilisers, animal feeds; provide agricultural and veterinary services. We also sell services like insurance, medical services, FMCG products, clothing and durables. We have 46 such stores in eight states. By the end of this financial year, we expect to have about 120 stores. The third and latest model is Nature's Basket, which sells fresh fruits, vegetables and other exotic gourmet products. It is an upmarket store and there are currently only six such stores across the city. We plan to expand further.
Your future expansion plans in real estate?
Currently the company has 20 million sq ft under construction. We are looking to doubling this in the next few months. In five years time the real estate business will be our biggest business. Though we have a strong presence in the western region, we also have big projects in Bangalore, Kolkata and Hyderabad. Currently real estate in India is a 300,000 crore per annum business which is growing at 20% per annum. It is a huge industry with rapid growth, the opportunities are great.

Hyderabad prices begin falling

CNBC TV18 reports

Hyderabad's property prices have begun to fall. But the correction will reflect in built up prices a year from now.

Even within city limits, land prices have corrected by 15 %. But shortage of ready-to-occupy property is supporting prices.With more such properties getting on to the market, experts believe a correction is due in a year.
Hyderabad's new international airport will come up in Shamshabad. It is seen as the focal point of Hyderabad's real estate boom, but prices over there are declining.

Land prices in Shamshabad have fallen by up to 35% in the past six months. When the government said it would set up an airport here, several investors rushed in, anticipating large occupied demand; as a result, prices began to rise. Then the occupier demand came in too slowly.

Samit Chopra, National Director-Corporate Solutions, Jones Lang LaSalle said, "The anticipated occupier demand has not come through as quickly and in the quantum that was expected. This has resulted in some slowdown in investment activity, as a result of which, land prices are falling."

Shamshabad's proximity to the new proposed airport made it a natural choice for commercial development. But with the creation of Greater Hyderabad, the government has opened up alternative areas with similar infrastructural facilities and far lower rates.

Experts estimate an absorption of 5-6 million square feet of commercial space in Hyderabad each year, while Greater Hyderabad is expected to throw open 40 million sq ft, in the next three years. Besides, Shamshabad's infrastructure has not developed as quickly as expected.

Chopra adds, "Large occupiers always focus on areas that have good infrastructure and good amenity value. Shamshabad looked like a good location to attract that kind of infrastructure and amenity value. Yet, it has not picked up the pace that was expected."

Even within city limits, land prices have corrected by 15 %. But shortage of ready-to-occupy property is supporting prices.

With more such properties getting on to the market, experts believe a correction is due in a year.

Spotight on Bidadi - Bangalore

Times Of India has 3 articles on Bidadi this Friday. The CM seems to be going full throttle in developing his constituency of Ramnagaram and the greater Bidadi areas. Devanhalli, Whitefield and other fringe areas will take a back seat as all attention is bestowed upon this areas. The articles are below

