GTM Builders to invest Rs 250 cr on two realty projects

NEW DELHI: Real estate firm GTM Builders and Promoters today said it will invest Rs 250 crore over the next three years to develop two projects and announced signing of cricketer Harbhajan Singh as its brand ambassador.

The company would develop a housing project ‘GTM Greens’, comprising 750 units at Sonepat in Haryana, while a shopping mall-cum-hotel project at Dehradun in Uttarakhand.

“The investment, including land cost, in the housing project would be Rs 150 crore and Rs 100 crore on commercial project,” company’s Chief Executive officer Neeraj Aggarwal told reporters here.

The project cost would be met through internal accruals and advances from customers, he said, adding that construction works on both these projects would start in six months.

For the housing project, GTM has entered into a marketing tie-up with DHFL Property Services Ltd.

“We have got an exclusive right to sell 500 housing units in this project,” DHFL Property Services Ltd Business Head Satish Kulkarni said, adding that group company (DHFL) will give home loan to buyers.

Aggarwal of GTM said that the housing project has been launched at Rs 1,499 per sq ft. In Dehradun, the company would build a shopping mall covering 3,50,000 sq ft and a budget hotel having 104 keys.

Besides real estate, GTM Group is engaged in jewellery and music businesses.

Real Estate Sector Received $2.8 Billion FDI this Fiscal Year

The housing and real estate sector in India witnessed foreign direct investment (FDI) of $2.8 billion in the fiscal year (April-March) 2009-10, according to indian Department of Industrial Policy and Promotion. According to stats reavealed at IndiaHome property exhibition, which concluded in Dubai on Sunday, total NRI FDI inflows through the period April-December 2009-10 stood at $320.05 million. The housing and real estate sector including cineplex, multiplex, integrated townships and commercial complexes etc, attracted a cumulative FDI of $ 8.4 billion from April 2000 to March 2010, the department said.

Indian real estate is poised to enter an accelerated phase of growth in wake of international investors, the likes of US-based Warburg Pincus, Blackstone Group, Broadstreet, Morgan Stanley Real Estate Fund (MSREF), Columbia Endowment Fund, California Public Employees’ Retirement System (CalPERS), Hines, Tishman Speyer, Sam Zell’s Equity International, JP Morgan Partners and Amaranth Advisors, exploring investment opportunities in India. As per industry experts, overseas property sales account for 30 per cent of Indian real estate sector’s total global sales, of which, 40 per cent are accounted by the UAE-based Indians.

Growth is catalysed by the leading cities of India like Delhi, Mumbai and Bangalore, with capital values appreciating 2-5 per cent across the markets. Saru Kaushal, business manager mortgages of Citibank, which presented the IndiaHome exhibition, said that the property market growth of eight to ten per cent has attracted NRIs who want to invest part of their wealth back home in their first, second or retirement home. Townships and integrated-community developments have emerged as preferred investment destinations.

“One interesting thing is that all cities in India are developing with self sufficient localities within the cities so that residents do not have to travel long distances as they find residential, commercial and other facilities within close proximity,” Saru said. The leading real estate developers of India, pioneering the concept of integrated lifestyle community developments have found ready clients with the liquidity rich NRIs.

Harmit Chawla, vice president sales and marketing, Paras Buildtech India, said that supply runs far short of demand. He said that there were only 30,000 apartments ready in 12 months in Noida against the need for 70,000 apartments. Paras offered two projects at the exhibition, Paras Tierea and Paras seasons in Noida and a commercial project, Paras Trade Centre in Gurgaon. Traditionally, the Indian developers focused on the local market. Of-late developers are waking up to the huge potential of the untapped NRI market.

UAE based NRI’s are looking beyond the traditional Indian homes and prefer well-developed and maintained communities that offer modern amenities, leisure and entertainment opportunities within spacious and secure environs. Focus is to strike a balance between luxury and functionality.

Most of the visitors to the IndiaHome exhibition were looking for second homes, holiday homes and retirement homes while the ones looking at upgrading the living spaces of their parents back home, are equally conscious of security. IndiaHome property exhibition addressed specific needs of the UAE based NRI property investors. Effective in-person interaction platform with the representatives of top-notch developers, reputed for offering a global lifestyle and great living experiences, showcased the best residential opportunities available across India.

RBI to Review Monitory Policy on January 25th

The rate sensitive sector stocks – banking, real estate and automobiles are in limelight on the bourses a day ahead of the Reserve Bank of India (RBI) monetary policy review tomorrow, January 25. Most analysts are expecting a 25 basis points (bps) rate hike in both the policy rates—repo and reverse repo. This will take the repo rate, or the rate at which RBI infuses liquidity into the system, to 6.5%, and the reverse repo, or the rate at which the central bank drains liquidity, to 5.5%. One basis point is one-hundredth of a percentage point.

The banking shares have now rallied for six consecutive day after the food inflation fell the second week in a row to 15.52% for the week ended January 8, according to the official data released today. Food inflation, having touched 18.32% for the week ended December 25, had declined to 16.91% on January 1. The BSE, banking index, Bankex the second largest gainer among sectoral indices today, has appreciated almost 6% as compared with less than 2% rise in the benchmark index Sensex in the last six days.

CCIS: 2401 Baring may invest 350cr in Bangalore realty company

BANGALORE: Baring Private Equity Partners India (BPEP), along with some of its international investors, is likely to invest about $75 million, or approximately Rs 350 crore, in the Bangalore-based Century Real Estate.

