Taking into account the future property prospects of real estate sector in Indian capital, Dubai-based Sherwoods Independent Property Consultants has set sights on New Delhi property sector and will open an office over there shortly.

Property adviser in Dubai, with a strong presence in the UAE as well as Europe, foresaw New Delhi's buoyant housing market with rising demand among the burgeoning middle class as India's economy booms.

Sherwoods estimated that there is a supply It also aims to beef up its presence across other major Indian cities. As well as showing signs of recovery from the global crisis, interest rates in India have from fallen from 11.5 per cent to 9.25 per cent, making mortgages cheaper.

Indiabulls Real Estate Ltd. said Wednesday it has raised around 26.56 billion rupees ($557 million) via a share sale to institutions, joining a growing list of Indian realty companies that are raising funds to reduce debt and boost liquidity.

Indiabulls, one of the country's biggest property developers, issued about 143.59 million shares to institutions at 185 rupees each, the company said in a filing to the Bombay Stock Exchange.
Indiabulls, part of the diversified Indiabulls Group, didn't identify the investors and company executives didn't immediately respond to queries.

A person familiar with the matter said Tuesday the shares were sold to 49 institutional investors from India and overseas. Morgan Stanley was the sole bookrunner for the deal, the person said.
Higher borrowing costs and fears of job losses in a slowing economy have hit property sales in India, affecting cash flows of the realty companies. This has led several developers to raise capital via share issues, asset sales and also replacing their costlier debt with cheaper loans.
The companies are also introducing mid-priced residential projects and offering customized loan packages to lure customers.

"Most real estate companies across the region (India) had improvements in access to capital from January/February this year," Unmesh Sharma and Gautam Duggad, Mumbai-based analysts at Macquarie Research, said in a recent note. "Only now do Indian property developers appear to be experiencing better capital conditions."

Macquarie rates India's property sector overweight, citing improving liquidity for the property developers.
Founders of DLF Ltd., the country's biggest property developer by market value, raised 38.60 billion rupees on May 13 by selling a 9.9% stake to investors that included HSBC Holdings Inc. and Fidelity.

Unitech Ltd., the second-ranked realty company by market value, is also gearing up to raise additional long-term funds via a warrant issue to its founders as well as an issue of securities.
The company had raised 16.21 billion rupees in April by selling shares to institutional investors including HSBC Holdings PLC, Prudential PLC and Singapore's Orient Global.

Unitech plans to repay up to 17 billion rupeesc of debt in the current financial year that began April 1 through cash flows from sale of apartments and shopping malls, a senior company executive, who asked not to be named, said last week. Its debt is currently at about 80 billion rupees.

Shares of Indiabulls traded 5.1% higher at 210 rupees as of 0724 GMT on the Bombay Stock Exchange, compared with the benchmark index which was down 1.4%.
Shares of Indiabulls have gained 52% since January, outperforming a 46% rise in the BSE's realty index.

With the UPA returning to power, the property pundits anticipate the revival of real estate market in the northern region that has witnessed shrinking of transactions when the country was in election mode. “The sale and purchase of property will now start taking place as the Center is expected to have stable government led by the UPA,” Punjab Properties and Colonizers Association Chairman Anil Chopra told PTI.

The property transactions dipped by 70 to 80 per cent in the northern region ahead of the elections as people were not inclined to invest in the real estate due to apprehensions that no major political party would get majority in the elections to form the government, experts said. “We observed just ahead of the start of the elections that the sale and purchase of land or residential or commercial properties almost came to halt with investors as well as end users preferring to wait till the new government is formed,” Chopra said.

He said that with the demand expecting to start emerging after the elections, the property rates would again move upward which would bring some relief for the realty sector. “We are seeing enquiries for residential as well as commercial properties by customers particularly in Gurgaon and Delhi after the elections which is a good sign for the real estate industry,” Realtech Group CEO Rohit Malhotra said.

