New Mumbai International Airport Pictures and Video

Like our postings on the New Chennai International Airport (Pictures) and the more recent updated Updated Picture of the New Chennai International Airport Terminal we are bringing you a first look at some of the Mumbai Airport pictures. The master plan includes 995 acres of operational land. Currently a part of the airport, which includes 59 acres, that is open land.

The real challenge is going to be the displacement of people in the effected slums. See the video below the pictures for a video rendering of the new site.

from Business Standard front page

See even more Mumbai International Airport Pictures

- The Editor

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Big Mistake: New flyovers planned but lack proper pedestrian walkways

By Vipin Agnihotri

No doubt, state of the art expressways and flyovers have make metros of India sophisticated in nature but the absence of proper pedestrian facility takes away the sheen from them. In my opinion, the problem is grave and needs immediate planning.

It has come into the notice of The India Street that in order to improve the transport system the Indian government has planned plenty of routines. Integrated multimodal transport system, will play a prominent part in offering an effective public transport service and hopefully will reduce private vehicles.

If government sources are to be believed, five new metro corridors are planned in addition to the High Capacity Bus Corridor System, elevated light rail transit system and an integrated rail bus terminal.

All in all, the main focus is on the development of more roads and more effective mass transportation. Though, there is no emphasis on the common man- the pedestrian- and his requirement for safe problem free movement space.

There is no doubt in my mind that with steady increase in the numbers of cars and footpaths, pedestrian space in the cities like Delhi and Mumbai has become increasingly marginalized. It is worth mentioning in this regard that in the layout of residential colonies all Indian roads were planned with a pedestrian footpath on either side. In other word, the footpath was meant to be a place for the common man to walk upon and did not belong to the owner of plots adjoining the access road.

But in large chunk of areas the common man right of access to the footpath is not respected. As a matter of fact, plenty of plot owners have sough to beautify the area by making a private fenced garden. “In all new development the system of planning presently being followed, revolves around the requirement of vehicular traffic,” pointed out 78-year-old Radhey Lal.

Theoretically speaking, roads have been widened in India and flyovers have been built in all the major cities of the country without offering safe and convenient facilities for pedestrian to cross over. The requirement for adequate pedestrian space is an absolute must especially in places where large number of people gets together such as in neighbourhood markets and shopping centres.

Unfortunately, here also, the focus seems to be on providing for the movement of vehicles and the parking of cars. Shoppers dodge their way around moving cars, scooters and motorcycles and accidents are frequent and common. Despite this traders have continued to resist the pedestrianisation of shopping streets fearing loss of business.

Examples of shopping areas in Delhi that urgently need to be converted to pedestrian-only status includes Ajmal Khan Road in Karol Bagh, Central Market in Lajpat Nagar, Khan Market, Defence Colony Market and Malviya Nagar.

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The Best Apartment Building in Mumbai is the Shapoorji Pallonji’s Imperial Towers at Tardeo

Increasing demand for bigger and better apartments in Indian real estate

Editor Note: We have no affiliation with any of the companies mentioned herein.

By Vipin Agnihotri

There is an increasing demand in the Indian real estate market for bigger and better apartments, mainly from executives, NRI’s and high net worth individuals in their mid thirties and forties working for financial institutions, banks, IT and software companies.

Taking this into account, developers and builders are giving high-end properties that become landmarks in their own locations over time. For example, Pallazo, in Juhu is a ‘By invitation only’ project giving eight exclusive five-bed room apartments, one on each floor, with advanced home automation, a lavish sun deck and even a lotus pond in every residence.

In an ideal scenario a premium apartment is a three bedroom of 3,000 sq ft. Point to be noted here is that the size automatically increases in a high-end unit. If experts are to be believed, very high-end spaces in Mumbai mean apartment sizes of 5,000-10,000 sq ft of eight to ten bedrooms with a terrace or garden spaces and even a swimming pool.

It has come into the notice of The Indian Street that among the most impressive building under construction in Mumbai is Shapoorji Pallonji’s Imperial Towers at Tardeo. Two 65-storeys towers, with 10 levels of parking and two-level lobbies are followed by 28 floors of duplex and another 20 floors of penthouses with options of a terrace garden or a private pool.

On the other hand, Lodha Group’s Bellissimo, a 50-storey tower is located at Lower Parel and has a total of 18,800 sq m of open space where there will be waterfalls and areas for barbeques. On offer are residences that open into a sprawling sky garden and biometric fingerprint that gets you access to elevators and floors.

As an innovative approach, buyers are provided an option for shell apartments or bare walls with no other finishing- therefore the concept of a Designer Home, furnished with your own personal preferences. These unfurnished lifestyle homes minus flooring, plastering or woodwork are still priced between Rs 15 and 40 crore.

It is worth mentioning in this regard that the prices of premium properties in Mumbai differ from location to location. In line with international standards, most high-end premium properties fetch high resale values. Exclusivity is the buzzword in the premium segment market. With builders promising to give the best that money can buy, luxury living is no longer the stuff of dreams.

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Nariman Point Real Estate Values Still Going Up

By Vipin Agnihotri

It was once the nerve centre of all corporate activity until it collapsed after the property market crash over a decade ago. But at this point of time, Nariman Point- the Mumbai’s first commercial business district is not only back on its feet, but its real estate seems to be once again booming.

When I visited Nariman Point yesterday, I realize that there is virtually no office space available here. It’s quite surprising because barely two years ago there was 25 percent vacancy in most of the buildings here.

“Between January and December 2006, property prices and rentals in Nariman Point have appreciated by 70 percent to 80 percent. There is no availability for large floor space offices since the last six months. Only a few small offices 500 to 2000 sq ft in size are available,” pointed out property consultant Kulshum Mustufa.

