Top 10 Bollywood Actresses by Online Popularity

Given the popularity of our recent article entitled REVIEW: Top Celebrity Branded Real Estate Projects in India where we explored the top celebrity endorsed projects; we decided to explore the online popularity of actresses for business purposes. While the list only takes into account a celebrity’s OFFICIAL website or fan site, we feel it’s a fairly good indicator of the Bollywood celebrities’ popularity. The list is an indicator of the star power of the actresses and how much star power she can give to a corporation wishing to use them as a celebrity ambassador.

Top 10 Bollywood Actresses by Online Popularity

#	Date: 07/2007	People*	Month Δ	Year Δ
1	aishwaryaworld.com	3,080	-59.9%	-87.4%
2	rani-mukerji.com	2,251	6.5%	153.2%
3	sushmita-sen.com	1,920	366.0%	381.2%
4	bipashabasunet.com	1,396	199.6%	N/A
5	mallikasherawatwow.com	1,147	-76.9%	N/A
6	preityzinta.com	1,011	-16.2%	-85.7%
7	Amisha-patel.net	1056	12.8%	-18.3%
8	kareena-kapoor.info	995	15.8%	-58.3%
9	rakhi-sawant.com	583	N/A	N/A
10	amrita-rao.com	251	-88.5%	-75.4%
*	The number of Unique people visiting a site.

1. Aishwarya Rai

Our number one India celebrity is a big hit with online fans. Aishwarya Rai transcends mere numbers. If you were to actually tally her last dozen films, and not count her item-song in Bunty Aur Babli, then you'd see that none of her films have made a profit since 2002's Devdas.

2. Rani Mukerji

We have not seen Rani endorse a real estate related project as of yet, but she’d be an excellent choice given her online appeal. If there can be a point of unanimity during any banal Bollywood discussion about numbers and ranks -- in an industry that trades loyalties every Friday It's come to the point where everybody loves Rani.

3. Sushmita Sen

Another India celebrity not endorsing a real estate project, this graceful stunner in Mumbai takes the sari to new heights in Main Hoon Na, then disappears from the marquee.

4. Bipasha Basu

She was the winner of the Ford's Supermodel of the World Contest for 1996 and now works in mainstream Bollywood films. She has been listed as one of Asia's sexiest women, along with fellow stars Mallika Sherawat and Aishwarya Rai.

5. Mallika Sherawat

In these times of the cleavage-friendly music video, this statuesque woman isn't as special as she once was. However, she still ranks high on our online ranking.

Mallika's onscreen debut was in Lak Tunoo, a music video by Surjit Bindrakhia.[1] She attracted wide notice with her appearance in the 2003 movie Khwahish. By Indian standarts the movie was quite racy, however it was known for its naturalistic and realistic topic. In 2004, she starred in Murder, a film inspired by Hollywood's Unfaithful that again challenged Indian film standards.

6. Preity Zinta

(born 31 January 1975) is an award-winning popular Indian actress who appears in Bollywood movies. She is among the most successful actresses in the industry, and is regarded as one of the biggest names in India. Balancing commercial successes with critically acclaimed performances she has established herself as one of the most prominent leading actresses of Hindi cinema. Zinta is placed on the top in the list of the biggest actresses of this generation.

7. Amisha Patel

This girl knows business and an excellent choice for an endorsement. After pursuing her studies, she came back to India to join the Mumbai Stock Exchange, but that could not hold her interest for long and she decided to join Satyadev Dubey Theater. In 2004, Amisha shocked the industry by suing her father for mismanaging her accounts and since then the actress shares a strained relationships with her parents and her brother. Amisha is one of the most educated actresses in Bollywood and is known for reading books on the sets.

8. Kareena Kapoor

She might not have delivered on the Kabhi Khushi Kabhie Gham potential and turned up as Bollywood's bonafide Number One yet. However, after completing high school, Kareena headed straight to Harvard to attend the summer school but returned to India to pursue a career as an actress. Kareena’s debut movie was JP Dutta’s ‘Refugee’ opposite Abhishek Bachchan. Kareena was so magnetic on screen that she left a great impact on the audiences in her debut movie. 5.

9. Rakhi Sawant

Sawant was still in school when director Suneel Darshan offered her an Item Number opposite Govinda in Joru ka Gulam. Three years later, she auditioned four times before winning her breakthrough Item number Mohabbat hai Mirchi in Chura Liya Hai Tumne in 2003.

10. Amrita Rao

Rajkumar Santoshi approached Amrita after seeing her in a coffee ad. "In fact, Santoshi was one of the directors who had contacted me after watching the Perk ad. I had to turn down his film offer because I wanted to concentrate on my studies. When he approached me for The Legend Of Bhagat Singh, Rajkumar Santoshi made it clear to me that it was very brief role and would not require more than five days to complete it. I agreed immediately because I got to play Bhagat Singh's fiancé. Few know about her. The sacrifice she makes by living as his widow even though they never marry. The character does leave its impact in the film."

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Other notables not on the list

• Priyanka Chopra (just launching a site)

She didn’t make the list because her official site has not been launched and thus we had no data.