As property markets fall world-wide, one of the few consolations for real-estate investors is that some governments have become more open to nonresident property owners. A growing number of them are considering loosening or temporarily suspending foreign property-ownership restrictions in a bid to stimulate their real-estate markets. In January, for example, Beijing issued a one-year suspension of a one-year residency requirement for foreign nationals buying a house. The Cayman Islands and Australia have also recently loosened their rules. Meanwhile, the issue is being discussed in numerous other countries, including the Philippines. Loosening foreign-investment restrictions isn't new. Governments have been attempting to stimulate foreign investment for years in response to swelling interest from international investors. In 2005, India began letting foreigners invest directly in Indian residential and commercial real-estate development. And in late 2006, the government lifted a required 10-year lock-in period on repatriating property sale proceeds, although it's limited to $1 million a year.
Slumping property sales has given the issue renewed urgency, as countries strive to find ways to stimulate local economies. Last month, the historically foreign-investment-friendly government of the Cayman Islands temporarily lowered rates on their real-estate transfer "stamp duty" taxes, including a reduction to 5% from 7.5% on waterfront property. At the same time, the country's real-estate brokers group, Cayman Islands Real Estate Brokers Association, announced a 20% rebate on commissions.
Ways to restrict foreign investment aside from outright bans include high transfer taxes and limits on when and how much money investors can repatriate. Rules can differ depending whether the purchase is a residence or an investment. To be sure, not all countries are choosing to loosen regulations. Some may crack down on foreign investment, blaming it for driving prices to unsustainable levels, says Danny Bance, managing partner of U.K.-based International Property Investment Network, a research and investment services provider for investors. But many governments believe that foreign investment spurs infrastructure development, which spurs economic opportunity, says Mr. Johnson, 59 years old, of Detroit, who got his start developing luxury property in Michigan, including a large Lake Michigan resort. He says he helped convince the British Virgin Islands government to loosen curbs on foreign investment partly through his willingness to hire local residents for senior management positions.

March 18: The Indian markets shed a part of their gains during the final hour of trade on the back of profit booking. However, they ended the day well above yesterday’s closing level. The BSE-Sensex closed with gains of around 110 points, while the NSE-Nifty closed higher by 40 points. Stocks from the mid-cap and small-cap indices ended the day in the green as well. Buying activity was witnessed in stocks across sectors, with realty and metal leading the pack of gainers. However, the BSE-FMCG Index ended the day in the red.

Most other Asian markets closed on a firm note. The European indices are currently trading mixed. Rupee was trading at 51.34 against the US dollar at the time of writing. Real estate stocks ended the day on a firm note led by Akruti City, Mahindra Lifespace, DLF and HDIL. Stocks from the real estate sector have been amongst the worst performers in the past one year. This is mainly on account of lower demand and liquidity issues. In fact, until last week, the BSE Realty Index had fallen by nearly 46% since the beginning of 2009. However, the index has been amongst the top gainers in the past few trading sessions. The reason behind the same is price cuts in the range of nearly 30% to 40% announced by real estate players. While this move may impact their margins significantly, it will benefit the companies by reducing their inventory, bringing about much needed liquidity. It may be noted that a handful of realty players are sitting on a stock pile of projects that were launched a year back.

Auto stocks ended the day on a firm note led by Bajaj Auto and Ashok Leyland. As per a leading business daily, M&M has recently inaugurated its defence auto facility at Faridabad. This facility has the capability to produce nearly 200 specialised vehicles, which will be used by the armed forces, paramilitary and the police. However, it plans to increase the capacity to 350 units in the next fiscal. This facility will also produce bullet-proof versions of its multi-utility vehicles such as Scorpio and Bolero. With sales of the mainstream auto market drying up, companies such as M&M, which have a certain amount of exposure in the defense area, have been focusing on increasing defence supplies.

As per a report issued by McKinsey & Company, India is likely to face a shortfall of nearly US$ 150 bn to US$ 190 bn in funding its infrastructure projects in the current five-year plan period (FY07 to FY12). The reason behind this view is the global economic slowdown and rising interest rates, which have made project financing expensive and financial closure more difficult. It may be noted that the Planning Commission had earlier envisaged infrastructure investments to the tune of US$ 500 bn. Of this, nearly one-fourth was to be spent by the private sector and the balance by the public sector.
Credit: Seekingalpha