Few of the experts are expecting the all time high record of a Nariman Point property transaction to be broken in the coming months. It is worth mentioning in this regard that in October 1995, at the height of the then raging escalating property prices boom, the prime real estate of Nariman Point recorded two transactions at the rate of Rs 38,000 a sq ft in Maker Chambers.

It has come into the notice of The India Street that from Nariman Point to Malad and Powai, rental values have appreciated because of limited supply of office space. Theoretically speaking, space taken up by real estate funds, investment banks, insurance and corporate sectors has led to a significant drive for rental values for grade A quality space.

Prices in Nariman Point, with no new development, have sharpened 100 percent over 18 months. At present, lease rentals here are in the range of Rs 225 a sq ft to Rs 275 a sq ft. Point to be noted here is that at the beginning of the year it was around Rs 100 to Rs 250 a sq ft. Reclaimed from the sea in the 1970s Nariman Point was one of the most costly real estate enclaves in the world. During the property boom in the early 1990s, average property prices here were in the region of Rs 25,000 to Rs 30,000 a sq ft.

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Mumbai Builders to Face Increased costs and Time Delays

By Vipin Agnihotri

In last few months, there has been quite a talk regarding the scrapping of Urban Land Ceiling (ULC) Act. Though, Maharashtra government is working overtime to repeal the ULC Act, it has come into the notice of The India Street that Urban Development Department has issued a circular, which is creating quite a headache among developers.

Theoretically speaking, circular by Urban Development Department makes it mandatory for builders developing residential projects on surplus land loaded with Transfer of Development Rates (TDR) to get a nod of approval from Urban Development Department.

The circular by Urban Development Department means that builder will not only have to seek exemption under the urban land ceiling for plots more than 500 sq meter but would also have to get a separate no objection certificate from the Urban Development Department for loading TDR on such surplus land- until and unless controversial ULC Act is repealed.

Officials of Urban Development Department are not that bother about developers concerns. “The government will interfere only where exemption will be granted on surplus land. The government is within its power to issue such circulars. We are not putting any restriction on the construction but as the government is allotting the land to builders and individuals, it can put forth conditions for lading TDR on such lands,” pointed out government official.

It is worthwhile pointing that to get exemption, the builder had to give an undertaking that he would use the land for low cost housing. Most of the builders told The India Street that the circular goes against the objective of repealing ULC.

In my opinion, once the lands are exempted from ULC developer can exploit the potential FSI on the land. This will have an adverse impact on TDR projects developed on exempted lands. No doubt, its ridiculous that on one hand government wants to repeal the ULC, and on the other side they are sending out a circular to get no objection certificate from ULC for TDR projects on surplus land.

Plenty of the projects in Mumbai, especially in suburban areas may be impacted adversely because of this circular. Of course, if there is some sort of delay in getting no objection certificate, prices will go up and end users will be the sufferers.

All in all, this is not good news for Mumbai builders. With this circular, it will take more time to approve housing projects and subsequently increase the cost of the developer. The consequent delay in completing projects may lead to increase in prices and reduce the availability of the stock.

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India Needs Land Price Balance

By Dhruva Jyoti Chowdhury

Kolkata, India: 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.

Increasing the supply of land – which constitutes about 50 percent of the total project cost at present and is largely responsible for high prices – holds the key to affordable housing. This was the consensus that emerged at the Real Estate Conference organized by Confederation of Indian Industry (CII ) recently.

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Parag Munot, Executive Director, Kalpataru Properties Pvt Ltd., pointed out that while demand has gone up real estate supply and infrastructure have not improved. Ashish Raheja, Managing Director, K Raheja Universal Pvt Ltd., said that while the current pricing will not come down, affordability is an issue.

Sunil Rohokale, General Manager - Head Mortgages and Real Estate, ICICI Bank Ltd., explained that demand is always outstripping supply in the mortgage industry with too many people chasing the same asset.

Sunil Mantri, Chairman, Mantri Group, opined that the current slackness in the market would disappear after September with the Dussera-Diwali period commencing whereas Harshavardhan Neotia, Director, Bengal Ambuja Housing Development Ltd., pointed out that very few developers find low income and middle income housing viable in the present scenario. The government needs to let developer’s access land at cheaper prices, he said.

Dharmesh Jain, Chairman & Managing Director, Nirmal Group of Companies emphasized that until supply increases, the concept of reducing prices will remain just a mirage. Until one flat is chased by ten buyers this problem will remain, he said. Similarly Ramesh Jogani, Chief Executive Officer & MD, Indiareit Fund Advisors Pvt Ltd., stressed that affordability and banks introducing liquidity in the system were the major issues at present. The government needs to promote large format schemes with a specified time period. Anuj Puri Conference Chairman & Chairman and Country Head, Jones Lang LaSalle Meghraj, said that 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.

Advocate Anil Harish, D M Harish & Co felt that the emphasis should be on creation of new areas with infrastructure and facilities rather than further developing existing urban areas while K Srinivas, Managing Director, Gujarat Urban Development Co. Ltd., highlighted the fact that close to 50% of ‘close to urban’ areas can be urbanized but are not put to urban use.

Ness Wadia, Jt Managing Director, The Bombay Dyeing & Mfg Co Ltd, highlighted the soaring land prices in metros like Mumbai. He stressed that there is a huge issue of speculation and customers need to feel that they have a good deal. Pawan Malhotra, Managing Director & CEO, Mahindra Gesco Developers, pointed out that building office spaces for small industries offers a great opportunity to developers.

Lalit Kumar K Jain, Chairman, Kumar Builders opined that speculative development in commercial spaces is very low, primarily for incubation spaces so there is no risk on the supply side. Satish Magar, Chairman & MD, Magarpatta Township Development & Construction pointed out that no developer is going to build offices and wait for customers to come.

