Parsvnath to cut net debt by nearly 60%

MUMBAI: Realtor Parsvnath Developers expects to cut net debt to 7 billion rupees by December as revenues from projects start to flow in, a top official said on Monday.

“We expect the net debt to reduce further in the current financial year, but this would not be substantial. By the end of this calendar year, we expect a substantial reduction to around 700 crore (7 billion rupees),” Chairman Pradeep Jain told Reuters in an interview.

As on Dec. 31, 2010, the company’s net debt was 11 billion rupees, he said, adding the reduction would be affected through internal accruals and revenues from ongoing projects.

The company would also look at increasing property prices in select projects by 5-10 percent across north India . These would be in Delhi, National Capital Region and nearby areas, he said without elaborating. “Earlier, during the slowdown time, prices declined… and now, after the revival, the prices are expected to go up.”

Parsvnath has a land bank of about 195 million square feet (18.12 million sq metres), of which 80 million square feet has been on fast track for completion, he said.

STAKE DILUTION

The New Delhi-based developer is not looking at diluting stake or roping in private equity firms in the company. However, it would continue to look at investments at project levels. “Going forward, if any good opportunity comes, or any good private equity proposals come (at project level), definitely we are happy to look at it. It is not that we are very aggressively looking, and there is nothing expected to be concluded in the short term.”

The company is also planning to develop 4.5 million square feet of residential properties and 0.5 million square feet of commercial ventures on the recently won Railway land. In Nov 2010, Parvsnath had won a bid for 38.3 acres (15.50 hectares). Jain declined to comment on the investments for the project stating it as “confidential”.

The company is waiting for approval for the special purpose vehicle set up for the rail land development in which it is looking at roping in foreign direct investment. The company, however, has already engaged architects and consultants and started work on the project. “I think it would take another two months’ time to work out the planning, which needs to be submitted for approvals.”

Declining to provide an outlook for its Oct-Dec quarter, Jain said “the quarter looks good.” At 3.19 p.m., shares of the company were trading lower by 3.33 percent at 52.20 rupees in a steady Mumbai market.

Over 27-Fold Rise in India Bulls Consolidated Net Profit

Indiabulls Real Estate Ltd today reported more than 27-fold jump in its consolidated net profit to Rs 76.61 crore for the quarter ended December 31, 2010, against Rs 2.76 crore in the year-ago period.

Net sales rose to Rs 399.66 crore in the third quarter of this fiscal from Rs 37.46 crore in the corresponding period of the previous year, Indiabulls Real Estate said in a filing to the Bombay Stock Exchange .

The total expenditure increased sharply to Rs 284.07 crore in the third quarter of 2010-11 fiscal against Rs 72.86 crore in the year-ago period, due to higher expenses on land, plots and constructed properties.

NRI’s Seek Better Policies for More FDI Inflow in Punjab

Punjab needs to follow Gujarat’s lead and improve its “poor” policies if it wants to attract more investment from overseas Indians, NRIs at an investment meet here today said. “I do not see any major schemes or major development from Punjab or the state government which really helps (in getting NRI investments),” said Punjabi NRI Satinder Dhiman, who migrated to the US from Jalandhar 22 years ago.

“It will be logical for the state government to look into it as lot of (NRI) money is out there,” he said at the 8th ‘Punjabi Pravasi Bharatiya Divas-2011′ NRI investors’ meet here, adding that real estate, education, services and IT are the potential sectors where NRI investments could flow in. Another NRI, Mahendra Khari , the President of the International Punjabi Chamber for Service Industry (IPCSI), pointed out that unlike other states like Gujarat, the Punjab government was not efficient in propagating polices or taking initiatives to attract foreign investment.

“In Punjab, they (Punjab government) do not have much PR exercise like Gujarat… I have not seen much support from state functionaries like NRI help centres, professional support, etc.. It (support) is at a personal level (rather) than any other level,” rued Khari, who is based in the UK. The Punjab government, too, thinks there is scope for more investment by NRIs in the state.

“I am not satisfied (with the scale of NRI investment in Punjab)… There is always a room on the top… There is a scope for improvement (in terms of investment)… I want more and more (NRI) investments should flow in the state,” Punjab Industry and Commerce Minister Manoranjan Kalia told reporters here. According to Kalia, Punjab has received Rs 5,000 crore of FDI in the last four years in several sectors.

