Market Trends - Multiplexes Replacing Cinemas Theatres

Multiplexes are not a new concept in India. Chennai (then Madras) had the Devi complex and Diamond/Sapphire/Emerald complex over three decades ago, while Mumbai had Shivam/Satyam/Sundaram complex for the same period of time. But the US had set up movie complexes in the suburbs about twenty years back and this concept is now spreading all over the world. Major movie production houses and media companies, including 20th Century Fox, Paramount, United Artists, Columbia-Tristar/Sony and Warner Brothers, operate multiplexes all over the world.

This concept has gathered momentum lately with the retail boom in India. In fact, several state governments have provided incentives to encourage the multiplexes all over India. The single screen movie theatre has now become a dying breed, with the failure of most Bollywood movies lately. A positive concession to the cinema theatre industry is the deduction of 50 to 100% of the profit earned by multiplexes that come up in the next two to five years. The waiver is restricted to multiplexes, which are essentially in metropolitan cities, but the concession has been extended to second line cities like Kolhapur and Baroda. This concession will spur development in state capitals and entertainment centers like Ahmedabad, Bangalore, Pune and Goa. Several companies are planning several multiplexes in the next 5 years. Companies include Pentamedia, which has 10-12 complexes on the anvil over 5 years and the Essel Group, which plans 12 multiplexes cum entertainment centers over 10 cities. Other groups include Adlabs, Runwal, Sringar Films, PVR Group and Inox Leisure. Overall there are plans for over a hundred such multiplexes coming up all over the country in the next 18 months. Inox Leisure is setting up 8 multiplexes including 4 in Mumbai, with its flagship at Nariman Point, covering 1 lakh sq. ft. opening in June 2003. PVR Group has planned a massive 8-screen complex in Phoenix Mill compound in Central Mumbai. The multiplex will include entertainment facilities and a shopping mall. Pune could well become the city of multiplexes with 41 applications submitted for clearances of the same in the next five years.

States which are offering concessions include Maharashtra, West Bengal, Gujarat, Rajasthan and UP. Maharashtra is currently the hot spot with 20 new multiplexes under construction, since they offer 100% waiver of entertainment tax for the first four years in Mumbai and for the rest of Maharashtra the exemption period is five years. The state has over 230 applications for exemption of entertainment taxes. Maharashtra has the most attractive policy for multiplexes, followed by West Bengal, Gujarat and Rajasthan. The requirements are at least three theatres with a minimum of 1000 seats, which must be completed within two years of the application being approved. HUDCO too has plans to use prime areas in major cities belonging to the Department of Post (DoP) for multiplexes.

Typically, the multiplex model is built around a primary anchor - movies. The revenue generating channels in a multiplex includes box-office collections, rent from display systems, restaurant rentals, food and beverage collections, product launch rentals and promotions by companies. The other revenue streams are often larger than box-foffice collections, but movies are the main pull of such complexes. Several of these multiplexes are being located in shopping complexes and average an investment of around Rs. 5 crore for a four-screen theatre. Having a multiplex ensures about 1,200 footfalls daily, which is great for a shopping mall. There are about 1000 screens planned over the next five years all over the country, joining the existing 12,000 screens. The screens per one million population for India are only 11 as compared to 117 in the US and 77 in France. Though this scheme has not boosted the existing single screen cinema theatres, several theatres are planning to upgrade to the multiplex concept and hence provide a boost to the big screen cinema. There is healthy competition among the multiplexes and the initial high-ticket rates will definitely come down to more acceptable levels. In fact, these may actually spur the declining cinema market in India. The smaller cinema halls provide the owner flexibility to rotate the movies economically. The cinema going concept has changed drastically, becoming part of the “broad spectrum” family entertainment. This is good for consumers and film buffs. The threat of over-capacity of cinema seats has not dampened the multiplex mania currently prevailing all over India.

Market Trends - India's Retail Boom Boosts Commercial Real Estate

The retail boom that is being witnessed in the past few years is bound have a significant impact in the commercial real estate sector. The current size of the retail sector in India is around Rs. 8,10,000 crores (US $162 billion), of which only 2% is organised. Over 12 million retail outlets, mostly run by small shopkeepers, cover the remaining 98%. The retail sector is growing at the rate of 20% per annum and more important, the organised retail sector is estimated to grow from 2% of the total retail market in 2001 to 22% in 2005. Most of this rapid growth will be in the large metropolitan cities. 

The latest McKinsey study titled “India’s Retailing Comes of Age” has predicted a definite retail revolution in India. This is turning out to be very true. India is the last among the large Asian economies to liberalise its retail sector. The “licensing raj” is long over. A number of Indian and international retailers are entering this nascent, though dynamic market. Market liberalisation and increasingly assertive consumers are sowing the seeds of a retail transformation that will bring bigger Indian and multinational players on to the scene. The market is huge at US $162 billion overall. The entry of multinational companies (MNC) has certainly transformed this sector. The supply chain, and consumer interest and awareness in branded products have been built from scratch.

Presently, global players are entering India, indirectly, via the licensee/franchisee route, since foreign direct investment (FDI) is not allowed in the retail sector. Allowing FDIs in this sector will not bring in investments, unless the FDI policies make it attractive for MNCs to pump in capital to fuel growth along with systems, expertise and know how that will also shorten the learning process in India. All the major Indian cities have major commercial projects under construction for retail purposes. In fact, the retail sector has provided the primary boost to the commercial property market all over India. Presently, there are over 55 large shopping malls under development all over India. The retail sector is also getting acceptance in the job market with more and more business schools focusing on the sector and large retailers setting up retail academies. This sector is estimated to create 50,000 jobs per year in the next five years. 

The big Indian retail players include Shopper’s Stop, FoodWorld, Vivek’s, Nilgiris, Pantaloon, Subhiksha, Ebony, Crosswords, Lifestyle, Globus, Barista, Qwiky’s, Café Coffee Day, Wills Lifestyle, Titan, Raymond, Bata and Westside. Most of the Indian players have ready and easy access to prime real estate locations. The international players comprise McDonald’s, Pizza Hut, Dominos, Gautier, Spencer’s, Levis, Lee, Nike, Adidas, TGIF, Bennetton, Swarovski’s, Sony, Sharp, Kodak, and The Medicine Shoppe. Most of the foreign companies have to depend upon shopping malls and rentals for their outlets. This has been a deterrent, since such prime real estate is relatively expensive in Indian cities. 

The Indian consumers are divided into two categories, viz., high-income urban consumers and low-income urban and rural consumers. The high-income urban consumers are willing to pay a higher price for having the choice of quality products and the complete shopping experience in the large retail stores. But, the low-income urban and rural consumers will go for the price sensitive products which are easily available in the smaller stores located nearby. The markets in both categories are very large and hence, there is little direct competition between the two retail sectors. As the awareness and disposable incomes increase in India, the two categories will merge slowly, before the competition actually begins. The minor players do not pose a major threat to the big retailers, because the target consumers are different and the Indian markets are very large. For the up-market client, who wants the experience, quality and choice, the shopping mall concept of the larger retail players is very well suited. However, for the less fortunate clients who prefer lower cost, personal service and home delivery, the smaller unorganised retail players are best suited. So, the threat is minimal in the urban areas for both the small and large retail players, since the markets are very large and varied. But in rural areas, competition will be present, and the minor players will prevail.

The rentals paid by the large retailer chains are relatively high in the organised sector. But, the unorganised retail sectors pay much lower rentals. The bigger players have to occupy larger spaces to get better rates. For instance, if they rent a large area, they will get the space for Rs. 75 per sq. ft. instead of Rs. 100 per sq. ft. The minor players rent small areas at Rs. 5 to 10 per sq. ft. per month. Therefore, the branded products in the large retail sector cost more and their clients are willing to pay the price for the experience. The retail rentals are generally 20% higher than the commercial (office) rates.

India remains one of the last frontiers of modern retailing. The complexities of the vast and varied market will be a challenge. But the retailer who can shape the nascent retail market as well as adapt to India’s unique characteristics will reap larger rewards over the long term. It is clear that the winner in this retail rush is going to be the consumers.