R N Bhaskar, Chairman & Managing Director, e-convergence Technologies Ltd, underlined the need to build for the future whereas R K Agarwal, GM-Corporate Real Estate, Hindustan Lever Limited, emphasized that infrastructure has to be in place before corporates take up office space. Capt K Srinivas, Vice President Procurement & RESO, Mphasis, said that it was useful for corporates to have information about the demand and supply for real estate as they needed to consider issues like scalability in future.

Providing an Indian perspective on easing norms for FDI in Real Estate, Niranjan Hiranandani, Managing Director, Hiranandani Group of Companies, said that the secret of reducing prices is to create surpluses and that is only possible if restraints on FDI are removed, while Shobhit Agarwal, President Capital Markets & Investment Sales, Jones Lang LaSalle Meghraj, explained the original objectives behind easing FDI.

Manish Chokhani, Director & CEO, Enam Securities Pvt. Ltd., pointed out that the issue is really about liquidity and access to capital, followed by regulation. Alex Hayim, Director, REIT Property Management Pvt Ltd. stressed that clarity on FDI – what can be done and what not – is the need of the hour.

B S Nagesh, Managing Director, Shoppers’ Stop pointed out that when money comes in, it has to bring in quality. Unfortunately we haven’t seen that happen yet, he said. Ajoy Veer Kapoor, Managing Director, Saffron Advisors, explained that economics, financial inputs and politics cannot be segregated, we have to be realistic. Tarun Joshi, Chief Executive Officer, Brand House Retails Ltd and Shailesh Chaturvedi, Chief Executive Officer, Tommy Hilfiger Apparel India also addressed the conference.

A whole host of financial institutions are looking seriously at entering the reverse mortgage segment. A new concept in India, the reverse mortgage product is essentially a loan provided to senior citizens by mortgaging their homes. Heirs can either repay the loan or forfeit the property. Social and economic conditions have created an opportunity for this segment, particularly with an increasing number of senior citizens living by themselves due to migration of their children to other cities or countries.

Punjab National Bank (PNB) and Dewan Housing Finance Corporation Ltd (DHFC) have already launched reverse mortgage products. GIC Housing Finance Ltd plans to enter this segment in the next 3-4 months. LIC Housing Finance also plans to offer a reverse mortgage product within a month where senior citizens will be given between 40% to 60 percent of the value of their homes as loan with a tenure of 15 years.

According to news reports, other institutions like Allahabad Bank, ICICI Bank and Bank of Baroda amongst others are also evaluating the reverse mortgage segment.

One area that is still unclear is on the tax implications of reverse mortgage. Gruh Finance is one institution that is waiting for clarity over taxation aspects before launching a reverse mortgage product.

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New Capital Value Based System in Mumbai to iron out the big disparity in property taxes

By Vipin Agnihotri

In an attempt to iron out the big disparity in property taxes in Mumbai, state government is all set to finalize the levy of property tax on the basis of Capital Value Based System (CVS). Initial signs are that few Island city residents may be exempted from the new system, or may get discounts in property tax.

It is worthwhile remembering that the rateable value system, coupled with the Maharashtra Rent Control Act, offers a cushion to age-old residential as well as commercial properties against a realistic hike in property tax. Point to be noted here is that a property tax under the rateable value system is calculated on the basis of yearly rent.

When The India Street analyzed the whole situation, it was revealed that in Mumbai all rental properties have the protection of the Rent Control Act, which has more or less frozen rent to 1940 levels or allowed a maximum hike of 5 percent effective from 2000. According to the existing rateable value system, the island city, which is home to old properties, has to shell out a minimal property tax but the same is exorbitantly high in suburbs. Now after the shift from rateable value to capital value there will be rise in taxes for residents of the island city.

Plenty of experts are of the opinion that in case the state government approves the proposed system of calculating property tax on the basis of market capital values, it is quite mandatory that they revise rates in the Ready Reckoner, as there is a big gap between rates indicated in the present Reckoner and prevailing capital values.

For instance, Ready Reckoner values for areas such as Peddar Road and Malabar Hill are in the range of Rs 14,000 to Rs 21,000. On the other hand, average capital values as per the market for all these areas are around Rs 33,000 per square fit.

In my opinion, the impact of the amendment would be much steeper in South Mumbai properties. As a matter of fact, suburban areas may not see that big a differential between old and new buildings. Furthermore, there must be an area-wise assessment taking into perspective actual land rates, infrastructure and amenities being provided and then tax value should be determined.

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Shortage of Open Land Worries Mumbai-

By Dr Suvrokamal Dutta

No doubt, the metropolitan city of Mumbai has gone through a big real estate boom with an ever-increasing demand for all sorts of properties. However, there is a shortage of adequate supply and constraints on the availability of open land within the city’s limits.

On the other side of the coin, there are wide array of ageing buildings that are dilapidated and the problem goes more acute with each passing year. “Though they are in dire need of extensive repairs, societies do not have the resources and necessary funds required to carry them out,” pointed out real estate expert Anil Motwani.

When one takes into perspective the goal of redevelopment of existing colonies with new structures, the Government has floated number of schemes for carrying out redevelopment schemes. When The India Street checked the official data, it come into the notice that in 1999 modifications were introduced to the Development Control Regulations, which in general allow redeveloped properties to rise above the 45 meter limit.

The pivotal factor here is that this modification was needed as additional FSI, which was provided to builders as an incentive for redevelopment, could only be accommodated by going higher. If experts are to be believed, in case of redevelopment of old buildings, builders approach societies that either have some open plot of land or are interested to demolish the old structures to reconstruct new buildings.

The types of redevelopments that are happening are on private ownership co-operative societies and tenanted properties. It is worthwhile remembering that residents of multiple buildings can also get together for redevelopment. “With a much larger area for redevelopment, it provides for better facilities including wider roads and playgrounds. This approach can clearly lead to an improvement in living conditions for residents of these old colonies,” pointed out noted journalist Vedrakish Pandit.