• Kajol

We didn’t find an official site or fan club for her, but we know the star’s popularity is extremely high.

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VIDEO: India vs China - Which is Better?

The India Street Examines the differences between India and China business and real estate practices. Hal Wendel of C3K Group defends China while we try to convince Hal of India's allure.

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HIRCO to Focus on Housing Needs of Elderly

By DHRUVA JYOTI CHOWDHURY, KOLKATA, INDIA

An investment plan of a staggering £47.9 million (about Rs 400 crore) is in the pipeline by the Hirco Plc, a real estate investment firm floated by the Hiranandani group of Mumbai to develop a township in Chennai.

Worthwhile to mention here that 35 per cent of the net funds raised at the time of company’s IPO would have been deployed at the London Stock Exchange. Hirco, a close-ended investment firm set up in Isle of Man, had raised £382.6 million (about Rs 3,200 crore) in December last year from its listing on the Alternative Investment Market (AIM) of LSE. Reports suggest that apart from catering of the business and the working communities, ample purchase opportunities will be given to the elderly who will now be able to have property on the mortgage purchase system. This will be a first in the Chennai region, with a focus on the security of the elderly and their day to day needs.

So now old age will no longer be a bane if you have built a small haven for yourself. The company insiders reiterate that this plan came to their mind after the Union finance minister announced the reverse mortgage scheme, in the Budget 2007-08.

Moreover, surveys recently conducted suggests that in most of the cosmopolitan cities in the country, this system is being launched by various real estate giants and it has been termed as a ‘no loss but profit’ business in the time to come. The scheme will enable the elderly property owners’ surrender property with a bank for a regular monthly income. This will turn out to be a blessing for these property owners, many of who have been abandoned by their children.

To keep up with the tradition of the company, the company has drafted an exhaustive plan for developing the industrial areas for the reason as only industrial land is available for such for the infrastructure development and its up gradation with time.

Not only this, the company will also cater to the basic needs of the to- be dwellers with the interiors being designed by the interior designer, for the user and according to their wishes. When a person will enter the space, all he is he will be needed to start forming an image of the apartment he has picked up for the purpose. The way the components of the interior (furniture, flooring, upholstery, walls) shall be laid with their form (square, circular, elliptical, curvilinear, straight linear) and color composition (harmonious, contrasting or a mix of both). This is not only the company’s key project but can prove to be a great passé for it if all goes well. This system will depict the psychology and social status of the purchaser as well.

Godrej Group IPO Expected in Late 2007

Sees its property development business as a major thrust area

By Vipin Agnihotri

Theoretically speaking, Godrej Group is 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 survey has come to the conclusion that 400 million people across India use at least one Godrej product every day. The Godrej group stands in a strong position at this point of time with annual sales in excess of US $1.4 billion, a workforce of approximately 20,000 and a strong diversified portfolio.

In its 16 years as a focused real estate development company, Godrej Properties Limited (GPL) has established a strong presence in the real estate market. The Godrej Group sees its property development business as a major thrust area. It is worth mentioning in this regard that 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.

The Company believes that 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. If experts are to be believed, ULCRA and restrictive FSI in Maharashtra are the main factor behind acute shortage of real estate and mismatch in demand and supply in the city. “We need to make changes in real estate regulations and modernize them. All big cities are growing taller. We need to do away with the antiquated laws,” pointed out Adi Godrej, Chairman, Godrej Group.

It has come into the notice of The India Street that company is looking at an Initial Public Offer (IPO) in the second part of this financial year wherein Godrej Group is expecting to dilute ten percent of the total value of Godrej Properties. The money will be utilized for new projects of company. In theory, Godrej Properties last financial year was Rs 45 Crore.

“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,” pointed out Godrej.

The pivotal factor here is that even as there are companies who have established a name for themselves, brands have not become an important part in real estate. In short, both consumers and investors need to be conscious about this. Godrej Properties is planning to build townships in metropolitan areas. Initial signs are that each township would be from 50 acres to 200 acres.

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Is the India Real Estate Boom Over?

DHRUVA JYOTI CHOWDHURY, KOLKATA, INDIA

In India, it has been all gold for real estate developers and especially rewarding for those companies who are floating their companies to cash on the booming demand and spiraling real estate prices.

Real Estate strategists in India feel that after the out-of-the world mergers in the real estate sector, it is now time for consolidation in real estate sector which is feeling constrained by falling inflow of funds, rising interest rates and the reserve bank of India axe which has cut off some of the profits of the realtors.

Further adding to the woes of the major real estate developers, the Indian Government last month decided to bar developers from raising money abroad to develop integrated townships in view to check excessive capital inflows in real estate sector in the country.

Though tightening of External Commercial Borrowing (ECB) norms was related to only integrated townships, the norms has spilled all over the real estate sector and affecting it in one way or the other.

Besides, RBI has raised risk weights on housing loans, followed by interest rate hikes to curb demand in the sector.

Much to the chagrin of real estate developers, Finance Minister P Chidambaram had recently said "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”.

"For big developers there is no impact of rising interest rate but small players are finding it difficult to raise money for their proposed projects. They would need to sell their projects to big developers," Ansal API Vice-President (Marketing) Kunal Banerjee told The India Street.