Finance Policies - Impact Of The Latest RBI Policy Review On Real Estate

On the 29th of October 2002, RBI made its mid-term review of the Monetary and Credit Policy. After assessing the economic situation in India, the RBI governor, Mr. Bimal Jalan has reduced the bank rate by 25 basis points from 6.50% to 6.25%. This is the lowest level since 1973. RBI also reduced the Cash Reserve Ratio (CRR) to be maintained by all scheduled commercial banks by 25 basis points from 5.00% to 4.75%. At the same time, the repo rate was also reduced by 25 basis points from 5.75% to 5.50%.

Let us first define the various terms involved in RBI policy reviews.

The bank rate is the rate at which banks borrow from the RBI. This is also the rate at which central and state government borrowings, under the ways and means advances, take place. Any revision in bank rate by RBI is a signal to banks to revise deposit rates as well as Prime Lending Rate (PLR). SBI and BOB have already announced their revisions.

The repo rate is the rate at which the RBI borrows from the banks. This is also the floor rate at which overnight deals are struck. Besides lowering the cost of the funds, a lower repo rate will see the emergence of a short-term yield curve, since yields on a 91-day Treasury bill and repo rate will be the same.

CRR is the cash reserve ratio, which is the percentage of net funds that commercial banks have to park fortnightly, with the RBI to do business. Lowering of CRR means that more money comes into circulation. This is in line with RBI’s stated policy to provide a roadmap with the ultimate goal of reducing the CRR to 3%, which is the statutory minimum level. The direct impact of reducing the CRR is to release more money into the market at no additional cost to the bank or finance company.

Bimal Jalan has asked commercial banks to cut their prime lending rates 
(PLR) - the rate at which they lend money to blue chip companies - and compress the band over it. All banks are expected to follow suit.

The RBI governor, Bimal Jalan, has sent a direct message to the consumers: Go ahead and buy a house with a loan that is getting cheaper by the day. RBI has sent out clear signals that overall interest rates must come down. The Indian economy with its stable rupee, strong foreign reserves, comfortable liquidity, low inflation and supporting global interest rates have helped shape RBI’s policy stance of softer interest rates ahead. RBI also wants the banks to pass on the benefits of the rates to borrowers. This is good news for the real estate industry, since housing finance interest rates will definitely head south. This will further spur the HFCs to widen their base for providing home loans to more people and boost the real estate markets all across India. The lower CRR will also release close to Rs. 3000 crore into the system, part of which will be in the HFC sector. Home loan seekers will get the biggest gains from this continuing drop in interest rates. Besides, these RBI measures will also elevate the bank’s income marginally and also enable them to manage interest rate risk better with lower interest rate risks for banks. This in turn will help the banks to lower the minimum requirements for their clients, enabling them to widen their base of customers and their reach. The overall lowering of the fixed deposit rates in the banks will also encourage individuals to look at other sources of investments including real estate as an attractive option.

The construction industry is on a marginal upswing and will benefit from the increasing trend among the middle class towards ‘borrowing to create assets’. Based on the RBI policy directions, clients also have a good fix on the interest rate trends, which will encourage them to request floating rates for housing loans. Single digit interest rates will now become the norm for home loans.

Finance Policies - Impact Of Kelkar Report On Real Estate

The Kelkar committee, which is the task force on direct taxes, submitted its recommendations to the Finance Minister on the 2nd of November 2002. Dr. Vijay Kelkar, advisor to the finance minister, has recommended sweeping changes on all income tax exemptions (including the standard deduction for salaried employees), significant reduction in tax rates and complete liberalisation of procedures. These tax reforms are different from all previous reforms in that it aims at removing the differential treatment given to various industries over the years, as opposed to lowering tax rates, bringing greater compliance and widening of the tax net. The Finance Minister is not bound to follow the recommendations, but this should have some impact on the 2003 Budget, since his Finance department itself has made this report. The government must have the political will to follow all and not some of the recommendations, keeping the big picture in mind. This complete reworking of the Direct Tax System makes it simple and transparent, reducing compliance costs. Let us examine the impact of the Kelkar report on Real Estate.

• Withdrawal of wealth tax: At present vacant urban vacant land and certain categories of house property are liable to wealth tax. Therefore the proposed abolition of wealth tax will be beneficial to the building industry.
  


• Interest on housing loans: The Task Force has proposed the phasing out of the deduction of interest on home loans for the construction or purchase of self-occupied property. Presently the interest paid on borrowings for the construction or purchase of a self-occupied house is entitled to a deduction of up to Rs. 1,5 lakh, if the construction or acquisition of the property is completed within 3 years from the end of the financial year in which the capital is borrowed. This provision is effective from 1/4/2003, viz. assessment year 2003-04 onwards. The deduction is to be reduced to Rs. 1 lakh for the year 2004-05, Rs. 50,000 for 2005-06 and Nil for 2006-07 onwards. This withdrawal of the interest deduction will have an adverse effect on the purchase/construction of owner-occupied property and will slow down the housing industry as well as the housing finance industry.
  


• Capital gains tax: It is proposed that long term capital gains should be taxable at the normal rate, as any other income of the tax-payer. This would mean that the long-term capital gains would be taxable at 30% in place of the present rate of 20%, except in cases where total income of the tax payer is below Rs. 4 lakh. Besides, the exemption for roll over of capital gains is to be abolished for all schemes other than investment in house or the bonds of National Highways Authority of India. This proposal will discourage investors from entering the housing industry for rental income and capital appreciation returns. Hence this abolition of capital gains tax will have an overall negative impact on real estate, though it will also tend to keep the gains within the housing industry to reduce the tax liabilities.
  


• Removal of section 88 of Income Tax Act: Under section 88, rebate in income tax is allowed for sums paid for purchase or construction of residential property up to Rs. 20,000/- for repayment in any financing scheme. This will further discourage purchase or construction of residential property.
  


• Withdrawal of section 80P of IT Act: Presently a housing society providing loan for house building to its members is entitled to deduction of the income earned from this business of providing credit facilities to its members. Removing this section will have a negative impact on the cooperative housing society business and hence the housing industry.
  


• Abolition of profits and gains from multiplex theatres and convention centers: Section 80-IB provided for a deduction of 50% of profits and gains from the business of building, owning and operating a multiplex theatre or convention center for 5 consecutive years from the initial assessment year 2003-04 onwards. Removal of this deduction will affect the building industry adversely.
  

Low interest rates and tax benefits on the principal repayments on a housing loan have in large measure been fuelling the demand on home loans and growing the realty sector. The Kelkar report to the Finance Minister for tax reforms has put an overall damper to the housing and the housing finance industries. Of course, the Finance Minister does not have to follow the recommendations, but use it as a guideline to plot the future income tax strategy of the nation. The question really is whether the government will aggressively implement the Kelkar package in toto, or do it in a piece meal fashion. The latter is likely to occur. So there is still some hope that the 2003 budget will continue the housing loan tax sops for the real estate industry.

Taxation and Legal - Capital Gains Tax For Real Estate

Sections 2, 45 to 55 under Capital Gains:

• Section 2 defines that land or house property held for not more than 36 months is Short Term Capital Gain (STCG). Otherwise, it is Long Term Capital Gain (LTCG).
• Section 48 defines Computation of Capital Gains (STCG) = Consideration - expenses on transfer - cost of acquisition - cost of improvement
  LTCG = Consideration - expenses on transfer - INDEXED cost of acquisition - INDEXED cost of improvement
• Section 50C defines special provisions regarding consideration where consideration received is less than the value adopted by the stamp dity valuation authority, the value adopted by the stamp duty valuation authority shall be taken as the consideration (wef 01/04/2002)
• The tax on capital gain on transfer of house property are as follows:

1. LTCG on transfer of house property is taxed at 20%
2. STCG is added to income from other sources, and a taxpayer pays tax at the rate applicable to him/her.