The proposed integrated townships in Bidadi, Ramanagara, Solur, Sathanur and Nandagudi in the outskirts of Bangalore is a huge initiative taken up by the State Government that's expected to decongest Bangalore and shift some economic activity to the outskirts of the city. It also promises development of residential, commercial, transportation and environmental infrastructure in these areas.
There are also plans to develop the Bangalore-Mysore corridor as a knowledge hub. A major precondition here is that any IT company which is taking space here should necessarily take space for accommodation of its employees. The idea is to see that Bangalore is not clogged. There will be schools, colleges, hospitals and other facilities in this township, thus making it a convenient place to work and live in. Apart from this, a heritage centre at Ramanagara, an industrial centre at Channapatna, an eco-tourism township at Srirangapatna near Mysore and a global apparel village planned in 500 acres of land in Ramanagara would facilitate the growth of manufacturing industry and lead to employment generation. A health city is also coming up in Ramanagara.
The Bidadi Township will be one of the largest townships in the country. The project will serve as a catalyst for community development, employment generation, business opportunities and much more. It will integrate housing with economic activity, making it an attractive investment hub. Development along this corridor will also help arrest rural to urban migration, creating newer markets and recreational facilities and better housing facilities too. With development diverted to these areas of the city's outskirts as well, it is likely to bridge the rural urban divide to a certain extent. When developed, the township will have large and ancillary industries and will provide the right environment to attract and retain talent that's so essential for knowledge-based industries like IT. The total land area is 9,684 acres out of which 2,725 acres are Government land.
A huge film city that's coming up near Bidadi promises to be a one-stop-shop for entertainment, business, movies, food and film production. The film city is approved by the Government of Karnataka and also recognised by the Department of Tourism and Information. Land has been allotted by the Karnataka Industrial Areas Development Board (KIADB).
Scheduled for an opening in 2009, it will be the country's largest 21 cinema multiplex, with digital sound and a seating capacity for 5,000 people. Its state-of-the-art film studio will recognise and boost the universal passion of filmmaking with six mega studios featuring the latest film equipment. The film city will also have an exclusive helipad.
Another major attraction here would be a majestic 80-metre tall tower, with a revolving glass capsule that travels up and down the tower, flaunting a panoramic 360-degeree view of Bangalore city. Resorts, hotels, theme restaurants, food kiosks, a retail park and a snow land will be the other attractive features. It will also house an IT Park and technological centre. The film city project will generate employment for 8,000 people, locally.
Prospects for investors
It is not surprising then, that Bidadi has thrown open huge prospects for investors. Land prices have gone up and there are people who are looking for a second and third home here.
Infrastructure
The Bidadi Township, to be developed on public-private partnership, would be connected via the satellite town ring road and intermediate town ring road as well as radial roads, developed by the Bangalore Metropolitan Region Development Authority (BMRDA). Apart from this, the creation of world class facilities like the Peripheral Ring Road and the Bangalore Mysore Infrastructure Corridor (BMIC) will bring about increased connectivity between the city and its outskirts. Bangalore's IT brigade has also evinced interest in this knowledge corridor.
The satellite town ring roads (STRR), connecting the peripheral towns of Dobbspet, Magadi, Ramanagaram, Kanakapura, Anekal, Attibele, Sarjapura, Hoskote, Devanahalli, and Doddaballapur. The intermediate ring road will connect the intermediate towns of Nelamangala, Tavarekere, Bidadi, Harohalli, Thattekere, Sarjapura, Hoskote, Mallapura, and Aradeshanahalli.
Grade separators and interchanges will be constructed at the junction of the ring roads with national highways, state highways and major district roads. All the roads will have provisions for carrying OFC cables, sanitary lines, telephone cables and electricity cables.

2nd article

Realty boom around integrated townships
The five proposed integrated townships coming up near Bangalore are leading to a steep rise in realty prices in the areas around, says Leena Mudbidri