The only downward side with this procedure is that with old buildings being demolished and towers constructed in their place, additional pressure is on the infrastructure. For example, in suburban locations from Bandra to Andheri, residents of old buildings are being paid off to move their homes hence creating room for more development through use of TDR.

With opportunities to grab redevelopment projects the effect on the valuation of properties has gone haywire in the suburbs. In other word, what is worth Rs 8000 per sq ft in case of a redevelopment situation sells at Rs 16,000 to 20,000. Of course, the price offered depends on the final type of use of property.

500 affordable flats ready for sale by next month in Mumbai

By Avadh Singh

It has come into the notice of The India Street that in Mumbai, where unreal property prices have elbowed middle-class property buyers out, around 500 affordable flats will be ready for sale by next month. Initial signs are that the flats are in a price range of Rs 7-10 lakh and are spread across Sion, Vikhroli, Powai, Goregaon, Malad and Dindoshi.

Theoretically speaking, these houses, developed by the Maharashtra Housing and Area Development Authority (MHADA), will probably be the only affordable housing stock available in the city for the middle class.

It is worth mentioning in this regard that Mumbai has faced an almost 30-40 per cent rise in property prices in the last one year, leaving people with no choice but to either substantially raise their budgets or wait for prices to slow down.

“We will advertise for all the houses by July 15,” pointed out official at Mumbai board, MHADA. The pivotal factor here is that the flats are sold through a lottery as the number of applicants is usually in thousands, much more than the available flats.

If experts are to be believed, this year, more than 500 flats will be sold in the lower-, middle- and higher-income groups. Flats in the lower-income group (for those with annual income of Rs 1.20 lakh or less) measure 450-485 sq ft and cost Rs 6.5-9.5 lakh.

Interestingly, even the high-end flats are conservatively priced at Rs 2,200 per sq ft in Powai, where the present market rate starts at Rs 5,000 per sq ft. Property consultants, though, are of the opinion that large chunk of buyers have a bias against the poor quality of construction in most MHADA projects.

MHADA officials while talking to The India Street argue that its focus is on the price, not the quality. “If we promise high quality in lower-income houses, they will cost much more and won’t sell. The higher-income houses are as good as any private project,” pointed out a senior MHADA official, requesting anonymity.

Some 11 year ago, MHADA had priced its high-end Powai project at Rs 3,000 per sq ft. The project found no takers. As a matter of fact, buyers opted pay a little more and buy a home in the nearby Hiranandani Gardens. Eventually, the rates were slashed to Rs 2,300 per sq ft and then, to Rs 2,000 per sq ft.

Falling home prices in Mumbai hits builders

from CNN-IBN A brief video report on the falling prices in Mumbai. This situtation is mostly related to residential projects in India's Northern cities. The India Street sees very little price depreciation in South India or East India.

DLF to invest a third of IPO proceeds in land

Mumbai, India: DLF Ltd has said it would invest Rs 3,500 crore - roughly a third of its planned initial public offering (IPO) - in building up its land reserves. This is significantly lower than its earlier plan of investing Rs 6,500 crore for the purpose.

Announcing its plans here today, DLF said it hoped to raise Rs 9,625 crore through a public issue of 1.75 crore shares in the price band of Rs 500-550 between June 11 and 14.

The new shares on offer will constitute 10.27 per cent of DLF’s post-sale capital. The share sale will give DLF a market value of as much as $24 billion, more than double Unitech’s, India’s biggest property developer.

The real estate major added that it can develop up to 575 million sq ft of real estate space on 10,255 acres (4,150 hectares) of land that it owns or has rights to in 31 cities. The company currently has 44 million sq feet of land under development.

Over half of its land (nearly 5,269 acres) is located in the National Capital Region, 2,708 acres in other major cities and 2,278 acres in the rest of the country.

The company said its current land reserves are sufficient for its planned developments over the next 10 years and provide it with a major competitive advantage, as well as protection against land price inflation.

“We aim to build up land reserves at competitive prices at strategic locations in the country, to gain from them during the upside in the economy,” said DLF Vice-Chairman Rajiv Singh.

While DLF and its subsidiaries own 11.3 per cent of the land reserves, they have sole development rights for 44.6 per cent of the total.

They have agreements to purchase or letters of acceptance for 35.9 per cent of the land, while the rest are joint developments with partners, the company said.

DLF filed its first prospectus in May 2006, which it had to withdraw on account of regulatory objections in August, following complaints by minority shareholders. The company filed a renewed prospectus in January this year. The Delhi High Court recently cleared the issue.

DLF will foray into newer areas in the future, including airport management, financial services, asset management, leisure entertainment and hospital properties, among others.

“We may foray into newer areas if good opportunities are available at any point of time. We can also tie up with foreign partners for the ventures,” Singh said.

DLF is promoted by billionaire Kushal Pal Singh, whose wealth doubled last year to $10 billion, according to Forbes. Singh, 75, a former Indian Army officer, bought land in Gurgaon, 17 miles (27 km) south of central New Delhi, in the early 1980s.

He developed Gurgaon as a significant suburb of the national capital, carving out residential plots and condominiums and commercial buildings that house offices and retail outlets.

Merrill Lynch and Kotak Mahindra Capital will manage the IPO, and Citigroup Inc, ICICI Securities, Lehman Brothers Securities, UBS AG, Deutsche Equities India and SBI Capital Markets will also be the sale arrangers.

Source: BS Reporter.

DLF shares draw premium in grey market

The grey market for the initial public offering (IPO) of real-estate major, DLF has become active following announcement of the dates and price band by the Delhi-headquartered company yesterday. The shares of DLF command an unofficial premium of Rs 26-28 a share in Ahmedabad, which is considered as the most active centre for grey market transactions.