• Section 54 concerns the sale of residential house and subsequent purchase of another property. The conditions are:

1. the taxpayer must be an individual or HUF
2. the residential house sold must be a long term asset
3. the new residential house must be

• purchased within a period (T-1) to (T+2) years, or
• constructed within a period (T) to (T+3) years

4. It does not matter whether or not

• The house sold was not self-occupied
• The taxpayer owned any other house property when the sale and purchase is done

5. Concession in taxes if the capital gains (on sale of old house) is greater than the cost of the new house, then only such excess capital gain is taxed. But if the capital gain (on sale of old house)     is less than or equal to the cost of the new house, then the entire capital gain is not taxed.
6. If the taxpayer sells the new house within three years of its purchase or construction, then for the purpose of computation of capital gain on the sale of the new house (remember, this becomes a STCG when the CG on the sale on the old house is greater than the cost of the new house), its cost will be taken as nil. If capital gain on sale of old house is less than or equal to the cost of the new house, its cost will be reduced by the amount of capital gain made (and was exempted) on sale of the first house.
7. Capital Gains Account Scheme: The amount of capital gain not utilized for purchase or construction of new house within the same accounting year, but which is earmarked for such purchase of construction, must be deposited in a specified bank account opened under ‘Capital Gains Account Scheme’, and payments in subsequent years must be made from such account.

• Section 54B applies to capital gain on transfer of agricultural land, if proceeds are invested in agricultural land. Its provisions are similar to those of Section 54 above.


• Section 54F concerns the sale of any asset other than residential house and subsequent purchase of another property. The conditions are:

8. the taxpayer must be an individual or HUF
9. the asset sold must not be a residential house (if it is, S54 applies)
10. the asset sold must be a long term asset
11. the new residential house must be

• purchased within a period (T-1) to (T+2) years, or
• constructed within a period (T) to (T+3) years

12. It does not matter if the taxpayer owned any other house property when the sale and purchase is done
13. Concession in taxes if the cost of the new house is NOT less than the net consideration in respect of the old asset, then the entire capital gain is not taxed. But if the cost of the new house is less than the net consideration in respect of the old asset, the proportionate capital gain is not taxed.

• If the taxpayer sells the new house within three years of its purchase or construction, then the amount of capital gain on old asset, which was not taxed, will now (in year of sale of new house) be charged to tax as ‘LTCG’.
• If the taxpayer purchases within two years from the sale of the old asset, or constructs within three years from the sale of the old asset, any residential house other than “the new house”, then the amount of capital gain on old asset which was not taxed will now (in years when such additional house property is purchased) be charged to tax as ‘LTCG’.
• Capital Gains Account Scheme: The amount of capital gain not utilized for purchase or construction of new house within the same accounting year, but which is earmarked for such purchase of construction, must be deposited in a specified bank account opened under ‘Capital Gains Account Scheme’, and payments in subsequent years must be made from such account.

RBI’s Monetary Policy Inimical To Real Estate: ASSOCHAM

New Delhi, India, September 23, 2007 - The Reserve Bank of India (RBI) should immediately review its monetary policy to remove its excessive focus on taming inflation only and concentrate to reduce mortgage rate, besides take measures to curtail interest rates to enable wage earners to afford dwelling units.

Above observations are made by ASSOCHAM Past President and Chairman, DLF Universal, Mr. K P Singh  while he was releasing the ASSOCHAM Study on `Reality Check on Real Estate’ with its President, Mr. Venguopal N. Dhoot here on Tuesday.

Mr. Singh said that RBI has been framing its credit policy with over focus on containing inflation, totally ignoring its adverse consequences on real estate as the premier bank has not given any thought in reducing interest and mortgage rates and thus the policy is proving to be inimical to real estate growth.

The increase in interest rates and those of mortgage rates, the demand for properties have been eliminated as their prices have gone up beyond affordable limits.  Although, the demand for property purchases was very much there but today affordability has come into question, said DLF Chairman.

He sought that the government should get out of the business of infrastructure building and leave it entirely to private to spur up growth in property businesses just as it played a role of facilitator in telecommunication about couple of years ago.

Unveiling the findings of Study, Mr. Dhoot said that even as default rates on installment payment of home loans have risen around 4.5%, Indian real estate market which is estimated at US$ 14 billion is likely to be US$ 90 billion by 2015 as demand for both commercial and residential property is surpassing supplies.

He, however, pointed out that the study projects that since the real estate sector is growing at 30% rate and the demand will continue to surpass supplies even in near future, it is estimated that US$ 10 billion worth of investment is expected to flow into the sector by end of the year 2008.

The Study further says that lucrative returns ranging from 12 to 30 per cent coupled with cheap and easy availability of funds have seen people from all walks of life investing in the Indian realty. Furthermore, improving institutional framework and fiscal benefits have encouraged more and more players to enter the market. The list of investors includes High Net Worth Individuals, Non Resident Indians, Financial Institutions, Private Equity Funds and Retail Investors.

Housing which constitutes almost 80 per cent of the Indian real estate development has witnessed a huge demand, which is set to multiply further. As per the Global Report on Human Settlement 2005 - ‘Housing crisis in the making’, 40 per cent of the Indian population will require proper housing and basic infrastructure by 2030, said Mr. K P Singh.

Home loans formed 11 per cent of the total outstanding credit of scheduled commercial banks in March 2005, up from just 2.4 per cent in Mar 1990. The sales value of housing construction has witnessed an exceptional leap from Rs. 17.61 crore in 1991 to Rs. 4,182.67 crore in the year 2006. Lower interest rate regime has played a pivotal role in the process.

The rising home loan rates, resulting from Reserve Bank’s measures to control overheating in the real estate market, have severely impacted the genuine buyers, according to a Study of ASSOCHAM.  The Study has also found that the interest payout on housing loans has amplified tremendously with the sharp rise in home loan rates. The annual additional burden comes out to be as high as    Rs. 39,000.

The home buyers have received double blow with rise of more than 400 basis points since January 2006 and property prices mounting by 50-100 per cent in most of the locations. The eligibility of the borrowers has come down by roughly 28 per cent since the hike in interest rates have begun.

The speculative purchasing activity in the housing markets has come down as the funds have become dearer. This is evident by a drop of 60 per cent in the sales in re-sale market of Mumbai, Delhi, Kolkata and Bangalore as compared to 35-40 per cent rise in May 2006.

“While the speculative activity leading to overvaluation in the real estates market is not desirable, it is equally important that the genuine buyers do not get hurt in a move to curb speculation”, said ASSOCHAM President.

The growth in the home loans have been severely affected due to rise in cost of funds.  The growth rates of housing loans had come down to 29.1 per cent in FY2005-06 and 26.6 per cent in FY2006-07 as compared to 49.5 per cent, 73.9per cent and 48.6 per cent in FY05, FY04 and FY03. The ASSOCHAM Study has forecasted that the growth in home loans may slow to 17-20 per cent in the financial year 2007-08.

The home loan to GDP ratio in India is just above 5 per cent, which is significantly lower than the developed markets of the US and the UK, where it is more than 50 per cent.

ASSOCHAM has recommended to the government to repeal the Urban Land (Ceiling & regulation) Act, 1976. The Act imposed a ceiling on the quantum of vacant land that any individual can possess in urban areas, with a view to prevent concentration of urban land in few hand, speculation and profiteering from it. The Act is applicable in states of Andhra Pradesh, Assam, Bihar, Maharashtra, Jharkhand and West Bengal.

Another major recommendation of the ASSOCHAM is the rescinding of the rent Control Act which would be instrumental in meeting the growing need for housing. The Rent Control Act which put restriction on the upward movement of rental values in accordance with market dynamics has led to withdrawal of existing housing stock from the rental market and stagnation of municipal property tax revenue.

Read more India Real Estate Policy stories at the link below:

India Real Estate Policy News

Home loans now slightly cheaper

Mumbai, India, November 17, 2007 - In addition to festival offers by banks on new home loans, some lenders are taking down interest rates a notch.Mumbai, India, November 15, 2007 - In addition to festival offers by banks on new home loans, some lenders are taking down interest rates a notch.

SBI offers floating rates on home loans at 10.5% as against the previous rate at 11.25% for loans up to Rs 20 lakh. For loans above Rs 20 lakh, the bank is charging a higher rate at 10.75%. These rates are applicable up to December 31, the bank said in a statement.

According to research by website Apnaloan.com, as on November 07, floating interest rates were 9.5%-10.5% at Punjab National Bank, 9.75% at Indian Bank, and 10.5%--11.25% at HDFC Bank. Current interest rates at different institutions are available at this link.

Home loan interest rates to come down

Mumbai, India, January 14, 2008 - Leading bankers are suggesting that interest rates on home loans are likely to come down this year. This should be welcome news indeed to millions of borrowers who have seen interest rates go up significantly in the last two years.