The successful international 'live, work, play' formula seems to have found a new home in Bangalore in the five integrated townships coming up around the city. The wellplanned townships will be self-contained seamlessly blending civic amenities, commercial spaces and residential layouts within the planned areas. The Rs 30,000 crores mammoth township projects will be at Bidadi on 9,684 acres, Ramanagaram on 4,103 acres, Sathanur on 16,232 acres, Solur on 12,525 acres and Nandagudi on 18,507 acres.
Though these townships will aim to offer almost the same basic conveniences that are available in the city, they will integrate certain economic activities such as manufacturing, service and business categories within the vicinity.
The locations and areas for the proposed townships were identified based on considerations such as least displacement to human habitations, least disturbance to forests and water bodies, least acquisition of valuable agricultural land, lower cost of land, far from existing developed locations and good connectivity.
"What makes the townships unique is, they will be based on integrated land use concepts, centering around one or more specific economic activity with concomitant residential components aimed at promoting workhome relationship", said Sudhir Krishna, BMRDA commissioner recently.
Connectivity to city
The proposed integrated townships will be connected via the Satellite Town Ring Road and Intermediate Town Ring Road as well as other radial roads. The Bangalore-Mysore Infrastructure Corridor - the six-lane expressway to Mysore - too will provide a link from these two cities. Apart from these arterial roads, the townships will have access to both State and National highways, railway stations and the new international airport at Devanahalli.
These arterial roads are being constructed at a cost of Rs 6,000 crores.
Township near
Bidadi
This township is planned on 9,685 acres of land and is located 39 km from Bangalore City and four km from Bidadi on the Bangalore-Mysore highway. It will be close to Electronics City which now hosts over 30,000 workers. It will also be close to the KIADB industrial estates at Harohalli. It is planned as a residential-cumwork environment that will attract people to live and work within their residential areas and also help decongest Bangalore city.
The Bidadi Township would come up in the area comprising villages of Byramangala, Bannigiri, Hosur, K G Gollarapalya, Kanchugaranahalli, Aralalasandra and Kempaiahnapalya Kaval.
Realty boom
The focus of the realty scene will be on the periphery with these five integrated thematic townships coming up. Each of these townships will be built around a specific theme in concordance to the environs. Bidadi Township will be an IT centre. Ramanagara which is a proposed heritage hub will also be an IT centre if the demand from the Bidadi Township spills over. The others will be allocated depending on the demand.
Commercial
development
Being away from the developed zones, the new satellite towns will focus on commercial development and stress will be on improving the local economy by creating more employment opportunities for the people living around these areas.
These satellite towns will have broad interior roads, power, water, sanitation, rain water harvesting facilities along with sewage water treatment plant and solid waste processing unit.
A large integrated development known as Film City is currently under construction at Bidadi. The development is proposed to have a leisurecum-entertainment section, residential area with villas and apartments, retail segment for shopping and commercial component with film studios and a film institute as well. Residential development has been proposed over 14 acres of the project area, and an IT Park will spread across four acres of the project area.
The proposal from a frontranking firm to set up a special economic zone in the textile and apparel sector at Doddamanugudde in Bangalore Rural district, over an area of 150 acres, has received inprinciple approval. A pharma company is also planning a Rs 165 crores campus on 200 acres of land in Bidadi, where it plans to set up an R&D centre.
Residential
development
With so much commercial activity taking place around this township it is only natural for a good scope for residential development to emerge too. "The realty market here is very bullish and presently we foresee potential for around 3,000 to 4,000 high-rise units and expect these figures to rise as the development takes place," says P Praveen Kumar, vice president - South India, consultancy and land advisory, Trammel Crow Meghraj Property Consultants.
Residential development along the belt is characterised by large public and private residential plotted layouts. Residential developments have been proposed by Karnataka Housing Board at Kengeri and Mandya with access from the expressway. Most of the layouts are currently in the development stage and are mostly concentrated in and around Bidadi. Plot sizes vary from 1,200 sqft to 4,000 sqft. Average capital values for plots range from Rs 700 per sqft to Rs 1,150 per sqft. Average capital values for apartments range up to Rs 1,600 per sqft.
Land price hike
Land prices along Bangalore-Mysore Road vary with respect to location. Land prices vary around Rs 3 crores per acre along the peripheral road developed as part of the Bangalore-Mysore Infrastructure Corridor Project. With proposals for development of BMRDA township at Bidadi, land prices in this location has witnessed significant appreciation with prices for converted (residential) land being quoted at approximately Rs 1 crore per acre. However, the proximity of the planned township to Bidadi town as well as its connectivity to the Bangalore-Mysore Infrastructure Corridor Project through the Satellite Ring Road enhances the potential for real estate development in this area. Prices quoted for agricultural land in Ramanagara are in the range of Rs 30 to 35 lakhs per acre. On conversion to non-agricultural use, the value of land would undergo 100 percent appreciation which would translate to approximately Rs 60 to 70 lakhs per acre.

