Indian and United Arab Emirates firms signed major real estate deals on Monday worth more than $20 billion during a visit by the ruler of Dubai, including plans to build two massive townships in India.

Largest Indian real estate developer DLF said it inked a $20 billion deal with UAE’s Al Nakheel to build two townships in India, with an initial investment of five billion dollars each in the next three years.

A 50:50 joint venture has been signed by the two; DLF and Al Nakheel to develop integrated townships. Construction will begin by the end of 2007, As per an official.


Kolkata Real Estate growing at 150%

Posted by Jack Macferson | 1:39 AM | | 0 comments »

Demand from IT & ITeS sectors encourage developers to build.

The IT and ITES boom in Kolkata has led to a deluge in office supply space with the increase being pegged at a whopping 150 per cent.
According to a latest Cushman and Wakefield report, the total supply of office space in Kolkata for the year 2007 is around 3.5 million square feet, with emerging suburbs of Rajarhat and Salt Lake Sector V accounting for the lion's share. The study indicates that the supply is in tandem with the demand since the vacancy rates in the city hovering between five to eight per cent.

This year, approximately 1.5 million sq ft has been projected for IT/ ITES SEZ in New Town, Rajarhat, which has already witnessed substantial pre-leasing activity. Another 1.5 million sq ft has been booked by corporates like Genpact, TCS, PWC, Cognizant and IBM Daksh in Salt Lake Sector V and Rajarhat.

In 2006, the supply of office space in Kolkata was around 1.35 million sq ft, of which 1.34 million sq ft has been absorbed. This represents a marked improvement over 2005, wherein the supply was at around 700,000 sq ft and the corresponding absorption was around 600,000 sq. Relatively low rentals, easy parking availability and improved connectivity have contributed to the development of the emerging suburbs. Owing to saturation in central business districts (CBD) , Park Circus connector and Rashbehari connector have also emerging as locations for corporate offices.

The study also points out that while majority of the supply will be by large developers, smaller local developers who have proposed IT/ITES offices in the range of 50,000 -100,000 sq ft in Sector V will cater to cost sensitive requirements with low rentals. The study is corroborated by Jones Lang LaSalle report on real estate in Kolkata, released in February 2007, according to which, "Kolkata, whose economy grew by eight per cent in 2005, is home to 175 IT and ITES firms which employ approximately 40,000 people. Rapid expansion and increased business activity is expected to strongly boost demand for speculative built space as well as built-to-suit offices and 4.5 million sq ft of additional supply is likely to be completed by 2007 in Salt Lake and New Town Rajarhat."

Retail clients are also joining the fray.

FMCG company Emami has decided to float a wholly owned subsidiary to make a foray into the real estate sector.

A company official said that Emami had identified realty as a major opportunity, which would also help in mitigating the risks of the FMCG business.

Sources said that with liquidity in excess of Rs 100 crore, the company was well poised to enter the sector. The subsidiary would be formed by the end of March or April, the official said, adding that it would take up select projects where the returns were high and quick. The official said that the subsidiary would take up projects like IT park, shopping mall and residential complexes and these would have an estimated payback period of three years.

Besides the real estate business, Emami is also looking at inorganic growth through acquisitions in India and abroad. The official said that funds are currently parked in interest-generating assets till identification of appropriate opportunities. On the FMCG business front, Emami has registered a compounded average growth rate (CAGR) of 15 per cent for the last three years.

The official said that Enami has decided to invest heavily in brands.

The company has already invested over Rs 120 crore and has roped in some of the leading Bollywood film stars for endorsements. The international business of the company is growing at an annual rate of 40 per cent.

Source: Business - Standard

Commercial Rental Tax issue is taking the face of a big issue with every passing day. The most controversial of the new services that would attract service tax is “services provided in relation to renting of immovable property for the purpose of business”. A simple activity of renting out built up premises or open space or office space in India would now attract service tax. A question that is being raised in this context is, “What is the service that is provided by a landlord or the owner of the property while renting out his or its premises?”

In most of the cases that involve renting out of premises, the only service, if at all that can be called service, is the monthly visit by the landlord’s bill collector to collect rent. Perhaps, there could be a case for service tax where the landlord is providing certain extra services along with the premises; even in such cases the service tax should be only on the services component. Only if it is not possible to segregate the rent amount from the cost of services that service tax
be levied on the entire amount.

However, the moot question remains unanswered as to whether there is any service involved in mere renting of premises. If no service is being rendered then to what extent is it legally tenable to levy service tax on the rental amount itself? In this context, it would be of interest to refer to the provisions of section 297 of the Companies Act, 1956. The said section provides that certain contracts, entailing sale or purchase of goods or materials or rendering of service, in which directors or their relatives are interested should be approved by the board and in certain cases approval of the Central government should be obtained.

Real Estate Getting Techie

Posted by Jack Macferson | 3:42 AM | | 0 comments »

Rising demand for space, strict deadlines, the best possible prices, and a booming industry, this is what anyone will find after stepping in the arena of Indian real estate. This encouraged Indian construction companies and prominent real estate developers to take on software solutions. However, adoption of any modern technology by the real players of the sector at this crucial stage should not come as a surprise for most.

And that in turn has suddenly paved the way for a plethora of opportunities for the software industry. Most pioneering realty firms have taken the assistance of IT in some form or other to strike a difference. Technologies like ERP (Enterprise Resource Planning), CRM (customer relationship management), SCM (supply chain management) and BI (business intelligence) have been helping companies for long. Now, it is a turn of Indian real estate sector to leverage the advantages of same.

Here, it does not mean getting a computer to enter mere entries or managing leg work buy to develop breakthrough technical solutions for project, all by the click of a button. Such software brings a number of benefits, the fact which is wholly accepted by Mfar Holdings, a Bangalore based real estate company, which bought Rs. 15 lakh for realty software jointly developed by Sonata Software and Microsoft. The software SonnetConstruct, helped the company to successfully complete two projects over $1.2 million sq. ft. on time.

Nitesh Estates is in process to finalize a combination of software from Oracle, Wipro, and SAP. The renowned group is to enter new segments like hotels and newer geographies. The existing basic software is inadequate to integrate growing diversity, or to handle the upcoming complexities, says the company’s MD Nitesh Shetty.

Software that is widely used to draft the solutions for such projects. But, a number of real estate players are stepping in realty IT space, including those like Sonata and US-based Aurigo Software. When Sonata pondered over the possibilities of a boom in this sector two years back, it immediately at Microsoft ERP solution Dynamics Axapta and developed on its base line to come up with a solution for the real estate vertical.

Real Estate Fair for NRI's in Dubai

Posted by Jack Macferson | 9:42 PM | | 0 comments »

Inorder to encourage the buying of property (Real Estate) by Non Resident Indian's living at Dubai, a real estate fair is being organised. To meet the growing demand from non resident Indians to buy Indian residential property in their homeland for resettlement, a real estate fair is organised, a property fair at their doorsteps in Dubi between March 9 and 10, 2007 at the Jumeirah Ball Room, Hotel Crown Plaza.

The Indian real estate market has emerged as one of the most attractive options to invest in the international market. But, as the investment amount is large, investors want to know about the developers and the projects developed by them before taking a final decision.' For an NRI it is not possible to come from their work place in a foreign country to India to identify a project, which is a very difficult proposition. This is the reason for a huge pent-up demand among the NRIs across the world to invest in Indian real estate.

This fair will give proper opportunity to all the NRI's to meet the prominent developers in India and discuss the investment strategies, for long term investments. Everyone want to return to India after seeing the unprecedented growth in economy i.e. 9% GDP growth.