Distress sale of projects is already happening, he said, adding the industry would witness more of it in days to come.

Edelweiss Capital Senior Vice-President George Mathew pointed out that RBI has been squeezing all sources of funds gradually to rein in inflation and a possible correction in this sector could be in the offing.

"Higher funding cost is expected to reduce attractiveness of real estate projects, reduce the land banking run and bring prices down," he said, adding debt financing is not available for land acquisition.

"More than rising cost of borrowing, lack of availability of funds from financial institutions would lead to consolidation in real estate sector," Parasnath Developers Chairman Pradeep Jain said.

He said small developers would have no other option but to join hands with big players to fulfill their commitment to the end user.

Over the past six months, cost of borrowing has gone up over six per cent due to successive measures taken by RBI and the government to check surging property prices.

New players who joined the business in the last 2-3 years may have to sell their projects, said Zoom Developers CEO Rumneek Bawa.

As banks and financial institutions are hard-pressed with funds owing to stricter measures by RBI and the government, small developers are unable to get financing from these institutions.

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Challenges ahead for Indian real estate industry

By Vipin Agnihotri

No doubt, Indian real estate has seen a sustained upsurge in recent years, but there are number of issues and challenges confronting the industry.

Maharashtra’s draft housing policy is all set to be completed this month and will look into the areas of affordable housing, rental housing, transparency among other things. The best part about all this is that state government has accepted its role as a facilitator and enabler and is making attempts to erase the constraints faced by the real estate industry.

“The government could not be a mute spectator to the rising prices in residential real estate and affordable housing was a objective which it was striving towards,” pointed out SS Kshatriya, Principal Secretary, Housing Department, Government of Maharashtra. He also added that the sale and purchase of property on carpet area basis would be made mandatory.

When asked about the issue of having a regulator for real estate, he said, “When you liberalize a segment of industry, there is corresponding requirement for regulation, and real estate will follow power and telecom, in terms of having a regulator.”

In my opinion, spectre of rising prices in real estate may need to be regulated as well, but if the industry would do it by itself there might not be the need for state government to step into the regulation aspect as regards to pricing levels.

If experts are to be believed, the emphasis should be on creation of new areas with infrastructure and facilities rather than further developing existing urban areas. At present, land costs constitute around 50 percent of the total project cost and was largely responsible for the high prices.

Until and unless supply increases, through freeing up of land locked under the Urban Land Ceiling and Salt Pan reservations, the concept of reduced prices will remain just a mirage. If one flat is chased by ten buyers, prices will always rise. “While the unchecked speculation in North India has resulted in a price correction, other parts of the country have not witnessed a change in prices as yet,” pointed out Anuj Puri, Country Head, Jones Lang LaSalle Meghraj.

The challenge lies ahead as to how to provide housing solutions for all segments. The government should go out of city centres and develop infrastructure. The secret of reducing prices is to create surpluses and that is only possible if restraints on FDI are removed.

Suggested Reading Lowering of Real Estate Prices in the Suburbs Likely Visit our India Resource Page The Latest India Real Estate Round Up Comprehensive Real Estate Report by India City Pictures: New Chennai Airport

Good news for SEZ developers, used capital goods to be allowed in SEZs

By Dr Suvrokamal Dutta

Good news for Special Economic Zones (SEZ) developers, it has come into the notice of The India Street that very soon they will be allowed to transfer used plant and machinery of up to 20 per cent of their total capital goods requirement to SEZ they set up.

If experts are to be believed, this will mark a tremendous relaxation of the terms and conditions that at the present juncture prohibit developers from using second-hand capital goods in SEZs. Early indications are that the rules will be amended in coming days and will offer plenty of SEZ developers to leverage present units outside the zones for equipment, which can assist them in saving a large chunk of time and cost.

When The India Street asked a commerce ministry official in this regard, he said that ministry would be sending the proposed change in the rules to the law ministry for its clearance. It is worth mentioning in this regard that the proposal was originally introduced in the Income Tax Act in the 2007-08 Budget.

The main aim of the present rules prohibiting the use of old equipment in SEZs was to motivate fresh investment and ensure that units did not misuse the tax breaks allowed in SEZs by just relocating units.

To counter this scenario, the commerce ministry had modify the Special Economic Zone Rules last year, prohibiting the use of plant and machinery in SEZs that was previously used in domestic tariff areas.

SEZ industry executives are quite pleased with the government proposal, saying it will bring lots of advantages in the long run, especially to the Infotech and IT-enabled service and high-end engineering businesses.

Theoretically speaking, plenty of companies are interested in bringing expensive and custom-made equipment, including high-capacity servers and local area networks, to new units in Special Economic Zones. In my opinion, there is a genuine requirement in certain sectors to transfer some old equipment to the SEZ units. The pivotal factor here is that the relaxation would not lead to misuse since the permissible percentage of second-hand capital goods is not big.