3rd article
‘It will be the biggest IT hub in the country…’
The planned township at Bidadi for the IT sector will be a large-scale integrated development that will have state-of-the-art civic infrastructure, commercial spaces and the required social infrastructure to make it a ‘plug, play, live, learn’ knowledge hub. With 25,000 acres of built-up space, it promises to be a major IT destination. B S Manu Rao speaks to M N Vidyashankar, the State’s IT Secretary, to learn more about this venture


What's the IT agenda for Bangalore with these new townships on the anvil?
These five townships spell a major IT agenda for Bangalore. The Bidadi Township that will be developed first will be the first knowledge hub in the country with over 10,000 acres. There is no other IT park of this size in India. In fact, all IT parks in any given State won't come to 10,000 acres. Here, the concept is more than the usual plug and play. It is plug, play, live and learn. This means all social infrastructure such as educational institutions, parks, and shopping malls, apart from quality housing options, will be available along with the commercial spaces. Any IT organisation buying commercial space here will also have to necessarily buy residential accommodation too, to house their staff. The idea is to ensure selfcontained development so that Bangalore does not get clogged with people working in the knowledge hub in Bidadi staying here and commuting daily. All the heads of the organisations interested in options here like the idea of their staff being able to reach the workplace within five minutes of commuting time, thereby avoiding the travel-related stress.
What sort of infrastructure are you planning in the Bidadi IT Township?
There will be everything under the sun here. From 24/7 water and power to all facilities needed to make living comfortable. This is what makes this IT hub distinct. We are envisaging infrastructure worth Rs 50,000 crores for this township. The land here will be allotted to a private developer who will build the township on a publicprivate partnership formula. The land will be handed over by the BMRDA for development. We have developers from India, Malaysia, Dubai, Singapore, and US in the race. The commercial built-up space available here is 25,000 acres. This should cater to the demand here till 2015 as we estimate.
On the connectivity front, the five townships will be connected to each other and the international airport through the planned Satellite Ring Road. The international airport will be 20 minutes from the Bidadi Township. Once the Metro Rail project is complete, I am sure it can be extended till this township. So in other words, this location has all the advantages of being in Bangalore city.
This will serve as a pilot project in the course of developing the other townships.
What are the prospects of the Bangalore-Mysore knowledge corridor?
Mysore is doing very well in IT. In 2006-07 the city recorded a growth of 90 percent in software exports. It will be a knowledge hub in its own right. The entire belt will be a knowledge hub with all these developments. In fact, we have asked for a non-stop air conditioned chair car train between Bangalore and Mysore. We have proposed to call it IT Express. Two trains in the morning and two in the evening to ferry people from this sector will boost the prospects even further. The railway authorities are looking into this. The travel time will be around 80 minutes only.
What role will the civic infrastructure, international airport and metro rail play in making this an IT hub in the region?
They play a significant role in the development of the city as an IT centre. If the Metro Rail is extended upto the Bidadi project, it will bring it into the city. Metro is a lifeline. The Satellite Ring Road, Peripheral Ring Road and the International Airport are selling points we use.
How does this city rate in terms of global standards as an efficient city for the IT industry?
This city is rated third in the world by global IT players. California is the first and Canada is the second. We see the third highest demand for commercial space from the IT sector in the world. The growth of private equity and venture capital funds flowing in is very high. There are around 1,900 IT sector firms in and around the city.
What will be your selling point at this year's annual Bangalore IT expo?
We will be showcasing all the major infrastructure projects including the knowledge hub at Bidadi. The ring roads, metro rail and international airport are on the list. The theme for this year's expo is innovation. We mean innovation in all spheres - be it software, telecom or networking.
IT Express on the
cards?
The State's IT Department has mooted the idea of two nonstop air conditioned chair car trains between Bangalore and Mysore. They are proposed to be called IT Express. Two trains in the morning and two in the evening to ferry people from this sector will boost the prospects of IT development further all along the Bangalore-Mysore belt apart from in Mysore. The railway authorities are looking into this. The travel time will be around 80 minutes only.
Efficient connectivity
to Mysore
The increased commercial activity between the two cities of Bangalore and Mysore has led to an increased demand for more transport services. Now 12 trains run daily between Bangalore and Mysore. A staggering two lakh people commute between Bangalore and Mysore every day. 1,000 buses from both public and private sectors ferry commuters between Bangalore and Mysore daily. Also, 500 tourist buses operate on the Bangalore-Mysore-Ootacamund route every day.