The state accounts for just 0.42 per cent of the FDI inflows into the country, with the majority of the foreign direct investment witnessed in the manufacturing, warehousing (Bharti-Walmart), IT, real estate and pharma sectors. Though data on the investment by Punjabi NRIs is not yet available, the bulk of their funds went into the IT, real estate, education and agri-processing sectors. The strength of the overseas Punjabi NRI community is estimated at around 10 million, which is mainly concentrated in Britain, North America, South-East Asia and the Middle East.

DLF Delays Plan to Increase Maintenance Fee

DLF has deferred its plan to charge a hiked maintenance fee by three months, with the change likely to be implemented only from April. This decision was taken on Tuesday after RWA representatives told the developer that they would pay more only if they are satisfied and convinced that DLF can meet their expectations. A group of residents from different RWAs would meet the DLF officials next week and submit their demands pertaining to maintenance works in the residential colonies.

It is expected that the revised maintenance fee would be raised from Re 1 per sq yard to around Rs 2.70. Sources said residents’ committees would present a budgeted cost of amenities required in their areas so that the developer can take steps to improve them. Those who attended the meting said that DLF will have to provide desired quality services in the next two months and based on its performance, the RWAs would take a call on the revision of maintenance charges. Participants in the meeting registered their dissatisfaction over the present security and maintenance and suggested that residents should spell out the benchmarks for maintenance in their respective areas.

“We have asked the developer to prove that they are capable of providing quality services and only then we would allow the prices to be hiked,” said one of the participants. R P Singh, a representative from DLF-III RWA said they are ready to pay more, provided the developer ensures good quality services for residents. Sudhir Kapoor, general secretary of DLF City RWA added, “The next meeting will have the representatives with some more concerns of their respective colonies. The maintenance process in the DLF colonies need to be transparent so that residents feel satisfied about the revised fee that they are paying. At present, the maintenance is not satisfactory.”

On their part, the DLF officials reportedly told the RWA representatives that they need to hike the maintenance fee since the cost of everything has increased and even the labour wage, which was Rs 2,300 in 2004, has now increased to Rs 4,400. Parimal Bardhan, president of DLF-I RWA said, “We have told the developer that maintenance and security services are not up to the mark and need a lot of improvement. There has been an agreement that DLF would now join hands with the RWAs and provide quality services.”

Another RWA representative, J C Kapoor, said the developer has admitted that the services are not up to the mark. “We are going to discuss this issue in the next meeting. A committee has been formed by DLF and I, being a member of this committee, will raise the issues of our colony,” he added.

CCI Probe against DLF Gets Compat Approval

The Competition Appellate Tribunal (Compat) today refused to stay the proceedings of the Competition Commission of India (CCI) against real estate major DLF and permitted the competition watchdog to go ahead with its inquiry. DLF had approached Compat against the CCI probe into the complaints raised by some of its customers over alleged “abuse of dominant position” by putting “discriminatory and abusive clauses” in the apartment agreements provided to the allottees of two of its high-profile projects in Gurgaon, Haryana.

Early this month, the Delhi High Court also refused to grant a stay on the CCI investigations against DLF. The petitions before CCI, filed by associations formed by some of the customers of premium residential projects like Park Place and Belaire, complain that DLF failed to deliver the residential projects on time and put “discriminatory and abusive clauses” in the apartment agreements provided to the allottees. It also says the builder is abusing its dominant position in the market.

The two projects are expected to have a total of 2,200 flats, priced between Rs 1.5 crore and Rs 3 crore each, making the total worth of the apartments in the range of Rs 4,500-5,000 crore. The projects, which started in August 2006, were expected to be completed in three years, but the developer extended the deadline to April 2011. The director general (investigations) of CCI, who gave his findings to the commission recently, is known to have endorsed the charges made by the allottees against DLF.

Global property investments to hit $380 bn in 2011

LONDON: Global direct real estate investment is forecast to rise 20 percent this year to $380 billion, led by a sharp rebound in the United States , with total volumes still about half the market’s 2007 peak, a report said.

Investments in commercial real estate, mainly offices, malls, and industrial properties, had reached $316 billion in 2010, a 50 percent jump from an eight-year low of $209 billion in 2009, property consultancy Jones Lang LaSalle said.

Investment volumes soared to $759 billion at the market’s peak in 2007, before the property bubble burst and helped trigger the 2008 global financial crisis.