Baring’s individual commitment to the deal is around $53 million, while overseas investors who are backing the fund may bring in a little over $20 million in additional investment. Industry sources say that Baring has initiated the diligence process. As the realty firm is still working out the commercial terms, sources say the deal could be closed in February. When contacted, Century Real Estate managing director Ravindra Pai did not confirm or deny the development.

The Baring-led investors may pick up around 26% stake in the holding company, which is one of the largest land aggregators with an estimated 3,000 acres of land bank in south India. The investment may be deployed as seed capital to develop multiple townships around Bangalore. E&Y and KPMG are assisting with the due diligence.

Century Real Estate is majority owned by real estate entrepreneur Dayanand Pai and his family. The Manipal Education and Medical Group (MEMG) promoters also have minority investments at SPV (special purpose vehicle) levels.

BPEP, which manages assets worth about $1 billion, issued a term-sheet for a possible investment two months ago, sources added. An alternative possibility of the PE fund investing into an SPV holding a clutch of assets is also being considered. When contacted, a Baring India official refused to comment.

Last year, Century embarked on raising $120-150 million and has held talks with PE investors, including DE Shaw, Apollo Management , Morgan Stanley and Baring. US-based Fortress Capital is an investor in the company, and a part of the $150 million investment was aimed at repaying some of the Fortress investment made through convertible instruments. BPEP, spearheaded by Indian private equity veteran Rahul Bhasin, roped in Varun Batra who headed Citigroup’s real estate investments in India to cut opportunistic deals in this comeback sector.

Century has 14 projects spread across 1.2 million sq ft under various stages of development. The realty company raised Rs 400 crore in debt some six months back to fund its projects. The firm is planning to develop an additional 1.7 million sq ft in the next financial year. It is investing Rs 250 crore in a 68-acre integrated township close to the Bengaluru International Airport. The company has also entered into a management contract with hospitality major Four Seasons to set up a luxury hotel in Bangalore. The project, which broke ground last week, is expected to be completed by 2013. It will also house 100 branded residences, high-end retail stores and commercial complexes.

LICHF arm plans Rs 750 cr realty fundarm plans Rs 750 cr realty fund

MUMBAI: LIC Housing Finance Asset Management Company , a unit of LIC Housing Finance, which figured in the bribes-for-loan scam, is planning a Rs 750-crore real estate fund and is looking for people to manage it.

The company is considering senior executives from Mumbai-based Edelweiss Securities and realtor Tishman Speyers for top positions and candidates from Trikona and realty fund IndiaREIT for the midmanagement level, according to people involved in the recruiting process.

LICHFL Asset Management will raise Rs 500 crore with a greenshoe option of Rs 250 crore through co-sponsors LIC and LIC Housing Finance, who will put in about 20% of the corpus.

“The aim is to tap middle income housing opportunities,” LICHFL Asset Management CEO Arun Goel told ET. “Recruitment is an ongoing process and we will build on the team once the fund is closed and we get into investing.”

Goel said his company had factored in the 2008 crash and the more recent bribes-forloan scam while deciding to launch the fund. He said the fund would target a 22% return.

RBI’s Decision to Hike Policy Rates May Affect Real Estate Sector- JLL

Real estate developers and consultants on Tuesday said RBI’s decision to hike policy rates by 25 basis points will affect the sentiment of the property market, but they do not foresee any major impact on housing demand and prices. “The hike in repo and reverse repo rates by 25 basis points will have a sentimental impact on demand, but it may not slowdown the demand in its actuality,” Jones Lang LaSalle India Chairman and Country Head Anuj Puri said.

Home buyers might delay their decision to own property, which would prolong the completion of the transaction, Puri pointed out. On housing prices, Puri said it would remain stable in the metro cities. Commenting on the RBI’s policy, DLF Group executive director Rajeev Talwar said: “The growth of economy is strong, so we do not expect any negative impact on the property demand and prices”. Talwar said he did not forsee any rise in interest rates. Parsvnath Developer chairman Pradeep Jain said that there could be a short-term impact because of rate hikes but would not have major affect on demand, which is directly related to growth in the economy which is firm.

“As far as rate hike impact on real estate sector is concerned, I see a short-term impact initially which is a normal and routine phenomenon. In fact since March 2010, rates have been increased six times but it has not impacted the demand and growth in the sector significantly,” Jain said. Assotech managing director Sanjeev Srivastava said: “It was expected. This will hurt the sentiments of the property market, but will not have any major impact on demand as housing prices are competitive in many markets including Noida.”

Talwar of DLF noted that the government needs to do much more on the supply side to contain inflation. “The more you try to curb demand and not increase housing supply, the prices would rise in long term”.

Blackstone to Finalise its First Real Estate Deal in India Soon

Blackstone, the global private equity giant based in the US which has a corpus of $9.5 billion, is understood to be closing in on its first real estate deal in India. The private equity fund, present in India with its real estate team for the past three years, is understood to be in discussions with Bangalore-based Embassy Property Development to invest around Rs 200 crore in one of its projects.

Embassy Property Development is understood to be raising private equity even as it is awaiting Securities & Exchange Board of India (SEBI) clearance for a planned public offer of Rs 2,400 crore which is expected during this calendar. The issue is expected to be managed by investment banks UBS, Citigroup, Nomura and Edelweiss. While Blackstone could not be reached for comments, Embassy denied any such plans of raising funds from Blackstone. According to recent reports, Embassy was also in talks with Temasek and HDFC Property Ventures for a $100 million private equity infusion, the status of which is not yet clear