Lodha Group to invest Rs 900 crore in Hyderabad sky villas

Lodha Group, a Mumbai-based developer of luxury apartments and homes, plans to roll out sky villas in Hyderabad with an initial investment of Rs 900 crore. Despite recession in the financial markets, the group is developing sky villas, called Lodha Bellezza, which are themed on Californian style living and where the ownership comes by ‘By invitation only’. The company, according to a senior official, is planning to develop 150 villas in this project.

R Karthik, senior vice-president, Lodha Group said, “For the first phase of this project, which is expected to be completed by 2011, the company will invest Rs 900 crore. Meanwhile, these sky villas will be priced at around Rs 2.5 crore where in the premium living concept is being introduced in the South. There is also the option of furnished apartment which will cost about Rs 95 lakh to Rs 1 crore more.”

Asked if they see themselves revising prices due to current market slowdown, Karthik said that they do not have any plans to do so as the villas are very competitively priced.

Lodha Group has invested Rs 280 crore to acquire 12.9 acres in 2007 located near the Hitec City(Next to Malaysian Township) , where the company is creating upmarket housing facility. The project would have 45 floors or otherwise called as sky villas wherein each villa would occupy an entire floor with a private pool, sun deck, home theatre lounge, office and a concierge on call.

“Lodha Bellezza, which is through a partnership between the Lodha group and HDFC Ventures, (HDFC has 40 per cent stake in the project) is the outcome of revolutionizing the premium realty space and redefining the luxury space in the country,” Karthik said.

Meanwhile, the group is also targeting the mid-tier segment with a project to come up in Mumbai. Besides, it is looking to set up a destination mall, claimed to be the largest mall development in the country, which is scheduled for launch in the first quarter of 2010.

“We are evaluating mid-tier apartments to cater to a different segment in Mumbai and other cities. Also, within six months, we will finalise plans for a mega destination mall in Hyderabad,” Karthik added.

The company is also mulling over an additional 300 million sq ft which is still under planning stage to be delivered in the next five years. Also on the cards in Hyderabad is its Lodha iThink, technopak campuses which is still on the drawing board.

The group has one among the largest land banks in the country with over 27 million sq ft currently under development.

Second Sales in touch MarketConditions - Few Tips

If you are in a tough real estate market and are looking to sell your home quickly, you might want to consider doing a For Sale By Owner.

Here are a few tips if you are considering a FSBO in a less than ideal real estate market. 

1. With sales down, real estate agents are desperate to earn a commission. By putting the house in the MLS you are agreeing that if an agent brings a buyer to you that you will pay the agent their part of the commission (you still save the listing agents commission). If you can sell the house on your own with no agent then you won’t have to pay an agent. However, in a tough market you want as many possible eyes on your property as possible.

 2. Get the word out to as many places as possible about your house. One of the best places to do this is on the internet. There are dozens of free websites that will allow you to post your house for free. Consider starting with Makaan,MajicBricks,Sulekha since they has so much traffic and then spread out to the other sites on the net. It will probably take you an entire evening to get the house posted on all the sites and you will want to keep a spreadsheet with your usernames and passwords so that you can go back later and remove the listing once the house sells. 

3. Design a professional looking flyer and put out for sale by owner signs and a flyer box. If you aren’t the artistic type and don’t know that much about designing things like flyers consider a site like vflyer which will give you templates for designing a flyer. Take some good pictures of the house with your digital camera and put them on the flyer. If you use Vflyer or a program like it you can probably use the same template to post the house to craigslist and ebay (if you decide to pay for a listing). 

4. Be creative. When we put our house on the market we ordered an eight foot full color printed banner to put on our fence. Our house backed to a major street and we were able to get some major exposure from the banner. I have heard of people offering free vacations, big screen tvs, cash bonus’ to the listing agent and even a free car. I have also heard of people giving away a cool prize at their open house. These things can help get your house noticed which is the first step to getting it sold. 

5. Make sure that your price is competitive. Consider using the money that you are saving on real estate commissions to cut the price of your house so that it is more competitive. In tough markets it is going to be very important that your house isn’t priced too high or people will find another option. In our area there were a ton of houses on the market and most of the houses that were selling were 5% or more undervalued. If that is what it takes you might need to swallow hard and cut the price of your house. Of course all of these things are just suggestions. Still, when things get tough and you need to sell your house these could be an option for you. 

BUILDERS MAY HAVE TO WAIT FOR FINAL WORD ON SERVICE TAX

Realty developers and builders may have to wait to hear a final word from the government on their service tax liability. The Central Board of Excise & Customs (CBEC), which is reviewing the move to levy service tax on builders, has decided to seek the law ministry’s opinion on the matter.