Suggested Reading Visit our India Resource Page The Latest India Real Estate Round Up Comprehensive Real Estate Report by India City Pictures: New Chennai Airport

Commercial activities moving to Tier-III cities in India as realty costs increase in metros

By Dr Suvrokamal dutta

Increasing realty costs in the metropolitan cities has seen commercial activities move to the Tier-III cities in India. It is worth mentioning in this regard that property prices in the Tier-III cities such as Agra, Jaipur, Lucknow and Chandigarh corrected sharply by around 20 to 25 percent following rise in the interest rates in the last few months.

In my opinion, this is mainly because of gap in demand and supply in these cities. No doubt, supply has increased in the last couple of years but no fresh demand is generated as hardly any new commercial establishments came up in the Tier-III cities.

If experts are to be believed, at the starting stage due to boom in the real estate market, investors invested in these products, as the cost of the fund was low. But with the passage of time as interest rate almost doubled from 6 percent to around 12 percent in the last few years, investors are finding it real tough to invest in the realty assets, which implies that the developer are finding it hard to sell their project in the Tier-III cities.

Furthermore, it has come into the notice of The India Street that those investors who had invested in real estate sector, want to exit. Point to be noted here is that as there are not many end users in Tier-III cities, prices have started dipping. But, looks like, the hard days would soon be over in these cities.

With the increase in rentals and labour cost in Tier-I and Tier-II cities such as Delhi, Mumbai, Bangalore and Pune, the Tier-III cities such as Chandigarh, Jaipur and Lucknow have emerged as alternative commercial centres where off-shoring facilities could be shifted.

Few of the prominent players that have moved to Tier-III cities are Dell and Infosys to Chandigarh, Wipro and US Software to Kochi, Genpact to Jaipur and TCS and Tata Technologies to Lucknow.

“If Indian economy continues to grow at 8 to 9 percent per annum, the commercial activities in the Tier-III cities are bound to pick up,” pointed out Anirudh Yadav, business journalist based at Lucknow. In theory, the Tier-I and Tier-II cities are already overcrowded. What’s more, rentals in these areas have increased around four times in the last four years. Taking this into consideration, in medium to long term, growth in the country would come from Tier-III cities. That’s why, the investors, who enter the market early, are likely to reap benefit the most.

Suggested Reading

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Kerala Another Bright Spot in India Real Estate

Dhruva Jyoti Chowdhury, Kolkata, India

Riveting the attention of both property developers and homebuyers recently, is Kochi, the nerve centre of the southern state of Kerala in India.

Demand for large-scale apartment complexes is up and it exceeds supply now. Apartment prices are up by Rs. 100 per sq. ft. while some estimate 20 per cent jump in the last one-year alone. Similarly, land prices zoomed in places like Kakkanad from Rs. 30,000 – Rs. 80,000 to Rs. 3 lakhs. “The market is predominantly end user driven and not speculative and that is one reason for a consistent growth in the demand for residential property”, says Jacob Chandy, director, Southern Investments.

There has been a perceptible shift in trend among homebuyers from the days of compelling necessity, to buying homes for self-occupation, to the analysis of multiple options for viable avenue for investment. The Kerala Builders Forum boasts of 28 builders who have agreed to follow a common code of ethics. Property buyers are not unduly worried over the new entrants to the market as they feel the demand is also equally on the growth path.

In a swift move to support the sector, the government has been quick to reduce the approval time for building plans from 7 months to just 2 months. This has been widely welcomed by the property developers. The state government is marshalling efforts to support the requisite infrastructure needed for the city.

Investment is trickling down from the traditional tourism and health related spa to commencement of smart city, container transshipment terminal, fashion city and retailing. What is more, entertainment sector is opening up in a big way.

The home loan market in and around Kochi has been estimated at Rs. 50 crore plus every month with the market dominated by ICICI Bank followed by HDFC, State Bank of Travancore and others.

The Greater Cochin Development Authority (GCDA) has sold land and generated Rs. 350 crore and with margin money plans to raise additional resources from the lending institutions to fund infrastructure development in and around the city. Incidentally water supply project has already been taken care of by the Japanese management team. On the flip is the exorbitant stamp duty that is eluding the policy makers.

The demand for housing has been quite strong if the number of new entrants to the sector and the projects under implementation are any indication. This has convinced developers like Bangalore based Puravankara, Sobha and Brigade, Delhi based DLF and Dubai based Emaar group to join the bandwagon. “The confidence level is high and the entry of outside builders will bring in more quality and organised level of activity to the market eventually benefiting the end users”, feels Gerald Pavamani, consultant, marketing to Heavenly Homes.

Capital values for apartments in the city areas range from Rs. 1,500 to Rs. 2,000 per sq. ft. and in areas like Marine Drive it touched Rs. 2,800 - Rs. 3,000 per sq. ft., whereas in suburbs like Kakkanad it ranges from Rs. 1,300 to Rs. 1,500 per sq. ft. On the lower side, budget apartments are available from Rs. 800 to Rs. 900 per sq. ft.

