Ireo to invest Rs 3,800 crore on Hyatt-branded hotel, residences

Private equity fund Ireo will invest up to $700 million (about Rs 3,800 crore) to develop luxury residences as well as a hotel and has tied up with the global hotel chain Hyatt for managing the projects.

“We have entered into management agreements with Hyatt Hotels Corporation for branded ‘Grand Hyatt’ residences and a ‘Grand Hyatt’ hotel in our large township project in Gurgaon. The project cost will be between $650-700 million,” Ireo’s Senior Vice-President (Hospitality) Pankaj Dugar said.

The company has already raised $2 billion since 2004 for developing realty projects in India.

It would invest part of this fund and raise some debt to finance the 29-acre project that comprises 265 branded homes, 460 rooms luxury hotel and 4 lakh sq ft office space and 3 lakh high-street retail. This project is part of Ireo city in Gurgaon.

Dugar said the company has also tied up with London-based Foster+Partners for doing the architecture of the project and Tony Chi for interior designing.

The price of the branded residential units will be a minimum of Rs 12 crore. The size of the units would range from 4,600 sq ft to 10,000 sq ft. The project is expected to be operational in 2017.

Read more: The Economic Times HindustanTimes


Highrise Residential Projects

Taking a leaf out of Burj Khalifa story in Dubai, several top realty players like Raheja Developers, Assotech Limited, Supertech Ltd, IREO, M3M, Brys International, etc, have decided to go vertical in the NCR with ambitious projects like Supernova, North Eye, Raheja Revanta, Celeste Towers, Brys Buzz, etc.

Why go up

Going taller leaves more space within the complex that can be utilized for landscaping and recreational purposes, which can enhance the quality of life for residents.

Until recently, customers were a bit apprehensive about highrise complexes, especially in fast developing cities like Noida, Greater Noida and Gurgaon where the predominant feature has been of lowrise apartment complexes.

However, this has changed in recent times. Preferences have been changing gradually over the past few years, and many urban Indians with adequate disposable incomes are now opting for highrises. Most high-end customers are willing to invest in highrise structures that offer 360 degree views, good lighting and ventilation. The amenities in their highrise projects, like car parks, clubhouses, STP plants and large landscape areas make the property a self-sustaining development, which ultimately helps ease the pressure on infrastructure to be provided by authorities.

Read more: The Times of India

Budget 2013 can improve Real Estate sentiment

Indian real estate, a vital sector of the Indian economy that contributes significantly to the Indian GDP, has started to show some signs of recovery and optimism in the sector is slowly returning. Some of the issues faced by this sector include uncertain global headwinds, high inflation rates, subdued retail demand, high interest rates coupled with credit crunch, challenges associated with land acquisitions, stamp duty costs, non-standardized bye-laws and limited institutional exit options. In view of the credit squeeze applied to the sector and limited funding options, real estate developers have had to resort to disposing non-core assets and land sale to service debt etc rather than operational cash flows as projects have been on hold.

It needs to be b

orne in mind that this sector has extensive backward and forward linkages, both direct and indirect, with nearly 300 other sectors/ industries of the economy and that the housing segment ranks fourth in terms of the multiplier effect on the entire economy, with estimates pointing that for every rupee that is invested in housing and construction, nearly Rs 0.78 gets added to the GDP of India.

Read more: The Economic Times

Delhi, NCR realty developers favor luxury projects over affordable housing

Ireo Victory Valley, Gurgaon

Ireo Victory Valley, Gurgaon

Developers such as DLF, Unitech, Tata Housing, Omaxe, Supertech and Amrapali that had initially promised to roll out affordable projects to attract buyers are now dropping the idea, despite the demand for houses, as narrow profit margins make these projects unviable to the builders.

As per industry estimates, the maximum demand is for houses in the price bracket of Rs 25 lakh to Rs 40 lakh.

According to developers between August 2010 and January 2013, input prices of key raw materials have moved up significantly. For instance, the price of essential materials such as cement and brick has jumped by as much as 60 per cent and the steel prices have doubled.

“The rise in the price of building materials will escalate the overall cost of production, which in turn will be passed on to the buyers,” said R K Arora, chairman and managing director, Supertech Limited. “Therefore it is imperative that the authorities intervene and addresses the issue at the earliest so that further escalation of prices is averted and the losses minimised,” Arora said.

“The increase in the price of building materials has a direct impact on property prices,” said Ashwani Prakash, Executive Director, Paramount Group. “We are trying our best to absorb the impact of the prices within the prevailing property rates instead of passing the burden on to the buyers,” he said.