First Deepak Parekh of HDFC said last week that he expected interest rates to soften by 25-50 basis points in the first quarter.  Now KV Kamath of ICICI Bank has said that he expects to see home loan rates cut in the first quarter of the fiscal year starting April.

ICICI Bank is also reportedly considering risk-based pricing where more creditworthy consumers would get lower interest rates. However this would require proper functioning of credit bureaus to assess the risk.

LIC Housing Finance launches reverse mortgage for senior citizens

Mumbai, India, February 28, 2008 - LIC Housing Finance Ltd (LICHFL), a leading player in the Indian housing finance sector, rolls out reverse mortgage loans for senior citizens above 60 years of age. The loan will be given on single or on joint basis with the spouse, if the spouse is over 60 years.

The reverse mortgage loan will be offered at a fixed interest rate subject to reset every 5 years. Under the reverse mortgage scheme, senior citizens can avail the loan either on a monthly payment or a lump sum payment or a combination of both. The property evaluated for the loan should have at least 20 years of residual life.

The maximum loan balance shall be restricted to 90% of the value of the property and the loan balance will include interest till maturity. The amount of the loan will take into consideration the property value, age of the borrower, rate of interest etc.

The loan will become due and payable only when the last surviving borrower dies or opts to sell the home or permanently moves out of the home to an institution or to relatives.

Speaking on the occasion of the launch of reverse mortgage, LIC Housing Finance Director & Chief Executive, Mr. S.K.Mitter said “Reverse Mortgages are loans that allow Senior Homeowners convert home equity into cash without leaving their homes and without making monthly mortgage payments.”

SBI launches SBI Reverse Mortgage Loan

Mumbai, India, November 01, 2007 - Leading bank, SBI has launced a reversemortgage loan product designed for the benefit of senior citizens, above the age of 60 years. 

They can avail loans, released in monthly or quarterly instalments or as a lumpsum payment at the beginning, against the security of their self-acquired, self-occupied houses.  The loan will be given jointly if the spouse is alive, provided he/she is above 58 years of age. 

The loan need not be repaid by the borrowers during their lifetime.  They will also continue to stay in their houses during their lifetime.  Thereafter, an option is available to the legal heirs to repay the Bank loan and redeem the house property.  If this option is not exercised, Bank will sell the property and liquidates the loan.  Surplus, if any, will be passed on to the legal heirs.

The loan is available at all branches of SBI.  The loan carries a fixedinterest rate of 10.75% p.a. subject to reset at the end of every 5 years along with revaluation of security and re-adjustment of loan instalments, if necessary.  For a loan of Rs. 1 lac the monthly payment to the borrower on a 10 year loan is Rs.468/- and on a 15 year loan it would be Rs.225/-.  Similarly for a loan of Rs.1 lac, the quarterly payment to the borrower on a 10 year loan is Rs.1,423/- and on a 15 year loan it would be Rs. 687/-.

Average home buyers age in India comes down by 20 years

Mumbai, India, November 17, 2007 - The average age of home buyers in India has come down by nearly 20 years according to The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

An analysis carried out by the ASSOCHAM, `Emerging Age Trends for Buying Dwelling Units for Self-Use’, showed that from 2000 onwards,  the age group for property registration for personal use iwas between  30 to 38 years, compared to an age between 55-58 years for buyers twenty years ago.  The feedback to this effect came to the ASSOCHAM from real estate developers like DLF, Prasvnath, Omaxe, Unitech etc.

The Chamber’s analysis also unveils that just as the age group for buying houses has settled between 30-38, likewise introducing renovations in dwelling units has also come down by 15 years as 20 years ago, introduction of renovation activities would happen at the age of 60, it is now come down on an average to 45 and 48.

The main factors responsible for the emerging trends include high rentals, non-sustainable lease agreements between property owners and those of tenants, rising income levels and easy availability of housing finance, says the ASSOCHAM analysis.

Releasing the analysis, the ASSOCHAM President, Mr. Venugopal N. Dhoot said that the pervasive impression is that due to highinterest rates, number of aspirants forhome loans have declined but the fact remains that the effective interest rate on a loan of Rs.15 lakhs works out to 6.1% upon an interest rate charged at 11.25%.  This rate of 6.1% is effective after home loan seekers has availed of all tax benefits and this is one solid reason which encourages youngsters between age group of   30-38 to register properties in their name for self-use,  clarified Mr. Dhoot.

20 years ago, the availability of housing finance was limited.

As per estimates made by ASSOCHAM, in the next 5 years, India is estimated to require investment worth $ 25 billion within the urban housing sector.  This again has opened up opportunities for foreign investment in the realty sector. An estimated $ 12 billion of investment has been pledged by foreign and domestic funds over the next couple of years.  The forecast commercial space requirement until 2008 stands at 42 million sq. ft.  The average return on investments on commercial property in India is at a promising of 10-12% in comparison of 5-7% globally.

Assocham believes that foreign direct investment in Indian real estate would also make its working more organised.  Besides increasing professionalism, it would bring in advanced technology and help in the creation of healthy and competitive market environment for both domestic and foreign investors.  Moreover, the accelerated development in segments like retail of IT/ITeS office space, coupled with an ever increasing demand for quality residential property, points to a healthy prospects for the realty sector.

If the real estate sector has to thrive and grow, investment in this sector has to become broad based and the common man must have an opportunity to participate in the growth of this sector. The time is probably ripe to introduce concepts like REITs not just to broadbase participation in this sector but also increase the velocity of transactions in this sector.

Bank of Baroda slashes BPLR by 50 bps

Mumbai, India, February 23, 2008 - In order to stimulate the demand for consumer and investment credit in a slowing economy, the Bank of Baroda has decided to reduce its Benchmark Prime Lending Rate by 50 basis points to 12.75% effective February 27, 2008.

With this move, the lending rates on several retail categories of the Bank like personal, home, vehicle and education loans stand reduced and become more attractive.

This will give further relief to Bank's retail customers, as on November 1, 2007 also the Bank had slashed home loan rates on various categories between 25 bps to 100 bps on both the fixed and floating rate categories.

Floating home loans will now become cheaper by 0.50% and the minimum rate in the segment now stands at 9.50% for loans upto Rs. 20 lacs and 9.75% for loans above Rs. 20 lacs. The maximum rate for both the brackets stands at 10.00% and 10.25%, respectively.

Advances for home improvement now stands at 10.75% only.

Car loans will also be attractively priced at 11.00% as there is no time bracket in this segment.

Education loans upto Rs. 4.00 lacs will now be available at a highly competitive rate of 11.50% and above Rs. 4.00 lacs the customers will have to pay just 13.50%.

Trader loans upto Rs. 2.00 lacs will now be available at 12.25%.

The Bank has also reduced the home loan rates under fixed interest rates category by 50 bps along with the BPLR reduction.

Allahabad Bank cuts lending rate by 25 bps

Mumbai, India, March 27, 2008 - Allahabad Bank, one of the leading nationalized banks of the country, has decided to cut its Benchmark Prime Lending Rate (BPLR) by 25 basis points (0.25%) from the present rate of 13.25% to 13.00% with effect from 1st April, 2008. The reduction in BPLR has been announced having regard to present market scenario and the need to provide credit to productive sectors at affordable rate.

Due to the above change in the BPLR, all the existing interest rates linked to BPLR, applicable on all existing and future working capital and term loans, will stand reduced by 25 basis points with effect from 1.4.2008.

The Bank has already announced a cut in the interest rate of fresh Housing Loans by 25 basis points in both floating and fixed term loans with effect from 1.4.2008 for loans up to Rs.20 lacs on all maturities. With the present cut in BPLR, in actual terms, interest on Housing Loan up to Rs.20 lacs in floating term loan will stand reduced by 50 basis points for all fresh sanction w.e.f. 1.4.2008.

Bhiwadi industrial cluster attracts 3 brand new project

Bhiwadi, India, February 22, 2008 - Smt. Vasundhara Raje, Hon’ble Chief Minister, Government of Rajasthan, today laid the foundation stone for setting up an IT / ITES SEZ by Somani Worsted Limited and manufacturing facilities of Jaquar Limited and Orient Craft Limited in Bhiwadi, Rajasthan. Dr. Digamber Singh, Hon’ble Minister of Industries, Rajasthan, also graced the occasion. The establishment of these projects is in sync with the vision of the recent Resurgent Rajasthan Partnership Summit and will give a boost to the rapid industrialization in the state.