The entry of IT majors like Wipro and TCS has given a virtual boost to the demand for housing. Wipro is talking about employing a 5,000 workforce in the next 3-4 years. Even if 25 per cent accommodation is taken into account, 300 projects are needed in just 2-3 years for which there is no adequate supply or even a contingency plan. Additionally 5-6 IT companies are planning to make a beeline to the city now. “Rental market is expected to get a boost and investment in residential property will become a viable option shortly”, predicts G.S. Venugopal, managing director, Gokulam Engineers India Pvt. Ltd. This is one reason for the entry of new players to the market. Even landowners are keen to enter into joint venture development with established developers for a larger slice of the pie.

Yet another reason for the sudden spurt in demand is the returning NRIs from places like UAE where steep rental levels locally have compelled families to return to India. The migration of medical personnel has created a new wave of NRI demand for Kochi from hitherto unheard of markets like London and Russia. The NRI demand has also pushed the requirement for high-end market in the price range of Rs. 20 – Rs. 40 lakh.

A significant feature is that people are looking for health related amenities in apartment projects where the maintenance cost is competitive and easy to manage, say Realtors.

Commercial Property Market:

The commercial property market is yet to pick up momentum though Info Park is a major complex and set to change the skyline of Kochi. A number of unanswered questions still remain in smart city, according to market sources.

Retailing is on the upswing and Aerens is launching a gold souk in Vytilla. A wedding souk is being planned on the main arterial Marine Drive where capital value is Rs. 8,000 per sq. ft. It is said that a number of jewelers have already invested in the units. With the proposed entry of Lulu centre and KM Trading in Dubai, malls are the next in store to lure shoppers. Not to be left behind in the race, entertainment sector too is poised for a turnaround with Le Meridien's discotheque and a number of new players devising projects and appropriate time to enter the market. “With investor sentiment scaling new high, Kochi is undoubtedly poised for all-round development”, feels Col John K Manavalan (Retd), director, RDS Project Ltd. confidently.

Kochi Residential Property Prices

Lowering of Real Estate Prices in the Suburbs Likely

Speculators exiting the market

By Dr Suvrokamal Dutta

Excess supply coupled with rising interest rates would lead to lowering of realty price in the suburbs. It is worth mentioning in this regard that plenty of the projects, which were launched in 2005 and 2006, are likely to be finished in the next six months in Gurgaon and Noida.

The pivotal factor here is that as interest rates have shot up to around 12 percent per annum, the holding cost of these apartments after taking the possession would be very uneconomical. Because of this, these investors would like to sell and exit from the project. On the other hand, if investor holds the project for one more year, he will have to pay an interest cost of around 12 percent.

In case if investor liquidate the investment and deposits the money in a bank, he will get a return of around 10 percent. In theory, as the appreciation in the property prices in the coming years is not in the sight, holding the property for one year, is likely to cost him around 20 percent.

In my opinion, to cut loss, such investors would like to sell the property in the market. This is likely to increase the supply of real estate in the market. It has come into the notice of The India Street that the activity levels in mid-range projects in Gurgaon, Noida and Ghaziabad have diminished. If experts are to be believed, speculators have almost exited from the market. In addition, end users are also not very interested to purchase a house at this point of time because of rise in the prices and interest rates.

Taking this into consideration, one can safely say that the increased supply in the secondary market from the projects that are getting finished will push the prices downward. “The high end market has also seen some downward pressure. NCR suburbs including corridors such as the Sector Road and Expressway in Gurgaon and Noida have been very active in the last year or so,” pointed out Kadambari Murli of Sunshine consultant.

There is no doubt in my mind that increased demand based on changing demographics, rise in disposable incomes and aspirations of the upper middle class has given a much-needed confidence to developers such as DLF and Unitech to come up with new high-end projects.

Chennai Real Estate : Ready For The Quantum Leap

By DHRUVA JYOTI CHOWDHURY, KOLKATA, INDIA

Chennai has several inherent advantages for real estate development and the city is poised for a quantum leap. There has been an unprecedented growth in demand for real estate across all markets making the exercise dearer. This is attributed in no small measure to the vibrant economy, robust growth and the resultant housing demand-exceeding supply.

As the Detroit of India, Chennai has been luring several industries to its fold due to its strategic location, availability of skilled manpower, better infrastructure and cosmopolitan outlook. The IT sector's prolific growth has triggered real estate demand to a new high now. And the declaration of old Mahabalipuram road by the State Government as IT corridor and laying of world-class infrastructure facility under way has seen a virtual exodus of property developers to garner land for development.

The all-round development has enthused even property developers from other cities like Bangalore, Hyderabad, Mumbai, Pune and New Delhi to enter Chennai and test the waters. Mumbai developer Hiranandani Constructions has already acquired nearly 100 acres on IT corridor opposite Siruseri Park. While some builders have finalised a few deals, others are in the process of clinching deals. It has been a Herculean task for a majority of the builders to get hassle free title to the property. The 100 per cent foreign direct investment (FDI) under automatic route in real estate development is a virtual boon for major global players to enter Indian cities. A number of trade delegations have visited the city for preliminary survey to consider investment in large-scale projects. Not a day passes without an investor group surveying the IT corridor for suitable areas for development. While Singapore Realty is yet to officially launch their maiden township project in Siruseri Park, a number of township projects are under active consideration in select areas.

