Gurgaon has always remained on the wish list of all real estate enthusiasts. Whether for end usage or investment, the locality has always offered a plethora of residential options. A recent trend that is now visible in Gurgaon is the increasing demand for new launches as compared to the ready to move in units.
The residential market in Gurgaon is clearly divided into to two segments today. Firstly, the new launches and secondly, the ready to move in or projects nearing completion. Ready to move in apartments are generally a preferred option for home buyers. However, Gurgaon is witnessing enhanced demand for newly launched projects. This demand is primarily driven by the investors.
Sanjay Sharma, director, Qubrex explains, “Buyer demand in Gurgaon is slowly getting inclined towards the newly launched projects. This trend reflects an ever growing investor interest in Gurgaon as they are required to pay just 10 per cent of the total cost as booking amount. On the other hand nearly 70 per cent of the total cost needs to be paid for a project that’s ready or nearing completion.”
Read more: Magic Bricks
Luxury Homes Now More Expensive
Luxury housing will pinch even more now! With the Budget announcement to reduce the rate of abatement from 75% to 70% on homes and flats of 2,000 square feet and above or those costing Rs 1 crore and above, luxury homes will become more expensive for buyers.
Experts say that the reduction will have an impact on service tax, which developers will pass on to the consumers. “Effectively, this translates into an increase in the service tax outflow, which means that luxury housing will now become even more expensive,” says Anuj Puri, the chairman and country head of Jones Lang LaSalle India.
Boman R Irani, the CMD of Rustomjee Group, says, “This will lead to an increase in service tax outflow from 3.09% to 3.71% in the coming year, which will be passed on to the consumers.”
As per the Jones Lang LaSalle report, there are 182 residential projects in the luxury segment, which have been launched in the top seven cities: the Delhi NCR, Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata. The total value of these luxury homes is estimated at $30 billion.
Read more: The Times of India
DLF, Reliance Group – top wealth destroyers’ list
India’s largest real estate firm DLF and companies belonging to the Reliance Group led by Reliance CommunicationsBSE -2.40 % (RCOM) topped a list of local firms whose market value has eroded the most over the last five years in a sharp slide from of the peak of 2008. And the reason? Over-leveraging, changes in government policies, aggressive overseas acquisitions and governance issues.
ETIG carried out an analysis of companies with a valuation of over Rs 5,000 crore and whose market capitalisation has eroded substantially from a peak in 2008, when the economy and the markets were buoyant. It shows that the Delhi-based DLF, which had a market cap of over Rs 1.8 lakh crore in 2008, has seen three-fourths of it being eroded. It is now valued at Rs 47,000 crore. Five years ago, DLF aggressively acquired land banks or parcels which led to a significant rise in the company’s debt.
Back then, investors were quick to assign high valuations to land banks on the assumption that the company would develop projects over the next few years, which could translate into huge earnings growth. However, after the slowdown in 2008 and the subsequent years, the commercial property market lost steam, leaving the company to handle its huge debt burden. DLF’s cash flows in the last few years were just about adequate to service debt with its debt having doubled to over Rs 25,000 crore during this period. Its debt in the last five years has gone up by almost 70% while earnings have dropped by 85% owing to rising interest costs and a slowdown in sales, resulting in a 75% market cap erosion over the last five years.
Read more: The Economic Times
The chances of ratings downgrade are quite low: Nikhil Johri
India has been on the watchlist of rating agencies, given the frequent revisions in the growth projections. Nikhil Johri, managing director and chief executive officer, BNP Paribas Asset Management India, tells Puneet Wadhwa in an interview that while frequent lowering of growth projection is a cause for concern, from a credit rating perspective it is more than compensated by improvement in the fiscal picture. Edited excerpts:
What is the sense you are getting from the foreign institutional investors (FIIs) as regards India? Do opportunities in other emerging markets / BRIC countries appear more lucrative?
FIIs continue to view India favourably despite the recent relative underperformance of India versus other emerging markets (EMs) and developed markets. Their confidence largely appears to be based on the belief that the worst is over for the Indian economy. And, with continuing reforms, fiscal consolidation and lower interest rates, things should steadily start looking up for India. The phase of policy rate cuts augurs well for the markets.
Read more: Business Standard
L&T to raise over Rs 2,500 crore by selling 20% in infra arm
L&T Infrastructure Development Projects is in advanced negotiations to divest up to 20% stake to marquee investors, including Malaysian sovereign fund Khazanah. Abu Dhabi-headquartered Mubadala Development Corporation and US-based fund Capital International are also in the final list of potential investors, according to three people familiar with the negotiations.
The infrastructure arm of LarsenBSE 0.13 % & Toubro, which handles assets worth Rs 45,000 crore, will raise up to Rs 2,500 crore by selling stakes to potential investors, the people said.
The proposed transaction will value the infrastructure company at around Rs 12,500 crore, or just under $2 billion, making it one of the larger fund-raising exercises in recent times. It also signals continuing appetite for quality assets despite the gloom that surrounds the Indian infrastructure sector.
L&T IDPL Managing Director KV Venkatesh described queries on the transaction as speculative. “I do not want to comment on any specific transactions. These are all speculative in nature.”
Khazanah and Mubadala Development Corporation did not answer questions on the subject.
Read more: The Economic Times
The Monster Employment Index for February 2013 rises 16% year-on-year
21 of the 27 industry sectors monitored by the Monster Employment Index registered expansion in online recruitment activity between February 2012 and February 2013.
Shipping/marine sector (up 59%) followed by media and entertainment (up 41%) demonstrated the highest annual growth among sectors while printing/packaging sector (up 39%) also showed good growth. Production and manufacturing however, showed the steepest annual decline (down 10%).
“The Monster Employment Index India exhibits positive annual growth owing to cautious ‘optimism’. This is reflective of the confidence that employers are showing in the resiliency of the Indian economy,” said Sanjay Modi, Managing Director, Monster.com (India/ Middle- East/ South East Asia) in a statement.
Online demand also improved in 10 of 13 occupational groups monitored by the index between February 2012 and February 2013.
Arts/creative (up 43%) followed by customer service (up 32%) had the highest annual gains among the occupational groups while senior management (down 51%) showed the steepest annual decline.
Online recruitment activity was up on the year for 10 of the 13 locations monitored by the index. Chandigarh (up 39%) followed by Ahmedabad (up 37%) led all cities in annual growth. Among major metros, Kolkata (up 36%) and Chennai (up 31%) registered the highest annual growth.
Read more: The Economic Times
Reshaping Mall Culture in the NCR
With an estimated current urban population of over 27 million people (as per the Census 2011 provisional data) and based on an ideal mall space ratio of 1 .2 sq ft per capita, the Delhi NCR can currently absorb total mall space of 32.460 million sq ft in GLA (gross lettable area).
Another reason for the rising popularity of malls is that they have been designed as modernistic shopping complexes offering best-in-class retail-cum-entertainment avenues to suit diverse customer profiles.
A report estimates that the ideal per capita mall space in India’s Top 20 urban centres is about 1.2 sq ft per person, but this can fluctuate from 1.0 sq ft and 1.5 sq ft in different micro markets based on the percapita income of that particular micro market.
The demand and supply scenario, both current as well as projected till 2014, for mall space in Delhi and the NCR areas like Gurgaon, Faridabad, Ghaziabad, Noida and Greater Noida, will see significant growth.
Read more: The Times of India