The K P Singh-promoted DLF is raising Rs 9,600-odd crore through the IPO. The shares, with a face value of Rs 2 each, would be issued in the price band of Rs 500 and Rs 550.

The grey market is the unofficial market for IPOs and the premium or discounts indicate the level of retail interest in the public issue. It is also considered as an unofficial price discovery mechanism before the listing.

The unofficial premium for DLF in the grey market is lower, in absolute terms, compared with the recent IPOs such as ICRA Mindtree Consulting, Advanta and Global Broadcast Network, where the prices doubled in the first few days after listing. The share prices of ICRA and Global Broadcast Network doubled on the listing day itself.

The grey market premium of Rs 26-28 a share is not small, as the size of the DLF issue is large at 17.5 crore equity shares. The premium indicates that market players expect the retail portion of the DLF offer to be fully subscribed or even subscribed by two times, said a broker who did not want to be quoted as grey market is not legal.

The returns from the grey market are calculated in terms of money invested and the expected allotment of shares. For instance, if a retail investor puts in Rs 1,00,000 in the IPO application, he/she will get 100 to 200 shares at the lower end of the price band. A premium of Rs 26-28 assures the investor a return of 3-6 per cent within a time-frame of a month, the broker explains. All the profit (or loss) would be borne by the person who pays the premium.

The grey market exists in tier-two cities and areas where the investor population is sizeable, though such deals are not legally allowed. The market is vibrant in Ahmedabad, Unjha, Kolkata and some other cities.

The normal settlement in the grey market is trust-based and the brokers have the backing of big brokers who may be based in Kolkata or Mumbai. This market also offers multiple products.

The premiums for the IPOs are forward deals. There is also a product called koshtak. This product offers interest rates on the price paid per application form, depending on the demand for shares. The interest rates are paid for applying for the issue. The allotment and post-listing premium goes to the person who pays the interest rates.

The interest amount or price per application form for the DLF issue ranges between Rs 2,700 and Rs 2,900 for an application worth Rs 1 lakh.

There is a third product known as “subject to.” The retail investors in most of the IPOs, follow the HNIs (high networth individuals) and QIBs (qualified institutional buyers). Some brokers, acting on behalf of promoters, assure certain returns to high networth investors and if the listing price does not give the assured returns, the broker concerned makes good the returns assured.

Source: Business Standard

INDIAN STOCK MARKET – AN OUTLOOK

By Sundaramurthy Vadivelu

Important Disclosure

The views expressed below are the opinions of the author based on the principles of technical analysis, a science that has been tested and proven for more than hundred years. The views are unbiased and informative in nature. These do not constitute an offer to buy or sell stocks. Every effort has been made by the author to ensure correctness of the information presented. The author cannot be held responsible for omissions, mistakes etc.

Investing or trading in stock markets is a high risk activity. Those who cannot afford to risk their money should refrain from dealing in stocks.

The author has no vested interest in any of the stocks mentioned. He and/or his close associates may or may not be having positions at the time of writing this article.

The reader needs to understand that this article is purely for informative purposes only and all transactions, if entered into by him will be solely at his risk. The author does not guarantee that the projected targets will be achieved within the stipulated time frame.

Source for the price data displayed in graphics and tables:

National Stock Exchange of India Limited, Mumbai, India (www.nseindia.com)

- - - - - - - - x - - - - - - - - x - - - - - - - -

In this article let us analyze the current market scenario, how Nifty has performed during last 4 years and comparison of index vis a vis some of the individual index stocks.

Current Scenario:

As of now, there is no significant threat to the indices. No major reversal sign has been observed in the monthly charts of Nifty. Watch the reversal patterns displayed in the chart below. Bearish “three outside down” pattern occurred in April 2000 and bullish “three outside up” pattern was seen in June 2003. Since then, Indian markets are on a high.

In the absence of strong reversal signs, it may be concluded that markets will continue their uptrend.

Wave analysis:

The following table illustrates the wave count and their retracements:

This means that after the completion of the 5th wave (which needs a confirmation) a downtrend is likely to begin.

The longer term target for the Nifty, when calculated from a low of 920, works out to 4600. This will give wave 5 a gain of 177.20%.

What is the reason behind this huge rise in index?

Like all other financial markets, Indian markets are also governed by the fundamental principles of demand and supply gap. When interest rates were lowered, stock market looked an attractive option and investors began to look for opportunities. Huge foreign funds are another reason for the upsurge. Liquidity is one more factor – one can easily transact with a click of a mouse unlike the old days when physical share certificates were in use.

Whatever be the reason behind any move, it is always reflected in the charts. All other factors, namely, business conditions, economy growth etc. are always discounted when analyzing the market technically.

How many stocks got benefited from this nearly five fold rise in index in the last 4 years? Let us analyze some of the index stocks.

* Adjusted Close 1 due to stock split / bonus / rights issue

** Close 1 as on 31/07/2004

*** Close 1 as on 31/08/2003

It can been seen from the above table that not all the index stocks have performed in the same manner. ABB, BHARTIARTL and SAIL have outperformed when compared to the overall index.

It should be noted here, that the ‘performance’ in stock market by a scrip has nothing to do with the financial performance of the company. It just implies that the investors have chased this stock more strongly compared to the rest.

We can see no direct relationship between the overall index performance and the individual stocks’ performance. This indicates the demand and supply gap scenario for the stocks discussed.

What could be the reason for the uneven performance?

The price of a particular stock on a given day is decided by the market participants. They are

FII’s or the foreign institutional investors FI’s or the financial institutions MF’s or the mutual funds Long term investors Medium term investors Short term investors Day traders Speculators Punters Derivative traders

When thousands of people are trading a particular stock, no one can be very clear of what the other trader thinks. This leads to volatility and uncertainty in the markets.

When one person buys a stock, obvious reason is that he thinks that it will go up. The person who sold the stock thought that it would either go down or he had enough profit or loss.