With the thrust given to infrastructural development, there has been a perceptible in the mindset of people about commuting to city areas. People are nowadays prepared to shift to suburbs if integrated township project is available with built-in facilities. A section of people in the budget range of Rs. 25 - Rs. 30 lakh are keen to own independent homes even if it involves travelling 20 km outside the city. But it should be equipped with a complete range of facilities, he added.

The residential property market has been witnessing an unprecedented growth across all markets. There are homebuyers who are location-specific and prepared to wait as and when a suitable project is undertaken for development in the locality. "We have a waiting list of over 100 buyers for specific locations and what is more clients are keen to commit whenever a project is launched in that particular location", says T Chitty Babu, managing director of Akshaya Homes.

A significant development is that land values zoomed across the city. Realtors say that this trend can be attributed to upsurge in demand for city properties. The spillover effect is felt in suburbs as well with property developers garnering more areas for residential property development. Yet another trend is that developers are shying away from city areas due to steep increase in land values and unviable operation to develop real estate. It is this sudden development that triggered apartment price increase in posh areas across the city (see table 2 below). "It is becoming virtually unviable to acquire land at the exorbitant rate and develop large areas of residential property in the city", feels V Suresh, managing director ,Real value promoters limited. Obviously, with a number of people chasing too few a stock in prime areas, apartment prices zoomed at select areas across the city, he added.

While apartment prices are up by 25-30 per cent in the last six months alone, it was mainly due to sudden spurt in land prices in specific locations, feels P V Sanmugam, managing director, KGEYES Residency Private Limited, which has recently built a high end apartment project on Greenways road, and a new project is under way in Boat club area.

Click above to enlarge

Property developers complain that development control rules are to be partly blamed for the steep increase in property prices. With acute land shortage, a city like Chennai has to grow only vertically and to that extent, the government should have liberalised the floor space index (FSI). It is futile to extend such incentives only to IT buildings when there is no proportionate supply to match housing demand due to entry of migrants from other cities. Moreover, the government should consider granting multistoried apartments outside corporation limit, realtors say.

This is important especially in view of the fact that 50 out of the 80 IT parks coming all over the city are under various stages of implementation on the IT corridor alone. Second, inordinate delay in granting building permission leads to cost overrun of projects, which is ultimately passed on to the buyer. Approvals invariably take more than six months especially at a time when other cities are introducing single window clearance and fast track clearance schemes. Today home buyers are in a precarious situation though several housing finance companies and banks provide flexible lending norms and all time low lending rates to invest in housing.

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DLF Looks to Conquer Bangalore and Global Airports

Dhruva Jyoti Chowdhury, Kolkata, India

With the DLF venturing into the Real Estate sector in Bangalore, the metropolitan’s realty market is set to get ‘red’ within the next few months. According to the DLF plans more than 10,000 residential apartment units in the city can be expected to come up within the next few quarters of the year. The real estate major is also focusing on coming up with a mall on a huge 2 million sq ft in the state capital.

DLF has dashed into Bangalore with a planned investment of about 3,000 crore rupees in developing the apartments stretched over 100 acres and has also possessed 80 acres of land on Bannerghatta Road and 20 acres in Electronics City. The project is proposed to get set go in the next three to four months, while the first set of apartments would be ready by 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 from now. The mall is likely to be one of the biggest in the country.

Internal sources within the DLF has also informed the India Street that the company is also attempting a fresh foray into airport modernization and has associated itself with Germany’s Fraport AG Frankfurt Airport Services Worldwide, the owner and manager of Frankfurt Airport, as its partner.

A special purpose vehicle, ‘DLF Fraport SPV’, has been set up to focus on the development and management of airports in India. The shareholding of DLF and Fraport in the special purpose vehicle (SPV) will at least be 26% each.

Fraport is already present in India through the consortium it formed with infrastructure conglomerate GMR Group and the India Development Fund to bid for the modernization of the Mumbai and Delhi airports. GMR-Fraport eventually won the modernization bid for the Delhi airport in early 2006.

The SPV it has formed has agreed to jointly bid for the Chennai airport. The combined entity also plans to bid for developing and managing Greenfield airport projects including one in south Gujarat and the dedicated general aviation airport in Delhi (a general aviation airport handles private aircraft, helicopters and charter flights, apart from small cargo planes).

The two companies will also look at the upgrading and modernization of non-metro airports. There are around 35 non-metro airports in India.

DLF has been eyeing, without concrete results, airport re-development for some years. In July 2004, it tied up with the Malaysian Airport Holding Bid to bid for the privatization of the Delhi airport.

This joint venture was, however, terminated in April 2005. Later, in the year, DLF joined the consortium led by Bharti Group and Changi Airport of Singapore for the modernization and upgrading of the Mumbai and Delhi airports.

DLF also has a 50-50 joint venture with UK’s infrastructure and construction group Laing O’Rourke to execute DLF’s mega infrastructure projects. The joint venture with Laing O’Rourke will, however, not overlap with the company’s SPV with Fraport, said a DLF spokesperson.

The company which is set to raise as much as Rs9,650 crore in what will be India’s single-largest initial public offering, said it plans to sharply curb expenditure on land acquisition, down 54% to Rs3,000 crore from a previously proposed Rs 6,500 crore.