Property values in an unequal city(Chennai)

South Chennai is the favoured Cinderella while north Chennai is forgotten and overlooked, write Swahilya and A. SRIVATSAN

Startling contrast: Property values between north Chennai.

If you can imagine land prices in Chennai in the form of peaks and pits, then south Chennai would appear as the peak and north Chennai the pit. South Chennai is the favoured Cinderella and the preferred destination of development while north Chennai is like the ugly sister, forgotten and overlooked. Properties and rentals in north Chennai have not grown as much as the south. If the lack of development and attention continues, north Chennai would slide even further. Many un derstand that the real estate market prefer only high profit yielding locations and overlooks north Chennai. But what disappoints and angers the residents is that the proposed draft second master plan too has nothing much to offer.

The land price at Royapuram is Rs. 25 lakhs per ground, at Kaladipet and Tiruvottriyur it is Rs. 20 lakhs per ground (2400 sq.ft). The rent for even the most sophisticated apartment or house of 1000 sq.ft is only Rs.3,500. In places like V.O.C. Nagar in Tondiarpet, there are many numbers of houses having just one room and kitchen, something that is not built anymore in south Chennai. There are many tenements as small as 400 sq.ft, which are rented for Rs. 500 to 600 per month. In contrast, the property values in Adyar, Thiruvanmiyur, Besant Nagar and along the ECR and OMR have hit the rooftop.

The lands in these areas are priced between Rs. 80 lakhs and one crore a ground. An apartment of about 1000 sq.ft fetches nothing less than Rs.10,000.

In the imagination of the planners and authorities North Chennai is an industrial and commercial hub. But it is seldom realised that it is a thickly populated area. In places like Tondiarpet and Basin Bridge there are about 7.8 lakh people living under a high density of about 280 persons per hectare. These areas are annually growing at a low rate of about 1.5 per cent, while south Chennai is growing at an average rate of 3 to 5 per cent. "In North Chennai, life continues despite problems because the people adjust themselves to their surroundings," Mr. Ernest Paul, acting president of the Royapuram Residents Welfare association, says. The upper and upper middle classes afford a rent of Rs. 10,000 but the numbers are very few. The majority that stays in North Chennai belongs to the middle and lower middle classes.” He thinks that the land value and rentals are lower in North Chennai, because of problems of pollution - automobile and industry, iron ore and coal dust from the harbour and garbage.
Economic hub

There are leading doctors and directors of big companies who reside in North Chennai, the reason is because they stay close to their industries or hospitals and not because they wish to stay there. However, they send their children to the more famous schools on Santhome, MRC Nagar and Egmore. There is a complaint from residents that there are no proper hotels, no premier shopping complexes or marriage halls with car park facilities. Besides the Sir Theagaraya College and Bharathi Womens’ College, there are no other colleges of arts and science and engineering for the residents of North Chennai.

For many years, North Chennai with Georgetown as its centre was the thriving residential and trading place. During the sixties and seventies, most of the industrial projects were located here and the place continued to serve as the economic hub of the city. The harbour, Central station and the road connection with the northern and western States made it a favourable location. This was reflected in the land prices and even as recent as 1980’s land prices were fairly high and almost even with the south. Since the beginning of the 1990’s the importance of north Chennai declined. In the new scheme of things South Chennai is the icon of the global city, while North Chennai is considered an industrial backyard.
Decongestion

Photo: S.S.Kumar

South Chennai leaves yawning gap.

As a part of the first Master plan for Chennai, proposals were made to decongest Georgetown by shifting the vegetable and fruit wholesale market to Koyambedu and the iron and steel market to Sathangadu.

A truck terminal was constructed at Madhavaram to relieve the roads from heavy lorry and bus traffic. The markets have been shifted, but the area has not been significantly improved. For instance, the demand of parking spaces is 1.5 to 2 times the supply. In place of markets, port activities have increased. About Rs 55,000 crores worth of trade is done through the port (2003-2004 figures).

The Chennai Port Trust has proposed to invest about Rs.418 crores over a period of 5 years (2004-09). In addition, Ennore port is to be expanded and Rs. 1026 crores is to be invested here. As a result, new tank terminals, LPG terminals and metallurgical coke and power plants will soon be built in and around Ennore.