In a complex scenario like this, price fluctuations happen regularly. The investor needs to take advantage of the situation by buying when the demand just starts picking up for the stock and sell when it just starts diminishing.

Having said that it is difficult for an ordinary investor to completely understand and assess the market status.

What can the investor do now?

Ideally, one would like to take some money home. If one has remained a long term investor and likely to get some profit, he can book it.

Remember that the chance of the profit going down may increase with the time a stock being held.

For the one who wants to invest for long term in stocks, he has to be cautious, as can be seen from the charts and tables provided.

Some thoughts on investing in stocks:

Not too many people understand the stock market dynamics. So take professional advice, consult a qualified and experienced person. He may charge you a little, but it is worth taking the risk than worrying later.

Invest the amount that you can afford to lose. There are only probabilities, no certainties in financial markets.

Keep doing your research. Observe prices at least once a week. If you think you gained a reasonable amount, book your profits at least partially.

Last but not least, never borrow money to invest in stocks thinking that prices will always go up!

Good luck.

Chennai Tops Real Estate

By Dhruva Jyoti Chowdhury

Kolkata, India: In the last decade, when the realty all over the country witnessed a major boom, the price rise of land in Chennai did not rise as sharply as they did in the other metros. That reputation, of being a relatively sober market, has taken a U turn now.

The realtors believe that nearly 1,000 medium and large residential housing projects are coming up within a short span and importantly the buoyant interest rates on housing loans have not dampened the market spirit. That’s the reason for which developers are now occupying even the industrial wasteland which extends from the northern to the western part of Chennai.

SSI Limited has acquired one of the oldest industrial landmarks of Chennai, the Buckingham and Carnatic Mills in Perambur, for a real estate project. SSI is building 5,000 apartments on a 70-acre plot. The 1,000 crore rupees project, with landscaped grounds is projected to change the face of the area which was once a working class suburb. Further SSI expects to build 1,000 apartments, priced between Rs.30 lakhs and Rs.40 lakhs, every year for the next five years. Integrated townships along the GST Road, on the Tambaram-Velachery Road, at Valasaravakkam, Sriperumbudur, Vandalur and at Siruseri is also on the planning list of SSI.

Added to this is the government's move to open up Foreign Direct Investment in the sector. Moreover, the Securities and Exchange Board of India (SEBI) has approved guidelines for the Real Estate Mutual Fund, a scheme to facilitate investments in real estate property which will cause prices to spiral out of control.

Growing economy, participation of foreign investors, younger age groups dominating in population and growth of service sectors have made a positive impact on the scenario of Chennai properties. A large number of NRIs have also contributed in the real estate in Chennai. In order to provide a further impetus, both the Centre and the State government has coughed up 200 crore rupees in initiating building a six lane Chennai bypass Phase II, a cloverleaf structure close to the airport that will directly connect the city to different National Highways by 2008.

The average age of prospective clients now has dropped to 28-35 years as compared to about a decade ago when planning to purchase a house was done on the verge of retirement from services. For travelers who combine business and leisure several up-market hotels have been built in recent years. Feeling the heat, international players such as Courtyard Marriott, Radisson, Hilton and Le Royal Meridien have a visible presence in Chennai while another cluster of international hotels are in the queue.

The rates of land being acquired vary between considerable ranges. The land on the lower side consisting of areas in Mogappair East and West is between 1500 to 1700 hundred rupees per sq.ft while the higher side is 3500- 5000 rupees per sq. ft. in areas like Besant Nagar, Nungambakkam and Mylapore.

Feeling the heat Hiranandani group a Mumbai based builder has already invested more than 2000 Crore in the last few months. Besides the ETA group, DLF and several others have already crossed the 400 Crore mark in the city. This elite group includes Chennai-based realty developer Arihant Foundations in joint venture with J P Morgan. Jain Housing and Constructions Limited have more than 3,000 dwelling units covering more than 2 million sq ft. Its current projects involve another 2.5 million sq ft apart from the other national players in realty including Ansal Properties and Infrastructure limited, K. Raheja Group, Bengal Ambuja Housing Development Limited Prestige Group.

The Non-Resident Indians are the most important property buyers in the city. This NRI constitutes the core of the ‘high value’ market in the real estate sector.

This boom is also paving way for the most ultra modern facilities in every nook and corner of the entire city. The developers also seem to be keen on the fact that the owners should get world class amenities and a quality of life that would be virtually impossible in an ‘independent house’. Swimming pools, penthouses, round-the-clock security, landscaped gardens, play areas for children, ATM-banking facility, open-air theatre, shopping arcade, swimming pools and health clubs, ATM-banking facility, open-air theatre, shopping arcade, play areas, swimming pools and health clubs since most of the projects are located on the outskirts, every need of the residents had to be met in order to make it a self-contained township.

Flats are not the only kind of dwelling units coming up in Chennai. For those who have high levels of disposable income, there are builders and promoters who offer "independent" houses, different from the bungalows of yesteryear. For instance, Isha Homes offers middle-class villas with all facilities. The project, located near the nerve-centre of the IT corridor, provides dedicated Internet connections, apart from a common sewage plant, black-topped roads and other facilities on the campus.

Ravichandran, a civil engineer, started his business in 1997 by building in the range of about 25,000-30,000 sq ft per project. In contrast, True Value Homes' Park Villa projects, a "premium project launched two years ago at Perungudi close to the IT corridor is spread over more than 5.25 acres. It consists of 288 dwelling units. Built adhering to the principles of Vaasthu Sastra, the project has virtually created a mini township.

It is now building residential complexes of 1 million sq ft. land prices in the area shot up from Rs.5 lakhs an acre to Rs.50 lakhs an acre since the past project was completed. True Value Homes, like other big property developers, is building an IT Park at MRC Nagar with a capacity of 4 lakh sq ft. The company is also planning a 100-acre satellite township near Tambaram. Experts predict that that the building activity will soon reach Mahabalipuram, about 60 kilometres from Chennai.