“Barring further sovereign debt crises or financial shocks, the momentum of 2010 is expected to continue over the next 12 months and we predict global volumes for 2011 should increase by 20 to 25 percent,” said Arthur de Haast, head of the firm’s International Capital Group.

For 2011, Jones Lang expects volumes in the Americas region to jump 40 percent to $135 billion from last year, and for the Europe, Middle East and Africa (EMEA), and Asia Pacific regions to rise by between 10 and 15 percent to $150 billion and $95 billion, respectively.

“The Americas’ recovery has mainly been underpinned by investor interest in core gateway cities like New York, Washington DC, San Francisco and Rio de Janeiro,” said Steve Collins, a Jones Lang managing director.

In the United Kingdom , Europe’s largest market, 2010 volumes were up by 46 percent to $49 billion, as investors targeted London, which is viewed as a transparent and more liquid safe haven from economic and financial uncertainties elsewhere, the consultancy said.

A number of major Asia Pacific markets also posted significant growth in 2010 volumes, including a 219 percent year-on-year jump in Singapore , 77 percent in Australia, 41 percent in China, and a 28 percent in Hong Kong .

Arabian co, Simplex Infra get contract to build World One

MUMBAI: Lodha Developers has awarded civil construction contract of its proposed world’s tallest residential building, World One, to a joint venture of West Asia-based Arabian Construction Company and  The contract is worth 450 crore and is scheduled to be completed in 38 months.

The project at Lower Parel in central Mumbai has been in the news ever since it has been launched in June. There have questions over the status of approvals from the ministry of environment and the director general of civil aviation.

However, according to the company, the construction contract for the tower has been placed as it has received the approvals. “We have all the necessary approvals, including from the ministry of environment and the director general of civil aviation and the construction of World One will kick off from the first week of February,” said Abhisheck Lodha, managing director of Lodha Developers. The DGCA nod is needed because of the builiding’s height.

With a height of 450 metres, World One will surpass the current tallest residential building Q1 at Gold Coast in Australia that is 323 metres high.

Arabian Construction has constructed some of the tallest buildings in the world, including 100-storey Princess Tower and Pentominium in Dubai.

SBI Begins Home Loan Utsav at Bangalore

State Bank of India (SBI) is organizing a three day event called SBI Utsav at the bank’s local head office on St Mark’s Road in Bangalore. The second edition of the loan utsav will be flagged off on Friday. The event is powered by the Times Red Cell.

The bank will showcase a bouquet of home loan products . Around 60 real estate developers /builders and auto dealers will participate in the utsav. The bank is offering a 0.25% concession in interest rate from the fourth year of the home loan if it is availed at the SBI Utsav.

Soundara Kumar, chief general manager (Karnataka) of SBI, said the bank was looking to generate a business of Rs 550-600 crore from the threeday event. “We expect the ticket size of home loans to be in the order of Rs 20-25 lakh. IT professionals and people employed with public sector companies will drive the demand for home loans,” she said.

Those buying flats in real estate projects for which SBI has extended loans can avail home loans in four days. The Utsav is open from 4pm to 7pm on Friday and 11am to 7pm on Saturday and Sunday.

Real Estate Company Rose Valley Files Petition against SEBI at Kolkata High court

Rose Valley Real Estate and Construction Company today moved the Calcutta High Court against market regulator SEBI’s order that prevents it from collecting money from investors or launch any scheme. A SEBI order dated 3 January had asked the company to not to collect money from investors or launch any scheme to dispose of any of its properties as part of its collective investment scheme.

Praying for an injunction on the SEBI order, Rose Valley counsels P C Sen and S Pal submitted before Justice Jayanta Biswas that as the company is not listed in any stock exchanges of the country, SEBI has no jurisdiction to interfere with its affairs. According to their petition, affairs of the company are regulated and administered by the Ministry of Corporate Affairs of the Government of India as provided under the Companies Act, 1956.

The petitioner stated that the method of receiving money for allotting a plot of land to prospective buyers could not be equated to collection of deposit from the public or trading in the securities market.The principal business of the company was real estate promotion and development, they submitted. The petitioner prayed for an injunction on SEBI directing it to quash its January 3 order and not to interfere with the business of the company.

Appearing for SEBI, counsel Hirak Mitra submitted that the company had violated its regulations and that collective investment scheme was a type of collection from the public which SEBI had power to regulate.