Unlike the investments in South Chennai, the proposed developments do not push the property prices. This is because the investments are made only on industries that have high impact on the environment. The infrastructure is developed primarily to support the industrial activity. There are hardly any proposal to improve the housing conditions and supply. The proposed economic activities will employ more of blue-collar workers and the private market is not interested in providing housing for them.

The second master plan too is silent on housing and leaves the responsibility to TNHB. The plan is also silent on how it envisages reducing the density of north Chennai.

It appears that the city benefits from the polluting industries of North Chennai, but in return it has not offered much to the place.

In the recently held public discussion on Master plan, a north Chennai resident wanted to know why IT corridors are not planned in North Chennai. The authorities replied that the North Chennai lacked infrastructure and human resources.

That exactly is the complaint of the residents. What they seek is a comprehensive development proposal that would improve the quality of life.

Gone with the loan

Hindu reports on the high cost of loans

Banks run after you, giving colourful reasons for you to take their home loans. You oblige. Then they hike EMI at will. You wish you hadn’t obliged. But then it’s too late, writes M.L. MELLY MAITREYI

These are trying times for home loan consumers. The frequent increase in the interest rates on the loans, which saw a jump of 4 to 5 per cent in the last couple of years, had the domestic budgets of borrowers going for a toss.

And what’s more, the borrower is caught unawares by the quantum jump in the Equated Monthly Instalment (EMI) which can literally plunge a middle/salaried class household into a financial crisis.

The dream of acquiring a house which materialised thanks to the competitive interest rates and pro-active approach of banks and housing finance companies not long ago, suddenly turned into a nightmare with the inflated EMI eating into the substantial part of the salary.

Narendra Kumar, who had taken a ICICI Home loan in 2004 at a floating interest rate of 7.5 per cent, now pays much more.

“During the last few years the interest had been revised several times. The tenure was increased to two years resulting in an additional burden of Rs.6 lakhs. Recently my EMI was hiked by Rs. 9,000 with no prior notice or information. And a penalty is slapped for not keeping enough balance when it is time for electronic transfer,” says an exasperated Mr. Kumar.
Amateurish

This is an unfair and amateurish way of dealing with the customers, he adds, wondering why banks, housing finance institutions do not explain all the implications and pitfalls of the loan agreement to the customers in the first place.

“It is not feasible to have a buffer amount to meet a sudden increase in EMI as incomes in most sectors do not match up to interest hikes,” concurs T. Ramarao who too is reeling under the impact of sudden hike in EMI by HDFC.

“Earlier, the EMI amounted to one-third of my take home pay. Now it has gone up to 60 per cent of it with the interest rate going up from 8.5 to 11 per cent. Forget about luxuries, even spending on essentials is becoming difficult,” he says.

In the 1980s, it used to be quite tedious and frustrating to get home loan sanctioned and the process was time-consuming. Now the problems begin once the loan is availed, quips another consumer.

This is particularly so with the private bankers who went aggressive in promoting home loan business with competitive interest rates.

Jayaprakash of Tata Teleservices got a loan in August last year at a floating rate of 9.25 with an EMI of Rs.13,500 for a tenure of 20 years. Now, in less than an year, the interest has gone up to about 12 per cent, EMI to Rs.15,000 and tenure to 25 years.

But the ICICI Home Loans puts the ball in the RBI court and suggested he could pay up Rs.2.5 lakhs of principal to retain the same EMI and tenure. “I did it at the cost of other important expenditure,” says Mr. Jayaprakash who is now seriously considering switching over his loan to SBI or LIC Housing.
Liquidity problem

According to SBI sources, home loans were given at competitive rates with the expectations that interest rates would not change. But with the frequent revision of interest rates, three times within one year by private banks and two times by SBI, all banks now face a fund crunch.

With the call money market rates increasing and fall in deposits, banks face liquidity problem.

With the increase in deposit interest rates, service charges had gone up and margins had come down, necessitating hike in home loan rates.