Congratulating the investors, Dr. Digamber Singh said, “Rajasthan has been witnessing a robust economic growth of more than 7 per cent per annum and the current pace of industrial development will certainly add thrust to this. The Government of Rajasthan is committed to achieving sustainable development across all sectors and initiatives like these will further enhance the economic growth in the state.”

Mr. Kuldeep Ranka, Managing Director, Rajasthan State Industrial Development & Investment Corporation (RIICO), said, “We welcome these companies with open arms and will ensure a conducive business environment for their sustenance and growth. RIICO will continue to facilitate growth in the region by providing robust infrastructure.”

Somani Worsted Limited will be developing an IT/ ITES Special Economic Zone, which will be named as ‘Silicon City’, and will be developed on 50 acres with a total investment of approximately Rs 700 crore in the first phase. The Silicon City is expected to generate direct employment for about 50000 (fifty thousand) in the IT sector and approximately 200000 (two lakhs) indirect jobs in Rajasthan.

Orient Craft Limited, one of the largest garment export houses in India, will establish its ‘Flagship Integrated Apparel Manufacturing Campus’ at Pathredi in Bhiwadi, targeting a business of Rs. 2000 crore by 2010. Orient Craft has been working with some of the most renowned fashion designers, brands and retailers like Gap, Tommy Hilfiger, Dillards, Polo Ralph Lauren, Marks & Spencer, Marc Jacobs and many others. The project is expected to cost around Rs. 100 crore in the first phase and is likely to employ 8000 workers. When completed, this will be the first integrated apparel & textile manufacturing facility of its kind in India.

India’s largest manufacturer and exporter of bath fittings, Jaquar Limited, will also be setting up a new, state-of-the-art plant in 12 acres at Chopanki for manufacturing concealed cisterns (a joint venture with a Monaco-based company), shower enclosures (a joint venture with a German company) and whirlpool systems (a joint venture with an Italian company). The new manufacturing unit with an estimated investment of Rs 70 crore in the first phase will provide employment to about 1000 people. 

Vodafone launches 34th Vodafone store in Mumbai

Mumbai, India, April 01, 2008 - Vodafone Essar, one of India’s leading cellular service providers has announced the launch of its 34th Vodafone Store in Mumbai. The new store aims to deliver a complete Vodafone experience to customers and is located on the 1st Floor, Rehman Mansion, Dr. B.A.Road, Hindmata, Dadar East. The new Vodafone Store is open all days of the week from 10.00 am – 7.00 pm. This takes the strength of Vodafone Stores in Mumbai to 34 and that of self-service kiosks to 63.

Along with the availability of new connections, Vodafone handsets and various value added services, the store offers a dedicated area for customer queries and bill payments. There is a 24 X 7 Self Service Kiosk where customers can view and pay their bills, recharge their prepaid connections, activate and deactivate services such as caller – line – identity, roaming, ISD, itemized billing and Vodafone Live. Customers can now look forward to even faster service as all Vodafone Stores are connected with high speed broadband connectivity.

Naveen Chopra, CEO - Vodafone Essar-Mumbai said, “Vodafone now spreads across 135 Ministores and Five Zonal Offices. Each of these offices is Autonomous.  In our constant endeavor to keep our customers always satisfied and smiling, we are extremely pleased to announce the opening of the 34th Vodafone store in Mumbai just a month after the launch of 33rd Vodafone Store. The new store at Dadar East is the most centrally located store so far, making it convenient and accessible to all our customers.”

India invites UK investment in infrastructure

New Delhi, India, January 21, 2008 - India is seeking investments from UK in the areas like highway projects, bridges, expressways, ports, power generation, water plants, water management techniques. This was conveyed by Shri Kamal Nath, Union Minister of Commerce and Industry, during the India-UK CEOs Round Table, here today, and added that so far investments from UK was mainly from the sectors such as telecom, chemicals, fuels, service sector etc. The Round Table was attended by Lord Digby Jones, UK Minister of State for Trade and Investment and Dr. Ashwani Kumar, Minister of State for Industry, besides senior officials from both the countries.

Drawing the attention of CEOs, Shri Kamal Nath said: “We consider UK as one of the most important source of FDI for India not only amongst the EU countries but also vis-à-vis other countries in the world. With a share of 37% in EU’s total outflow of FDI in non-EU countries, I think UK is a very natural and important partner for a country like India that requires massive investment for its infrastructural needs”.

India is now the 3rd largest foreign investor in the UK in terms of projects, second only to the US and Japan. In the first half of 2006, according to Ernst & Young's European Investment Monitor 2006 Report, Indian investment into the UK overtook Japan, making India the 2nd largest investor in the UK. UK is the 3rd largest investor in India with a cumulative inflow of US $ 4.06 billion, (6.48%) since 1991. FDI inflows from UK in 2005, 2006 and 2007 (up to October) have been US $ 219.3 million, US $ 1749.8 million and US $ 398.5 million, respectively.

On the trade front, UK is the 4th largest trading partner of India with bilateral trade of US $ 9.8 billion in 2006-07, which is about 3% of India’s total trade. Percentages of bilateral trade compared to total trading basket of UK (US $ 1 trillion in 2006) are negligible. This again indicates an immense potential existing between the two countries.

UK wants to be a genuine partner in developing India's Infrastructure

New Delhi,India, January 22,2008 - Speaking at the inaugural session of the UK-India Infrastructure Conclave on January 16, organized by the Confederation of Indian Industry (CII) and UK Trade and Investment (UKTI), in Delhi, Digby, Lord Jones of Birmingham,UK Minister for Trade and Investment said that his country wants to be a genuine partner in developing India's infrastructure and not just a contractor. Given India's rising stature in the global sphere, he also endorsed India's membership of the UN Security Council and the G-8. He said that several British companies such as Bombardier and Mott McDonald are already engaged in developing India's infrastructure. He projected UK as an attractive and open global financial centre, ready to share its expertise and participate in India's PPP ventures in the infrastructure sector.

Mr. Ashwani Kumar, Minister of State, Department of Industrial Policy and Promotion, Government of India, agreed with Lord Jones in regard to special ties with the UK and enormous potential for British-Indian partnership for the development of sustainable and efficient infrastructure. He said that the lack of adequate infrastructure costs India 2% of potential GDP growth annually. He concluded the speech with two major points, stating that UK is largely underinvested in India right now in regard to what it should be and that India is awaiting and welcoming UK investments.

Mr. Gajendra Haldea, Advisor to Deputy Chairman, Planning Commission, Government of India, said that increasing investment in infrastructure from the current level of 5% of GDP to 9% by the end of the Eleventh Five Year Plan would imply an investment of $500 billion over a period of five years. The emphasized the need to attract private sector investment and the need for greater acceptance of PPP projects.

The Conclave was chaired by Mr. Vinayak Chatterjee, Co-Chairman of CII National Committee on Infrastructure and also the Chairman of Feedback Ventures. He said that there was a need to develop a shelf of projects for implementation by the public and private sectors.

The Conclave was also addressed by  Mr. S S Kohli, Chairman and Managing Director, Indian Infrastructure Finance Company Limited,  Mr. Martin Harman, Chairman, Pinsent Masons, UK;  Mr. Arvind Mahajan, Executive Director, KPMG; Ms. Sharmila Chavaly, Executive Director, Ministry of Railways; Ms. Anna Roy, Director, Ministry of Civil Aviation; Ms. Punya Srivastava, Director, Ministry of Ports.   The conclave also hosted three parallel workshops on ports, airports and railways where the opportunities in these sectors were discussed.

Deutsche Bank arm makes $70 mn Indian real estate investment

Mumbai, India, January 22, 2008 - RREEF, the global alternative investment, management business of Deutsche Bank, advised by DeutscheAsset Management (India) Pvt Ltd, has made its first real estate investment in India. RREEF has substantially completed the purchase of an undisclosed stake in Bangalore and Hyderabad-based real estate development company, Golden Gate Properties Ltd, for US$ 70 mn (Rs. 2735 mn).