Read more: Business Today

Delhi Development Authority to triple floor area ratio, city to go vertical

Delhi’s planning body may allow houses that are built for the poor and middle-class to go vertical by tripling the floor area ratio (FAR) from 200 to 600, as the city copes with growing housing shortage, government officials said.

The officials, who asked not to be named, said the union urban development ministry, which administers Delhi’s civic and urban planning bodies, has asked the Delhi Development Authority (DDA) to increase the FAR, and include the revised figure in the Delhi Master Plan 2021, an updated version of which is likely to be released by May this year.

FAR is the ratio of the total floor area of a building to the plot area. The concept underlying FAR is utilisation of land in the most optimal manner. If the current limit is relaxed, DDA can potentially build high-rise apartments which could reach up to twenty floors in certain locations, as compared to four-to-six floors now.

Read more: The Economic Times

The Vital Factor

Experts recently pointed out that the construction and infrastructure industries are directly connected to India’s growth

The global economic realities had forced the construction and infrastructure industry into cautious optimism but it’s time to look forward to the future with confident optimism.” This was the message of Mr. M F Farooqui, Secretary – Department of Heavy Industry, Government of India, when he addressed the ICEMA – Indian Construction Equipment Manufacturers’ Association’s ‘Conference on Infrastructure Development – Deliverables and Imperatives’ affiliated with Confederation of Indian Industry (CII).

“GoI recognises the synergy and strong correlation between India’s growth story and the construction industry. In the 12th five-year plan we are looking at 8% GDP growth rate and the construction industry has to play a key role. The industry is both the cause and effect of this growth as it gets the economy into a virtuous cycle where more investment in the industry leads to more job and growth of GDP thus growing the economy which then leads to more investment in the sector. It employs 30-35 million Indians directly and indirectly.”

Read more: The Times of India

Verification of land ownership now must before Department of Town and Country Planning’s licence

Following the procedural irregularity in giving licence to a builder, the Department of Town and Country Planning (DTCP), in a recent order, has asked its officials to obtain land ownership certificates only through official channels.

Anurag Rastogi, director general, DTCP, has issued the internal office order after a legal case being heard in Punjab and Haryana High Court against the builder for fudging the land ownership records for a commercial housing project in Sector 65. TOI has a copy of the order, which has been circulated to all STPs.

According to the DTCP officials, a builder was issued licence in 2007 and in the application of builders for the licence, Gurgaon Tehsildar had stated that the builders/companies are owners and in possession of the land, whereas the land, measuring 5.025 acre out of 7.15 acre applied for licence, was already in the name of some other companies.

Read more: The Times of India


Budget 2013: GE CEO Jeffrey Immelt want a progressive budget to boost infrastructure


Jeffrey Immelt

General Electric chairman and CEO Jeffrey Immelt would like India’s Union Budget for 2013-14 to be progressive, boost infrastructure and make India a more attractive destination for foreign direct investment. But he is quick to add that GE understands the complexities and intricacies of democracy in India and is here for the long haul.

Immelt, who has headed the $147-billion US-based conglomerate since September 2001, likes to describe himself as an “old India hand”, having made his first visit to India way back in 1985.

“You have to be really fast on your feet here,” he said during a press interaction on Friday.

“For every door that is closed in India, another will open. If there are three doors at the back and two are locked, the third will be open. When GE first came to India, we were focused on the market. But, we also found high-class engineering talent and business process outsourcing. Today, we are developing some of the most innovative healthcare technology products in India, which we believe we can eventually take to other markets, including the US and Europe.”

Read more: The Economic Times


CMC expands its education network in Delhi NCR

CMC Academy, the IT Education arm of CMC, launched an authorised training centre at Gurgaon, Delhi NCR, as part of its initiative to make large numbers of youth employable by providing job-enabled training.

“CMC Academy offers industry-relevant education and training of the highest quality, preparing the youth for a strong career across a variety of jobs. We are happy to have KM Ventures as our franchise partner,” said Arun Varma, global business head for education and training at CMC. “We are expanding capacity across the country to address the growing demand for vocationally-skilled youth by the industry and have recently entered into an alliance with Unitec Institute of New Zealand for offering high-end vocational programmes,” he added.

As Tata said, during the inaugural ceremony held on February 24 in Gurgaon, Kunal Mallik of KM Ventures, franchisee of CMC Academy, said, “Gurgaon has a growing IT and services sector, and is an education and training hub attracting students from the region and across the country. CMC Academy will enable graduates and students pursuing graduation in any field to get them employable for IT jobs. We are delighted to be associated with CMC in their education and training initiative.”

Read more: Financial

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