“The law ministry wil l be asked to expedite giving its opinion as writ petitions are pending before high courts,” said a senior government official. Realty developers in Pune and Mumbai have challenged the government’s decision to impose service tax. The dispute is whether the estate builder per se is a service provider.

Builders claim they are fulfilling a contract that has no service element attached to it. So, they are not liable to pay service tax. The law ministry may have to give its views on whether the Centre has the legal authority to collect tax on this kind of a transaction, said sources.

Residential complexes were brought under the service tax net from June ‘05. A 12 percent service tax is being added to the cost of a flat in all housing complexes with more than 12 units. The levy was initially imposed on industrial and commercial complexes in September ‘04.

The Promoters and Builders Association of Pune (PBAP) and the Maharashtra Chambers of Commerce and Industry filed writ petitions in the Mumbai High Court after show cause notices and summons were issued by the revenue department to builders who did not pay the levy.

According to Hemant Naiknavere, vice-president, PBAP, the revenue department’s council gave an oral assurance that he would inform the department to refrain from taking any coercive action against the builders till the court gives its ruling. This means the revenue department will not pressurise builders to pay the tax (or status quo will be maintained).

Source: The Economic Times

Realtors, buyers' opposite views hit housing market

"Currently, while property developers are still holding on to these elevated prices, potential home buyers are deferring purchase in anticipation of a price correction," ICRA said in a report. 

Housing sector is facing a queer situation of pulls from two sides, as the realty players are still holding on to the high prices but potential buyers are deferring purchases on hopes of a price correction, rating agency ICRA has said. 

It added besides high prices and interest rates, another factor that has affected demand for homes during the past one year is the cautious approach that banks have adopted toward fresh disbursements. 

So far as the commercial space is concerned, it has also been affected by the current slowdown in the economy and the meltdown in the stock markets. 

Apart from the general slowdown, the drivers for the commercial real estate market -- IT and ITeS and financial sector -- have also hit the slow lane, it said. 

Faced with a tight liquidity situation and a dip in their profits, financial sector companies have also pared their growth plans. 

"This, along with the expectations of over-supply in many pockets within the country, can impact the occupancy levels and rentals of new commercial properties," the report said. 

Source: http://economictimes.indiatimes.com/Realtors_buyers_opposite_views_hit_housing_market/articleshow/3691332.cms

Realty faces Reality

The whole business model depended on the ability to infuse cheap monies at the earliest stages, including additional infusion through exits at the end of each stage to be able to funnel monies back to stage one-- land acquisition. Further, as each project funds another in this working-cap intensive business, liquidity is the key driver of the business. With decreasing options, distress-sale of land parcels was the only option for some. 

“We see the discount on offer as the last attempt of developers to hold on to current prices with a marginal discount of 5-8%, before they are forced to adjust property prices taking into account the challenging macro economic realities. We do not expect volumes to recover in the current economic uncertainty which would worsen the cash flow problems for the sector. We expect sharp and visible correction in prices by developers from early next year,” said a report of JM Financial. 

In most cases, we observed that property prices were maintained or increased from the level they were about six months back. Taking into consideration the slowdown that capital market related activities have seen, we feel that the current prices are not in line with the affordability of buyers. 

The government, in March 2005, amended existing norms to allow 100 per cent FDI in the construction business. This liberalization act cleared the path for foreign investment to meet the demand into development of the commercial and residentialreal estate sectors. It has also encouraged several large financial firms and private equity funds to launch exclusive funds targeting the Indian real estate sector. 

“With debt market getting dried up, developers facing the heat of liquidity crunch and PE funds shying away from real estate investments and speculative investments at an all time low, we can expect a 15-20 per cent correction by the first quarter of 2009,” said Anuj Puri, managing director, Jones Lang LaSalle. 

Moreover, private equity investors who had been picking realty deals earlier this year appear to have tightened their purse strings now. September month has witnessed only two transactions worth just $12 million. 

According to real estate consultants, seven major Indian cities including Delhi, Mumbai, Kolkata and Bangalore showed a marked decline in demands during the quarter ending September. Leasing of office space had also slowed down significantly. 

Only those players who have achieved substantial revenues from past deals could expect to rise against the tide. “Rationalise costs, move to affordable housing and be realistic in pricing; those who cannot do that would be in danger of being pushed to bankruptcy,” warns PINC Research's Shenoy.

Source: http://economictimes.indiatimes.com/Markets/Real_Estate/Realty_Trends/Realty_faces_reality_15-20_correction_by_Q1_2009/articleshow/msid-3659279,curpg-3.cms