Golden Gate Properties Ltd is an integrated real estate development company involved in primarily residential apartment projects in India. The company has been operating since 1997 and has to date a portfolio of 10 completed projects – 8 residential apartment developments and 2 commercial projects in established neighbourhoods within Bangalore and Hyderabad.

In addition, Golden Gate is in the process of building 20,000 units across 9 projects, with a built-up area totaling 23 million square feet. It also has plans to build mixed use developments and Special Economic Zones (SEZ) across South India.

“India is presently a particularly attractive emerging real estate market for our high return oriented clients and in time will mature into an important investment destination for RREEF’s broader base of institutional and retail clients. Golden Gate Properties can provide us an important cornerstone to our further investment in India.” said Kurt Roeloffs, Chief Executive Officer Asia Pacific, RREEF.

Mumbai-based Kishore Gotety, who heads Deutsche Asset Management’s real estate and infrastructure advisory services arm in India, highlighted the key elements that made the investment attractive. “Golden Gate Properties is an experienced developer with a strong track record in completing projects. I believe that there is strong and growing demand for quality housing by domestic and foreign workers in the middle-income residential sector and Golden Gate projects are typically located in some of south India’s fastest growing centres for IT activity,” he said.

Bangalore and Hyderabad are India’s fifth and sixth largest cities respectively. Bangalore has a population of over 8.4 million people and is among the fastest-growing cities in the country. The state of Karnataka, of which Bangalore is the capital, was the third largest recipient of foreign direct investment (FDI) in India for the period between January 2000 and December 2005, attracting over US$1.4 billion inforeign investment. Over the past 13 years, nearly 1400 foreign IT-related companies have established offices in the city. As a result, nearly all property types in Bangalore exhibit strong fundamentals. Hyderabad has an urban population of over 3.6 million people, and is the capital of the state of Andhra Pradesh. The city has evolved over recent years from being primarily a research and development hub, into an emerging IT and biotechnology location. Many foreign companies have also set up operations in the region.

K. Pratap, Managing Director from Golden Gate Properties said, “We are particularly excited about our partnership with RREEF, a leading global real estate investor, as this will allow us to further capitalize on the significant growth opportunity and at the same time provide us access to their global real estate franchise, expertise and relationships. Looking forward, Golden Gate will continue to focus on its core business in Hyderabad, Chennai and Bangalore while seeking to grow its presence by selectively undertaking developments in other asset classes in cities which are witnessing a similar demand for IT/ITeS companies. The increasing growth of the service sector is expected to push growth in the residential and commercial real estate markets in key centres across India for years to come,” he said. Golden Gate was advised by Fortune Financial in this transaction.

RREEF Alternative Investments is the global alternative investment management business of Deutsche Bank’s Asset Management division.  RREEF Alternative Investments consists of four businesses: Real Estate, Infrastructure, Private Equity and Hedge Funds.  Headquartered in New York, RREEF Alternative Investments employs more than 1,400 investment professionals in 17 cities around the world to help investors meet a wide range of objectives – from diversification, to preservation of capital, to long-term performance.   Named the world’s largest alternative investments manager in Global Investor/Watson Wyatt’s Alternative Survey, June 2007, RREEF has EUR 68.2/$97.3 billion in assets under management worldwide as of 30 September 2007.

Deutsche Asset Management (India) Pvt Ltd is the advisor to RREEF offshore funds. RREEF is the brand name associated with Deutsche Asset Management India for its real estate and infrastructure investment advisory services division.

Construction starts on Eredene Capital’s low-income mass housing project near Mumbai

Mumbai, India, March 31, 2008 – Eredene Capital PLC (AIM: ERE), the AIM quoted investor in Indian infrastructure and real estate, today announces that construction has begun on its joint venture low-income. housing project near Mumbai following a ground breaking ceremony at the first of its greenfield sites. This is the first phase in the planned construction of approximately 185,000 affordable homes within commuting distance of the city over the next 10 years.

Matheran Realty Pvt. Ltd (“MRPL”), a Mumbai-based real estate development company in which Eredene is investing up to INR 1,312 million (£16.40 million) for a stake of up to 55%, performed the ‘Bhoomi Puja’ ceremony and started construction work on the site at Karjat, southeast of the city, on 26 March.

A total of 10,000 homes will be built on the 100-acre site in an integrated township with units ranging in size between 300 and 500 square feet and selling at INR 999 (£12.50) per square foot. The first units are scheduled to be ready in May 2008, and it is planned to complete 2,300 units by the end of the year.

Over the next 10 years, MRPL plans a phasedland acquisition to build and sell around 185,000 low-cost residential units on a number of sites on or close to the suburban railway network and within commuting distance of the Mumbai Metropolitan Region (“MMR”) to meet the rising demand foraffordable housing for the city’s blue collar workforce. Surveys have identified an acute shortage of affordable housing for the estimated 30% of the MMR’s 18 million people who earn £1,250 per annum or less.

MRPL has awarded Sterling Construction Systems Ltd (“SCS”) the contract to build the units using its fast, low-cost construction method based on prefabricated Hardiflex fibre cement boards which has been successfully applied in housing projects in the Philippines, Australia, Jordan, Vietnam, and in India.

The township at Karjat is being master-planned by SKM Australia and it will have integrated facilities such as schools, hospitals, theatres and retail outlets.

Mr Alastair King, Eredene’s founder and Chief Executive, said: “This is an important landmark for Eredene and for our investment in MRPL. We are pleased that construction is starting on schedule and we look forward to reporting further key developments as the building progresses and we start to market and sell these new homes to Mumbai’s increasingly prosperous blue collar workforce.”

Eredene Capital PLC is a UK-based company which invests in infrastructure projects and real estate development in India. It focuses primarily but not exclusively on logistics, distribution warehouses and port services. The Eredene Group has made five joint venture investments in India to date - four in logistics and infrastructure and one in a residential development. Three of its investments are revenue generating. Current investment commitments total up to £36.5 million which represents 66% of the net funds Eredene raised in April 2006. Eredene trades on the Alternative Investment Market (AIM) of the London Stock Exchange.

Matheran Realty Pvt. Ltd is a Mumbai-based real estate development company whose core focus is building affordable housing in India. MRPL plans the phased acquisition of land to develop some 80 million square feet of affordable housing in and around Mumbai over a 10 year period, with a target of supplying around 20,000 affordable homes per annum with western quality infrastructure and services.

Sterling Construction Systems is a pioneer in rapid, reliable and cost effective housing construction. Using prefabricated James Hardie Hardiflex fibre cement boards, the SCS system has been tried, tested and implemented across three continents in countries such as Australia, Jordan, Oman, Qatar, the Philippines, Vietnam and India. The boards are bonded together to make panels which are delivered to site and are slotted together and, after ducting and wiring, they are grouted with ready-mix cement.

TCS launches development of new 20,000-seat campus in Mumbai

Mumbai, India, April 02, 2008 - 'Tata Consultancy Services, (TCS) (BSE: TCS.BO, NSE: TCS.NS), a leading IT services, business solutions and outsourcing organization, today announced the commencement of construction at its largest development centre, TCS Sahyadri Park located in Hinjewadi, Mumbai,Maharashtra.

TCS Sahyadri Park will be developed over 50 acres of land to create a capacity of 20,000 seats with the first phase expected to be completed by March 2009 with 7,000 seats. The entire facility is scheduled to be completed by end of 2010.

Tata Realty and Infrastructure Ltd. has been mandated to develop the facility, while  Frank Glynn of El Segundo, California, has been appointed as the principal architect for designing the facility along with Edifice Architects from Pune as the local architects. Frank Glynn was also the architect for the TCS facility in Sholinganallur, Chennai.

The Honourable Chief Minister of Maharashtra, Shri Vilasrao Deshmukh was present to perform the commencement ceremonies and lay the Foundation stone of the facility along with Mr. S. Ramadorai, CEO & Managing Director, Tata Consultancy Services.

Commenting on the new facility in Maharashtra, Mr. S. Ramadorai said, "TCS Sahyadri Park will drive the next phase of our growth in this area and help us access the skilled professionals and students from in and around Mumbai. On completion, the facility will provide direct employment to over 20,000 people as well as indirect employment to many more." He added: "This facility in Pune, is of special significance to us as TCS started its first R&D centre, TRDDC, in this city well over two decades ago."