Many, taking advantage of low interest rates, had gone for a second home loan to get IT exemption. With the hike in interest rate, such plans have been shelved. Even first time home buyers have put their plans on hold, affecting the real estate market.
No choice

However, bankers say they have no choice other than increasing the EMI as the tenure cannot be increased beyond a point. Rising interest rates have also meant eligibility criteria going down by as much as 21 per cent in the case of ICICI Bank alone, the biggest mortgage player in the market.

The Reserve Bank is reportedly working out modalities to bring some relief to home loan borrowers by stating that revision in interest rates should not apply to loans below Rs. 20 lakhs.

But 90 per cent of home loans are below that mark, making it difficult for banks even to consider the proposal.

Little wonder then that most banks expect growth in the home loan business to be not more than 25 per cent this year, the lowest in five years.

DLF to pump Rs 4,000cr in Bangalore realty and 1800 in Chennai

BS Reporter / Bangalore June 5, 2007
The property market in Bangalore is set to get hotter with the entry of DLF, which plans to build 10,000 residential apartment units in the city. The real estate major is also building a 2 million sq ft mall in the state capital.

According to an announcement made by the company today, an investment of Rs 3,000 crore, in developing the apartments coming up over 100 acres, is planned. "We have about 80 acres of land on Bannerghatta Road and 20 in Electronics City," A S Minocha, chairman, DLF Commercial Developers, said. According to Minocha, work on the project will start in the next three to four months, and the first set of apartments would be ready in two years.

Work on the mall, which is coming up in Whitefield, has already begun and will be open for commercial use in about 18 months, Minocha said. DLF, which is a late entrant in the real estate sector in Bangalore, is investing Rs 1,000 crore in the mall. The mall is likely to be one of the biggest in the country.

The company said they were also looking at buying land to develop office buildings in the city.

The projects are part of the proposed investment plans of DLF. The company intends to fund the projects through the Rs 9,500 crore public issue which opens on June 11, 2007.

DLF is expected to raise Rs 8,750 crore to Rs 9,650 crore through its public issue of 17.5 crore equity shars this month. Of the net proceeds of the issue, the company would pump in around Rs 3,500 crore for developing existing projects while the same size of funds would be utilised for acquiring lands and developments rights for new projects.

A major chunk of money raised through the public issue is expected to be injected in its existing projects in Gurgoan, Chennai, Hyderabad and Bangalore. In addition to the two new housing projects in Bangalore, he said the company would also launch another apartment project in Chennai.

DLF has already acquired 130 acres in OMR Road in Chennai to construct 6,000-7,000 apartments with an estimated investment of Rs 1,800 crore.

Chennai land prices costlier than London

The bubble is exported to the farmlands of the United Kingdom. Globalization in reverse causes the formation of the West India company. Ace is expecting a return of 4x in 2 years. If people are so foolish, they surely need to be parted with their money

CHENNAI: 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, told PTI.
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.
"He (customer) could then have a look at all the transaction and ownership details of the land. Once registered in his name, we will have a unique account in the government department UK Land Registry's website, which he can access from here also," he said, adding unlike in India, owners need not worry about encroachments as the land laws are strict there.
The customer can sell it off as and when the prices appreciate or construct a house, for which he has to reside in the UK for four to five years.

Santhanraman claimed that the appreciation of real estate prices in the UK was excellent. "We have been keeping track of the prices and it is projected to appreciate 300-400 per cent in two years."