DLF owns or holds development rights for 10,255 acres, unchanged from January. Profit in the year ended 31 March rose tenfold.

DLF and its subsidiaries own 11.3% of the land reserves, they have sole development rights for 44.6% of the total. They have agreements to purchase or letters of acceptance for 35.9% of the land while the rest are joint developments with partners.

DLF owns 3.5 million sq. ft of space in completed buildings in New Delhi and its suburbs, including Gurgaon and Noida. It also holds plots of about 7.2 million sq.ft that do not form part of its land reserves, DLF said.

The National Capital Region, which comprises New Delhi and adjoining areas, accounts for 51 % of DLF's land reserves.

The real estate major has also entered into an agreement for floating a joint venture with Ranbaxy group company, ‘Fortis Healthcare’ to set up hospitals across the country with about Rs 6,200 core of investment.

Fortis will have a majority holding with 74% stake and the rest will be with DLF in the proposed joint venture.

The Joint Venture plans to set up a chain of 200-450 bed hospitals in 31 cities in India within three to five years. While the joint venture will mark DLF’s foray into the healthcare segment, for Fortis the move is a part of its strategy to become a Pan-India player in the healthcare segment and resolve real estate problems for setting up new hospitals. The planned investment of Rs 6,200 crore would go toward meeting cost of land, construction and medical equipment. The JV plans to build hospitals in cities where DLF has a presence. Already DLF has a land reserve of 10,255 acres in 31 cities.

Earlier, DLF had forayed into hotel business by tying up with US-based hospitality giant Hilton Group to set up a chain of 50-75 hotels and service apartments in India under the certain brands of the international major. The company had also entered into an agreement with US-based Prudential Insurance to set up a joint venture company to sell life insurance products in India.

The Latest India Real Estate News Round Up

Dhruva Jyoti Chowdhury, Kolkata, India

Sensing the tempting Real estate market in India, the giants of almost every other India sector are preparing to cash on the Realty sector in India. The giants that have emerged as top global companies for specializing in some or the other respective fields are now turning their head towards the booming real estate in the country.

Bullish on government’s commitment in infrastructure development, global giant General Electric (GE) has recently elaborated its plans to set up a $300-500 million infrastructure fund for the Real Estate sector.

GE’s statement came after Citigroup, Blackstone, IDFC and IIFCL announced their respective plans to set up $5 billion fund for infrastructure development.

Reports also suggests that the company is looking at financing real estate and is planning a $2 billion fund to be invested across all types of real estate - residential, retail, townships and special economic zones (SEZ) I India in particular.

The Hinduja Group India, plans to develop 4,000 acres of land held by its listed units for residential and commercial use, under a company called Asia Property Development Ltd, joining a slew of business houses looking to cash in on a real-estate boom in the country. It’s also in close door talks with the private equity players interested in partnering the group in this venture.

The Hindujas’ land bank would count among the some of the bigger ones held by Indian firms. For instance, Delhi-based real-estate firms DLF Ltd and Unitech Ltd have land banks of 10,255 acres and 10,900 acres, respectively. Others such as Sobha Developers have reserves of 2,747 acres of land.

With real-estate prices rising 200% in India’s tier 1, cities in the past two years, Indian business groups such as chemicals firm DCM Shriram Consolidated Ltd and the Wadia Group, which owns the Bombay Dyeing clothing company, have forayed into real-estate development, although on a smaller scale. Both intend to develop around 100 acres each.

Gurgaon based real estate company Emaar MGF is learnt to be finalising its plans to hit the capital markets by the end of this year. The company is planning to raise $1.1 billion by offering 15-20% of its equity to public, valuing the company at about $6.5 billion.

This will be the second big IPO in the real estate sector to hit the capital markets this year. Another Gurgaon-based real estate company, DLF is planning to hit the capital markets with a $2 billion issue.

Mumbai-based Larsen & Toubro Ltd is also planning to invest Rs 8,000 crore in real estate and urban infrastructure over a period of three to five years through its subsidiary L&T Infrastructure Development Project Ltd (L&T-IDPL). HDFC has a 25% stake in L&T-IDPL, and would also be contributing to the investment.

L&T has already invested over Rs 700 crore in real estate and urban infrastructure projects. The management has recently agreed to invest an additional over Rs 500 crore in the business this year. The urban projects are executed through yet another subsidiary of IDPL, L&T Urban Infrastructure. The various projects together are expected to yield around Rs 2,500 crore annually for L&T. The projects will be implemented in a phased manner, with each under different special purpose vehicles (SPV’s).

L&T is developing residential projects in Chennai, Vishakapatnam and Colombo, apart from developing an integrated township in Chandigarh in association with a local builders. They have recently acquired land in Nagpur in order to develop a residential project. L&T IDPL is also working with Bombay Dyeing on redeveloping a dilapidated building in Mumbai.

Godrej Properties, the real estate arm of the Rs 7,500-crore Godrej group, is in deliberations with private equity investors to raise Rs 200 crore for its two realty projects in Hyderabad and Kolkata. The company is looking to dilute 49% stake in both the projects to PE investors.