REITs To Grow Globally At US$ 1400 Bln.: ASSOCHAM-CRISIL

Mumbai, India, April 03, 2008 - TheReal Estate Investment Trusts (REITs) would have potential to hold at least 5% share of the total global real estate market by 2010, the size of which would turn to US$ 1400 billion in next 3 years, according to joint Paper prepared by the ASSOCHAM and CRISIL.

The Paper namely Indian REITs ; Are We Prepared, says that by 2010, REITs alone would hold a market size of US$ 70 billion of the total real estate market as its concept is gaining ground in countries like India and other developing nations.  The basis for the projections are based on Gross State Domestic Produce (GSDP) estimates for 2003-04 and an average annualized yield of 10%.

In Indian context, REITs can help provide an exit route for developers to revolve fund more efficiently and will provide opportunities to retail investors to participate in the real estate sector and provide asset diversification to corporate investors, besides building a vibrant secondary real estate market.

Releasing the Paper, the ASSOCHAM President, Mr. Venugopal N. Dhoot said that currently only venture capital funds have been allowed to offer real estate funds.  The venture capital arms of HDFC, Prudential ICICI, Kotak Mahindra, IL&FS, Kshitji Venture and real estate mutual funds (REMFs) are currently available, most of them, only to high net worth individuals and institutional and global investors.  According to SEBI regulations, individual investors in a REMF must invest at least US$ 11,500.  The current players, however, have set the minimum contribution at far higher levels.

The global REIT market comprising 491 REITs in 19 countries of which the US still accounts for over half of the global REIT market (53.2%), although this percentage has been declining as a result of conversion of public REITs to provide REITs in the US and REIT IPOs elsewhere.  The growth of increased profits of REIT markets has led to an increased level of specialized global REIT funds being launched.

Australia is considered to be the largest REIT market after the US; more than 12% of global listed property trusts can be found on the Australian Stock Exchange (ASX).  The country is one of the oldest and least restrictive of the listed property trust (LPT) markets in the world.  Australia’s market is not stringently regulated compared to other global REIT systems, evidenced by there being no listing requirements, gearing or interest coverage limits, limits on developments and restrictions on diversification, ownership or management etc. Australia launched its first LPT in 1971 and in the last 35 years has experienced very successful growth; the quantum of listed and unlisted REITs under management has increased by 29% to reach US$ 285 billion, now approx. 13 million investors in 2007.

Some key drivers in the success of LPTs in Australia are transparency of information – all investors (retail and institutional) have access to a wealth of data to enable informed investment decisions, brokers specializing in LPTs/REITs who have come up due to the success of this asset class and is self-perpetuating the success and securitisation which has allowed retail investors access to such assets which were hitherto out of reach.

In France, the 2003 Finance Bill opened the door for REIT style investments by allowing real estate companies listed on the French stock exchange to convert into `Societies Investissements Immobiliers Cotees (SIIC) and becomes eligible for tax exemption on rental income and capital gains.

REITs wre launched in the UK in 2007 and real estate investments are done through `Pooled Managed Vehicles (PMVs).  While these are different from Open-ended Investment Companies (OICs), they  can be in the form of Trusts.  The regulator for these PMVs is the Financial Services Adminstrator (FSA), as is the case for OICs.  They, however, can have variable capital and are similar to open-ended mutual funds.  PMVs get tax benefits based on the investor profile; at least 75% of the PMV’s total profits must be derived from the property business.

Parsvnath Developers appoints Sunil Malhotra as CFO

New Delhi, India, April 04, 2008 - Parsvnath Developers Limited, India’s leading real estate developer with diversified portfolio, has announced the appointment of Mr. Sunil Malhotra as CFO with effect from March 28, 2008 in place of Mr. Ravi S. Pani, who has since resigned.

Mr. Malhotra besides being a Masters Degree holder in Commerce from Delhi University is also aChartered Accountant, having varied experience of over 30 years. He had earlier worked with Parsvnath Developers as Vice President – Finance for a period of eight years from the year 1997 to 2005.

“We are pleased to once again welcome Mr Sunil Malhotra to the Parsvnath team. With his breadth of experience, we are confident that he will be a valuable contributor to Parsvnath,” said Mr. Pradeep Jain, Chairman of Parsvnath Developers Ltd.

Commenting on joining Parsvnath Developers Limited as CFO, Mr. Sunil Malhotra said, “For me it’s like home coming; I had earlier worked with Parsvnath Developers and in the new role I am sure that with the support of core management team I will be able to perform with full efficiency in achieving the desired organizational objectives”.

Pantaloon Retail Launches Big Bazaar in Ranchi

Ranchi, India, April 05, 2008 - Pantaloon Retail (India) Limited, part of the Future Group, today announced the launch of its flagship hypermarket retail store – Big Bazaar – in Ranchi city. This is the second Big Bazaar in Jharkhand region and the first biggest store with 80,000 sq.ft area in East Zone for the company.

With the launch of Ranchi Big Bazaar, Pantaloon Retail now has a strong chain of 83 Big Bazaar stores across the country. At Ranchi, Big Bazaar located at J C Tower, Kadru More, Main Road, will cater to every single household needs for the citizens of the city and its neighbourhood towns.

Trusted by millions of family across the country, Big Bazaar will bring value to customers shopping, with its unmatched offers, discounts and unbelievable round the year promotions on all categories be it personal care products, garments, footwear, toys, home décor, home utilities, kitchen utilities, packed food, pulses, fruits or vegetables, groceries and many more.

Says Mr. Sandeep Marwaha, Head, East Zone, Pantaloon Retail (I) Ltd., "Big Bazaar will bring convenience plus rich shopping experience to the people of Ranchi. We are a consumer-driven company and we ensure that all our Big Bazaar stores fulfill the needs of the entire household under one roof.

“Big Bazaar maintains stringent procurement norms and quality control measures to ensure quality products sold at every Big Bazaar stores. We are confident of our offerings both in quality and competitive pricing, which has earned us the trust of millions of family across the country, added Mr. Marwaha.”

Ranchi Big Bazaar will have following categories/section devoted to specific products:
Food Bazaar: All food items, pulses, grains, fruits, vegetables
M-Bazaar: A mobile shop offering latest and affordable handsets.
Depot : Book shop offering novels, cassettes & CDs, stationeries, books.
Apparel : For Ladies, Men’s, Kids for all season. Western, ethnic, casuals & formals
Appliances: All kitchen appliances like Mixer Grander, Toaster, Microwave, Juicer.
GM-Home: Entire range of kitchen need, Utensils, Plastic-wear, Home-linen
GM-Fashion: Accessories, Luggage, Gift items and many more…
Furniture Bazaar: Offers an entire range of Home Furniture at affordable pricing.
Electronic Bazaar : Offers the best deals in branded electronic goods & appliances.
Live Kitchen: Offers fresh baked products like bread, cakes, and pastries.

About Pantaloon Retail (India) Limited
Pantaloon Retail (India) Limited is a leading retailer with a turnover of over Rs. 3550 crore for the financial year 2006-07. Headquartered in Mumbai, the company operates through primarily the ‘Lifestyle’ and ‘Value’ formats through multiple delivery mechanisms and lines of business — some of them being, fashion, food, general merchandise, home, leisure and entertainment, financial services, communications and wellness. The company has stores in 54 cities across the country, constituting over 7 million square feet of retail space. The company caters to the ‘Lifestyle’ segment through its 39 Pantaloons Stores and 5 Central Malls, as well as its other concepts. In ‘Value’ retailing it is present through 83 Big Bazaar hypermarkets, 130 Food Bazaars and other delivery formats.

Builders protest against steep hike in steel prices

Mumbai, India, April 03, 2008 - 'The Builders’ Association of India (BAI), an All India Association of Engineering Construction Contractors, today strongly protested against the  unprecedented rise of over 32 per cent in price of steel  in the last three months and expressed doubts about completion of time-bound projects connected with Commonwealth Games-2010 and other projects.

BAI also warned if early action is not taken, Contractors will be forced to close down their works as they are getting ruined in both the eventualities. The apex bodies of the construction industry have joined hands to voice their concerns from a common platform against the continuous hike in steel and other steel items mainly used in the construction and infrastructure projects.