Looking at the vast potential of the Chennai market, The Chennai Metropolitan Development Authority (CMDA) plans to implement a `single window' system for processing building plan applications quickly. The idea is to provide a ‘one-stop shop’ for all the approvals for real estate. Even the State government is not lagging in poking its nose to fill up their empty coffers. Recent reports have indicated that Government acquired about 7,000 acres for the establishment of a satellite town outside Chennai estimated over 30,000 acres.

Presently, an apartment in Velchari, Chennai with 28800 sq ft is costing around 10,08,00,000 rupees. These are 2 And 3 Bedrooms with Power Back-up, Lift, Rain Water Harvesting, Three Phase Power Supply, Stilt +Four Floors and Covered Car Parking. A 3 Bedroom deluxe apartment in Harrington Road with 1776 sq ft, is costing around 4500 rupees per sq ft. The apartment consists of large sit out, building with swimming pool, 24 hrs security, covered car park, on the sixth floor (not the top floor).

Thirunmiyur Apartment in Valmiki Nagar is build on 1213 sq ft and is a 2 Bedroom flat on the 1st floor, with a very large bathroom, apartment complex built on 13.8 grounds (33,317sft). Very near to the sea beach is one of the best location of Valmiki Nagar, as per the builders opine. The apartment is being offered for 56 lakh.

Even the commercial spaces are not lagging far behind in this money race. A 900 sq ft basement office space in a good commercial complex in Nelson on Manikam Road is being offered for about 45 lakhs rupees. Near Arumbakkam Spencer's Daily Total 3,795sft land area with 2,876sft Bungalow, 4 Bedroom with servants quarters well designed, in good condition is available for. 1.60 Crores. (Total price for Land and Building).

A 2000 sq ft new apartment for Sale in Alwarpet with 3 bedrooms with balcony in every room, separate dining and drawing room is being offered for about 9000 rupees per sq ft. At present the total area under development is around 32.5 million sq. ft.

Ascendas Industrial Park 1.0 million sq. ft. Mahindra Industrial Park 0.2 million sq. ft. Ambattur 0.2 million sq. ft. City 7.3 million sq. ft. Ramavaram 3.5 million sq. ft. Old Mahabalipuram Road 19.3 million sq. ft.

Areas and Land being developed for Real Estate, at present

After labeling all pre-IPO investment or private placement to foreign institutional investors (FII) in real estate companies as FDI, the government has now decided to bar real estate companies from issuing depository receipts (ADRs or GDRs). The logic of the move is simple. All foreign investment through GDRs and ADRs is to be treated as FDI, which is subject to a three-year lock-in, in the case of real estate companies. A host of restrictions including minimum project size in terms of area and a lock-in period were imposed to keep out speculative foreign capital. They did not take into account the fact that real estate companies could be listed. The FDI norms for the real estate sector framed in 2005 were clearly designed for the simplistic situation of single projects from unlisted companies hence the government is becoming entangled in micro regulation.

Retail: Next big thing in India

By Vipin Agnihotri

Lucknow, India: There is no doubt that retail is the next big thing in India as retail shops are doing a brilliant business at present. Lots of Indians believe that the retail shops are a good idea as they provide goods at a discount. After all, why pay more when you get it for less at the retail shops?

Now the Mega Corporation Reliance too has come into the fray of retail market. A chain of convenience stores with the name of ‘Reliance Fresh’ is now spread across the NCR area with an estimated investment of Rs 8,000 crore ahead of Bharati- Wal Mart. It is worth mentioning in this regard that this tie up has thrown up a big and one of the world’s most attractive retail markets with a population of over one billion.

Apart from groceries, fresh fruits and vegetables along with medicines are also available in the shops with a discount that attracts lots of people to these stores. Interestingly, the entry of the big players in the retail business has also brought in its wake considerable controversy.

But despite that, advocates of chain stores are adamant that their entry will not only change the economy and lifestyle of the Indian consumers but also that of the farmers. For example, the stagnation in the earnings of the Punjab farmers would be a matter of the past. Reliance ‘farm to fork’ project will handsomely contribute to the increased incomes, as the farmers will be getting fair share of the price.

“Indian consumers are smart and they are all price conscious and they want to finish the work as fast as they can. They do not go to a provision store for fun. The retail shops are helping the consumers save more and in some way it is capable of supporting the middle class of India,” pointed out Dr Suvrokamal Dutta, renowned financial expert.

Statistic wise: India’s retail sector is wearing new clothes and with a three year compounded annual growth rate of 46.46 per cent, one can safely say that Retail is the fastest growing sector in the Indian economy. Experts believe that traditional Indian markets are making way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. What’s more, western style malls have started making their presence felt in metros and second rung cities alike, giving Indian consumer an unparalleled shopping experience.

According to Prashant Jha, correspondent of local business daily, India’s big middle class and its almost untapped retail industry are pivotal attractions for global retail giants interested in entering newer markets. While organized retail in India is only two per cent of the total US $215 billion retail industry, there are some reports, which are depicting that it will grow at the rate of 25 per cent annually, driven by changing lifestyles, strong income growth and most importantly favourable demographic patterns.

By 2010, organized retailing in India will cross the US $21.5 billion mark from the current size of US $7.5 billion. This is quite different to the situation ten year ago when there was not one shopping mall in India. At the present juncture, in Delhi, Mumbai and their suburbs, there are about 700 malls. Organized retailing in small towns in India is growing at an impressive 50-60 per cent annually compared to 35-40 per cent in the bigger cities.

Indian realty in superfast lane

London/Mumbai: London may top the global property rates chart, but it’s high-end Indian real estate prices that are growing the fastest in the world.