The company was also coming up with similar projects in Dubai and New Zealand.
Ace would soon announce the sale of 1000 sq ft flats in Dubai at the rate of 25-30 lakh, he said adding, the firm has associated itself with some of the leading developers in Dubai like Emaar Highrise and Damac Properties for the purpose.
Another project is an enclave of seven bungalows in New Zealand, construction of which were underway.
"The appreciation of prices in New Zealand stand at 15-20 per cent", he added.
According to Santhanraman, the company was receiving good response to the London project after an advertisement was put up in a leading newspaper. He hoped to sell out all the plots in London within a month.
"The demand for real estate is so high here and the prices in London are so tempting when compared to sky-rocketing land prices in India, especially in Chennai," he said.
Echoing his view, R V Sundar, a senior official of leading developer Ceebros said that the buying capacity of Indians, especially IT professionals, has pushed the real estate prices in the country to new highs.
"During the past one-and-a half year, the prices escalated at a rate of more than 50 per cent. Even a 4000 sq ft plot in the Chennai suburbs will cost you around Rs 40 lakh," he said.
The shortage of lands within the city areas has also contributed to the price rise, he added.
With real-estate prices in Indian cities escalating and becoming out of reach for the middle class people, cities like London and Dubai seem to come in handy for them, quipped Santhanraman.

Mumbai may see land price correction

Business Standard reports

Raghavendra Kamath / Mumbai June 4, 2007
Land prices in some parts of Mumbai could a correction of up to 25 per cent, if the new initiatives planned by the Maharashtra government to improve land supply in the city fructify.

Repeal of the Urban Land Ceiling Act (ULCA), redevelopment of Dharavi, salt pan redevelopment and a new housing policy with incentives for rental housing and carpet area norms are among some of the new initiatives planned to increase the supply of land.

According to a study by international property consultant Knight Frank, the per-capita land availability for housing in Mumbai is 103 sq feet, which is one-tenth of international standards.

The study pointed out that out of the 475.07 sq km land mass in Mumbai, only 120.55 sq km is available for housing, which forms 25. 26 per cent of the total.


CORRECTIVE STEPS

Measure


Land to be freed


Expected price correction

ULCRA


25,000 acres


25-30 per cent

Dharavi redev


360 acres


25 per cent

Salt pan redev


5,500 acres


15-20 per cent

The first signs of a slow down in prices have already emerged after redevelopment of Dharavi was announced.

With this projecct, expected to cost Rs 9,300 crore the government aims to develop 14 million sq feet of commercial space and 30 million sq feet of residential space in the next seven years.

The industry experts believe that once developed, the area could have a cooling effect on the surrounding areas including the Bandra Kurla Complex, Sion Bandra, Khar and Santacruz.

According to Knight Frank chairman,Pranay Vakil, the mere announcement of Dharavi redevelopment itself would have a salutary effect on the sobering of prices. "You would see the impact on prices in 7-8 days. Even in Bandra Kurla Complex (BKC), where prices go up to as high as Rs 30,000 per sq ft the prices could slump to Rs 7,000 per sq ft”

The next major factor which could contribute to land supply is repeal of Urban Land Ceiling and Regulation Act (ULCRA) in the monsoon session of the legislature. Mumbai alongwith its suburbs could see around 25,000 acres of land being freed up for development.

Industry analysts expect a 25 per cent-30 per cent price correction when this kind of land supply hits the market. "If this happens, there will be a slowdown in property prices. Since there is acute shortage of land, developers will benefit," says Rajesh Mehta, chairman, Raha Realtors.

Salt pan land redevelopment is also expected to free up 5,500 acres of land in the island city and could see a correction of up to 15 per cent-20 per cent in surrounding areas. Salt pan land exists in Vikhorli, Kanjurmarg, Trombay, Bhandup etc.

Maharashtra Chamber of Housing Industry president Mohan Deshmukh believes that the measures could yield the results in two years time. "Today not much land is available for developers due to multiple approvals, ULCRA, salt pans, Rent Control Act and so on. The crucial factor is that you can not increase the land but the demand for it is growing.”

He added that the government should increase the land supply by repealing the ULCRA and amending the Rent Control Act."

If the state government announces amendments to the housing policy with incentives for rental housing and carpet area norms, nearly 100,000 housing units could be freed up and 500,000 people could get housing.

"If the government amends the Rent Control Act, people will come forward to give their houses on rent; it could lessen the demand for housing and indirectly have a impact on spiralling prices," said Deshmukh.

Though the Confederation of Real Estate Developers' Associations of India (CREDAI) president RS Ajmera denies any major correction in prices across the city, he believes that in the areas where supply is released, prices could correct.