The construction industry fears that if corrective steps are not taken immediately by the works authorities, such as NHAI, DDA, PWD’s, Railways and CPWD, then the virus of non-tendering may spread across the country.

The construction industry demands permission of duty free imports of steel like cement, ban on export of steel, reimbursement of the increased steel price based on SAIL rates published from time to time for ongoing and upcoming projects, request to Director General of Intelligence and Research to enquire into the causes of unprecedented steel price increase from 2004 till March 2008 and more specifically after the Union Budget 2008 and stability in steel prices.

The BAI demanded the Government to probe into the steep hike in the cost of steel and its scarcity hampering the construction activity as the industry is finding it difficult to absorb this unabated increase. The price has moved from Rs 34,000 per metric tonne (MT) in December 2007 to Rs 45,000 per MT in March 2008, an increase of more than 32 per cent. Meanwhile, the steel rates have gone up by about 80 per cent as compared to the rates prevalent in 2005.

In a meeting convened by BAI and attended by representatives of Confederation of Real Estate Developers Association (CREDAI), Construction Federation of India (CFI), Construction Industry Development Council (CIDC), MES Builders’ Association of India (MESBAI), National Highway Builders Federation (NHBF) and National Real Estate Development Council (NAREDCO), it was pointed out that the steel companies are arbitrarily jacking up the prices.

At the press meet, BAI Spokesman said that ‘’the Steel Secretary has already confirmed 25 per cent increase in steel prices during the last three months.’’

He also mentioned that the contractors executing important and major projects for the Central Public Works Department (CPWD) and for the Commonwealth Games 2010 and other projects will be forced to close the works.

The apex body complains that main producers SAIL, TATA and RINL and other secondary producers are continuously increasing the rates without any reasons and justification. The Ministry of Steel and the Government is not heeding to the sufferings of the steel consumers. ‘’The contractor agencies who have committed their rates through respective agreements and time bound projects, are ruined and are not in a position to face and absorb this sharp increase’’, the spokesman added.

Despite all these hikes the steel is in short supply and all the works of National importance are suffering badly. The construction cost has gone up more than 15 per cent in the recent past and thus building a shelter by ‘’AAM ADMI’’ has become a matter of dream, he said.

The spokesman also mentioned that the concerned Ministry is neither putting pressure on the manufacturers to arrest the prices and to increase the production of steel in the country to meet the demand nor it is changing the policy of Import/Export as per demands of the present situation. ‘’It seems there is a sort of cartelization by the steel manufacturers which is a major cause of unprecedented increase in the steel prices,’’ he said.

Keeping in view the gravity of the situation, the industry urged the Government to take up the matter on war footing to avoid delay in completion of the projects and foreclosure of works by contractors and litigation etc.

Indiabulls Power Generation awarded LoI for Chhatisgarh power project

Mumbai, India, April 04, 2008 - Indiabulls Real Estate Ltd has announced that IndiabullsPower Generation Ltd (IPGL) has been awarded the Letter of Intent for Bhaiyathan Thermal Power Project (Bhaiyathan TPP) in Chhattisgarh state by Chhattisgarh State Electricity Board (CSEB).

IPGL is a subsidiary of Indiabulls Power Services Ltd (IPSL), a subsidiary of Indiabulls Real Estate Ltd (the Company).

Chhattisgarh State Electricity Board (CSEB) had invited bids for procurement of power produced on Long Term basis from Project comprising building, owning, operating, maintaining of a coal fired thermal power project at Bhaiyathan in Chhattisgarh. The project includes development of captive coal mines containing proven reserves of 349 million tonnes in District Korba of Chhattisgarh to provide low cost coal supply to the power project. 35% of power produced from the Bhaiyathan project is available for merchant sale at market rates and the remaining 65% has to be sold to CSEB at the quoted levelised tariff. CSEB shall be soon handing over the land, water and environmental clearances for the project.

BuildArch 2008 and Build Up 2008 Announced in Mumbai

Bangalore, India, April 04, 2008 - Bangalore International Exhibition Centre (BIEC), The Confederation of Indian Industry (CII) and Deutsche Messe, Hannover, Germany (DMAG) have announced the institution of BuildArch 2008 and Build Up 2008, India's Comprehensive International Exhibition and Conference scheduled to be held in October at the Bangalore International Exhibition Center (BIEC), Bangalore. The event to be held from 21st - 24th October 2008 has been envisaged as India's most Comprehensive International Exhibition and Conference on Architecture, Building and Construction, Property Investments and Development Opportunities on a global scale. This is the first time that these three organisations have joined hands to conduct an exhibition.

BuildArch 2008 & Build Up 2008, the two concurrent events have been conceived by BIEC, CII and DMAG and will be held every alternate year. These mega events will invite global participation and will provide a unique platform for the Industry forum to discuss all the policy issues under one roof through high-level conferences such as International Conference on Building of the Future: Architecture & Construction, Green Building and National Conclave on Real Estate.

Speaking at the Launch here today, Mr. J P Nayak, Chairman- BuildArch 2008 and President (Operations) - Larsen & Toubro Ltd said BuildArch 2008 is initiated to showcase cutting edge,technologies in Architecture, Building and Construction sector and is an effort to bring under one roof comprehensively the options available on Technology, Materials, Interiors and Systems. The event is designed to offer complete solutions in buildings and building construction also highlighting critical policy issues that needs to be addressed to realize the immense growth potential in this sector.?

"We are looking forward to create this unique international networking platform to enhance business opportunities along with being instrumental in bridging the knowledge gaps and bringing together the industriesand the users for technologydevelopment, transfer and subsequent commercialization" added Mr. Nayak.

The real estate sector is estimated to touch US$ 50 billion by 2009-10 along with the estimated planned investment of US$ 475 billion over 2007-12 and an expected growth of 7-8% of GDP in India?s infrastructure sector has created a huge business potential in this sector making it an attractive investment destination for the foreign investors. BuildArch 2008 & Build Up 2008, aims to bring together, under one roof, all the potential developers/ builders and property purchasers offering one-stop-shop solution towards different facets of real estate and construction sector.

Mr Nayak said "these two premier events will go a long way to boost the real estate sector as well as the architecture, building and construction community in India. Complete building construction solutions will be showcased and critical policy issues that need to be addressed will be highlighted. Besides, BIEC is an ideal venue for holding national and international exhibitions, conferences and seminars. It is one of India's most modern facilities for hosting exhibitions, conferences and seminars with state-of-the-art technology and a unique architectural style."

Mr. Anuj Puri, Chairman & Country Head, Jones Lang LaSalle Meghraj, said that the main objective of Build Up 2008 is to help industry understand new developments in construction management, architectural and design process and to bring closer the communities of builders and property purchasers.

Mr. Puri said that Build Up 2008 Exhibition, emerging as an apex international event on real estate, would showcase the investment opportunities for national and international investors in India. The Exhibition will have the participation of propertydevelopers, urban planners, major contractors, financial institutions, designers, consultants, financial institutions, property development consultants, engineering consultants,project management companies and government authorities, covering a display area of more than 10,000 sq.mts.

Build Up 2008 would feature a forum of CEOs on real estate sector and will feature high level conferences, including a National Conclave on Real Estate to discuss policy issues under one roof said Mr Puri.

Speaking on the Indian real estate sector, Mr. Puri said that it is the second largest employment generator in the country, is growing in leaps and bounds with the explosion in demand for construction systems.

Mr Puri further said that the booming real estate market in India continues to lure foreign investors. India has already displaced the US as the second most favored destination for FDI to invest in properties around world.

Mr Chandrajit Banerjee, Chief Operating Officer, BIEC, said that BIEC with its state of the art hosting facilities has been promoting conventions and exhibitions that help the various Indian industries to showcase their offerings to the world and attract global attention to the Indian market. With MICE tourism (Meetings, Incentives, Conventions and Exhibitions) being the new buzzword in the international tourist market, after hot spots like Hong Kong, Malaysia and Dubai, India is fast gaining its foothold in the competition to become an ideal MICE destination. The inbound MICE segment in India is estimated at growing 15 to 20% annually. It is estimated that the total national and international MICE meetings market all over the world is in excess of $300 billion. BIEC?s efforts in promoting the Convention and Exhibition industry can actually drive the growth of other industries.