A new study — ‘Wealth Report 2007’ — by real estate consultancy Knight Frank and Citi Private Bank shows that prime real estate rates in India, along with those in Russia and China, soared 40 to 50 per cent over the last year. The British capital, in comparison, recorded a price growth of 30 per cent in the high-end segment.

Pranay Vakil, chairman of Knight Frank India, told HT: “India’s most expensive residential properties, at an average of Rs 50,000 per sq ft, would be in Mumbai. This includes properties like the Chattan Bungalow on Malabar Hill or Sunita Apartments on Napean Sea Road.”

Liam Bailey, head of residential research at Knight Frank, said upcoming prime locations included St Petersburg and Moscow in Russia, Delhi and Mumbai in India, as well as Guangzhou and Beijing in China.

The report points to the growing influence of high net worth individuals — defined as those with $10 million (Rs 40 crore) in investable assets — on the global property market. This is indicated by the fact that prices for the most expensive properties rose on average by more than 14 per cent in 2006 compared to a 9 per cent rise in the mainstream market.

Rapid economic development, together with the creation of new wealthy sections of society, led to intense competition for the best apartments and villas in prime neighbourhoods — and boosted prices, the report said.

Bailey said prime property would continue to outperform mainstream markets. “Over the next five years, we believe the trend of growing wealth and greater wealth concentration will continue,” he said. “There will be a significant demand and supply imbalance in the best prime market locations. Price growth this year will be lower than in 2006, although prime markets will outperform mainstream markets by quite a margin.”

Incidentally, London is home to the most expensive residential property in the world. Prime property in the British capital costs $4,590 (Rs 1.87 lakh) per sq ft, just ahead of Monaco at $4,370 (Rs 1.79 lakh).

Hyde Park is among the most expensive in London, commanding a price of $8,000-$10,000 (Rs 3.26 lakh to Rs 4 lakh) per sq ft, said Vakil.

Source: www.hindustantimes.com

Will Property boom sustain in India?

By Dhruva Jyoti Chowdhury

Kolkata, India: Presently, there is no asset bubble, so nothing to worry for people possessing property in the Indian Real Estate segment. After a bullish run for two years, the graph of the booming real estate market seems to have begun to slide. This has resulted in a virtual meltdown in the real estate segment which was considered to be overheated until a few months back. Now the realtors are setting their sight on sub urban areas for development due to the competitive land prices pushing themselves away from the metropolitan high ends. The experts in this segment suggest that in the three primary segments of the real estate development; primarily residential, commercial and retail, the strong growth with sustainability is achievable by the year 2010. Despite of the graph sliding down, ranking fifth in the retail sector from amongst 30-emerging global retail markets, the Indian real estate segment is being predicted to witness an investment of Rs 100 billion the next two financial years. And if the corporate survey is to be believed, the country will also see a steep rise of 1.19 lakh job opportunities in the real estate segment in the next financial year. The good news for investors and developers is a survey conducted by Knight Frank, a global real Estate consulting group. It states that the real estate segment in India is growing at an annual rate of 30% on the overall basis while a 20% growth rate for the organized retail segment by financial year 2012 is in the offing indicating the retail industry witnessing over a Rs. 100-billion investment up to financial year 2010. Industry feedback and business associations indicate that a large number of firms have evinced interest in setting up special economic zones (SEZs). In the commercial space segment, business opportunity is led by the unprecedented outsourcing activity in the country that in turn is driven by Information Technology (IT) or IT-enabled services. Many global firms are setting up back offices and outsourcing their work to India. According to research carried out by Knight Frank, as the trend gathers pace, commercial space requirement will expand to 100-million sq. ft. by financial year 2008. Of this, almost 75% to 80% will be contributed by the IT / ITES industry. Growth in this sector is being fuelled by incentives given by the Government of India, which has attracted huge Foreign Direct Investment. For example, the Dubai-based real estate major Emmar group is busy setting up SEZs in Haryana at an estimated investment outlay of $1.5-billion. Now days, developers are not risking their moolahs on high priced lands and are under heat at this point of time. The main problem persisting in the real estate market is the affordability. With the prices of all the three segments Sky rocketing, affordability has become a cause of concern for the realtors. This is also because of the high interest rates applied on the developers which are virtually passed on the consumers when they buy properties. Another reason for the realtors for backtracking is the increasing prices of not only land but also allied purchases including cement. The developers are feeling the heat as they are also not finding if feasible to control the labour problem at this point of time. The static income level of the middle income grade individuals who are the real investors in the market, has also added to the woes of the developers. Developers feel that the time is ripe when the Government should step in and introduce salt pans for development to woo the foreign investors who are looking forward to invest in the country. After the strict guidelines by the Reserve Bank of India to the banks directing them to only approve loans selectively and to those only with proper approvals for the land, the business has further being held up. While, investment in the residential segment is estimated to cross the Rs. 9,000-billion mark in the next five years, the number of households that are estimated to be built in the next five years stand at over 5-million. And, all this real estate construction is expected to create a surge in the growth for demand of raw materials, such as cement. Presently, 30-million sq. ft. of available mall space in India is expected to increase to 100-million sq. ft. by financial year 2010. Of the total mall space to be developed, around 75% is in cities like Mumbai, Pune, Bangalore and Hyderabad and National capital Region (NCR). The rest will be in Tier-II and Tier-III cities of Nagpur, Ahmedabad, Chandigarh and Ludhiana. And over the next three years, 300 malls are to be developed in the country including those in the sub urban areas. Reliance Industries announced its retail venture with pan-India footprint covering 1500-cities and towns that will involve an investment outlay of Rs. 25,000 Crore.

Merrill Lynch in its report on real estate trends predicts that the number of malls in these five cities - Mumbai, Bangalore, New Delhi, Hyderabad and Pune will to reach up to 250 by the financial year 2010.