The two projects may be set up as a special purpose vehicle in which the majority stake will be retained by Godrej Properties. Advance stages of discussions are continuing with two funds including the London-based real estate fund Trikona Capital.

Outsourcing and technology giants ‘Xansa’ has also entered into an agreement with Alpha Tiger Property Trust Ltd for sale and leaseback of the company’s real estate interests in India for Rs190.87 crore.

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New Service Tax Amendment to Target Wealthy in India

Amendments in service tax protocols: Advantageous to smaller housing societies

By Dr Suvrokamal Dutta

Recent amendments in the service tax protocols will prove advantageous to smaller housing societies. It is worth mentioning in this regard that the Indian government has notified the levying of service tax on only those societies where maintenance charges paid by members exceed Rs 3,000 per month and the overall gross collection of the society is more than Rs 8 lakh per annum.

If experts are to be believed, this has ensured that middle and lower income group societies will be exempted from these taxes, and is definitely beneficial to most societies. However, societies with annual collections exceeding Rs 8 lakh will have to cough up service tax at 12.36 percent.

The pivotal factor here is that both the clauses of a member paying Rs 3,000 per month as maintenance charges and the society’s collection exceeding Rs 8 lakh per annum must be fulfilled for a society to fall in the bracket of service tax. “The society is not liable to file service tax returns if it collects more than Rs 8 lakh per annum, but individual members’ contribution is less than Rs 3000 per month. The new law is in effect from April 1, 2007,” pointed out Rahul Nandan of Bhagyalakshmi housing society.

In my opinion, laws are made for the welfare of the people and one must not doubt its intentions. This law is implemented so as to concentrate on a particular section of society. In terms of statistic, there are more than 23,000 registered housing societies in Mumbai and Thane. Of these over 90 percent of societies charge less than Rs 3,000 for maintenance purposes. This has ensured that more than 90 percent of the societies will be excluded and only very high premium residential projects will file returns.

There is no doubt that smaller societies will be definitely benefited from this amendment since their collection will be less than Rs 8 lakh. By saving this service tax they will be able to use this amount in a better way.

It has come into the notice of The India Street that not many are supporting the concept of including housing societies under taxable services. The argument stems from the fact that a cooperative society is a group of people who are providing services to themselves and not to any secondary party.

Not so long ago, the service tax department opined that payments like water tax and property tax should be exempted from service taxes, but at present, however, transfer fees, donations, property tax and all of which will be accounted for computing the tax are included under the service tax bracket.

High premium residential projects dotting the landscape of South Mumbai and reclamation areas where all amenities and comforts are given for the convenience of the selected flat purchasers in the city will be included in the taxable bracket.

Overview of India financial system

By Vipin Agnihotri

Financial intermediation in the organized sector of India is conducted by a wide array of institutions functioning under the overall surveillance of the Reserve Bank of India (RBI).

Reserve Bank of India-

The Reserve Bank of India as the central banking authority is at the apex of the Indian financial system. Established in 1935, it became a government owned institution from 1949 under the Reserve Bank Act of 1948. Under this Act, the Indian government is empowered to issue directions to RBI, after consulting with RBI’s governor.

RBI performs the following traditional functions of the central banking authority:

• It formulates and implements monetary and credit policies

• It functions as the banker’s bank

• It manages the liquidity reserves of the credit institutions and supervises their operations

• It plays an important role in maintaining the exchange value of the rupee

• It controls payments and receipts for international trade and regulates other foreign exchange transactions.

In addition to the traditional functions of the central banking authority, RBI performs number of functions aimed at developing the Indian financial system.

• It seeks to integrate the unorganized financial sector with the organized financial sector

• It encourages the extension of the commercial banking system in the rural areas

• It influences the allocation of credit

• It supports innovation in cooperative banks

• It promotes the development of new institutions (for example, it set up the Unit Trust of India, the Industrial Development Bank of India and the National bank for Agriculture and Rural development)

Commercial banks-

After RBI, commercial banks represent the most important institutions in the financial system of India. Public sector commercial banks dominate the commercial banking scene in the country. The changes in banking structure and controls in the last few years have resulted in

• Wider geographical spread and deeper penetration of rural areas

• Higher mobilization of deposits

• Reallocation of bank credit policy to priority activities

• Lower operational autonomy for bank management

One of the major activities of the commercial banks is to provide working capital advance to industry. “In recent years, RBI has been monitoring closely the credit extended by commercial banks to industry, which traditionally relied heavily on commercial banks and were the primary beneficiaries of the banking system,” pointed out Shalabh Saxena, business journalist based at India.

Number of committees – the Dehejia Committee, the Tandon Committee has been set up to look into the problem of working capital credit and make suggestions. The major recommendations of these committees have been two fold: reduction in bank credit to industry and inculcation of a greater sense of financial discipline in industrial borrowers. By and large, RBI has accepted the recommendations of these committees.

A major problem faced by commercial banks in India is that their profitability is low. This is largely because of over staffing, inefficient procedures, subsidized lending to the priority sector and high incidence of bad debts.