While everybody is speaking about how good an opportunity it is to put in your money in real estate now, investors who intending to sell could do well waiting for about six more months to get some added advantage, say experts. “It depends on at what level they had entered. In another three to six months the market will be stable and input costs are anticipated to rise after that. Since there are no major projects that have been announced, there will be strain on supply. People should wait for at least six months before starting to sell,” said Pradeep Sureka, managing director of Bengal Park Chambers Housing Development Ltd. He added that ideally a twoyear wait would bring in maximum returns.

Debjani Mukherjee Sarkar, general manager — marketing of Bengal NRI and Varun Kathotia, director — marketing of Fort Group agreed. “In the past two months, the trend has shown that the market is picking up. The Bengal NRI, however, believes that people should wait for around six months to get an appreciation of about 10 to 15 per cent,” she said. “Land prices have not changed much and unless one can strike a very good deal, it is better to wait another four months before one sells a property,” Kathotia said. Some said in a couple of years, there would be major rise in property prices. “Those who had invested between 2005 and 2007, early 2008 had been the best time to sell off. At the moment, the market is slightly down and it is the right time to buy rather than sell. By 2011, there will be another 20 to 30 per cent jump in the market and that will be the ideal time to sell,” said Mayank Saksena, associate director of Joneslang Lasalle Meghraj.

“Two years from now, there will be a more than 30 per cent rise in prices,” said Sumeet Dabriwala, managing director of United Credit Belani Group. He added that people should wait for six months to one year because the condition at present was just the beginning of an uptrend. Many divided investors into different categories. “Selling will depend on when the person had taken possession of the property. If he is an old investor, this time is good enough to fetch him a profit and if he has been a recent investor, it will be better for him to wait for some time as the market has stabled and from here, it will only improve. In another year, the market will improve at least 10 per cent,” said Rahul Todi, managing director of Shrachi.

Rajesh Somani of Somani Realtors classified investors according to the amount of money they had spent. “People who had put in their money in properties of over Rs 40 lakh can sell them off as market growth in that segment is very slow but for investors under Rs 30 lakh, it will be advisable to wait for another six months, because the market is showing a positive trend,” he said. “The market has stabilised. People who had bought a correctly priced property will get better returns than bank interest, but those who purchased at exorbitant prices, expecting to make a fortune, will suffer a loss. Sellers who can afford to wait for another six months will get better return. The slowdown has put a check on speculative buying,” said Biswadeep Gupta, general manager of Eden City Group.

Sushil Mohta, managing director of Merlin Group, said two factors crucial to selling were whether the deal was mutually beneficial to both the seller and the buyer and whether it satisfied the consumer’s requirements. As long as these conditions were fulfilled, selling could take place. “Now, when the market sentiment has changed and developers have become more approachable, consumers are finding it easier to visit them and discuss in details their buying or selling decisions. Moreover, in such conditions, developers extend extra cooperation and added incentives to consumers, making deals more lucrative,” he said.

A few experts do not anticipate much of a rise in the near future. “Going by my interest, they should be buying, but realistically speaking, all buying and selling should be held for another three months,” said Kumar Shankar Bagchi, managing director of Bengal Peerless. Asked whether there will be a similar boom in two years, he said, “There will be, but prices will not soar to the level at which they were in the near past, before the financial crash. What happened was a catastrophe, caused by individuals who kept investing endlessly. They have learnt a lesson and I am sure that kind of situation will not rise again in my lifetime.” Harshvardhan Neotia, chairman and managing director of Ambuja Realty said he didn’t see any significant appreciation in the short run. “If one needs the money, one will have to sell anyway, but if one has the retaining capacity, one should wait for another couple of years before any considerable rise in property price,” he said.

“I believe that the decision should be based on the necessity to raise capital. I do not see any sharp increase in the value of real estate in the immediate future. Then again prices of real estate are dependent on location of the property and it is difficult to make a general statement,” said Santosh Rungta, president of the Confederation of Real Estate Developers’ Associations of India (CREDAI).

FDI in retail must be allowed, insists Anshuman Magazine, CMD of CB Richard Ellis South Asia Pvt Ltd. “India’s retail trade is around $ 180 billion, which is almost 10 per cent of the GDP, employing more then 21 million persons. Policies should be more transparent and smooth, in order to attract foreign investors,” he justifies. “Like any other person who invests money, we need to understand that foreign investors will also expect returns. Perhaps the challenge lies in reassuring these investors,” he wonders aloud.

According to Dubai-based real estate consultant, Rajesh Bijlani, the news of retail chain IKEA putting its India entry plans on hold, indicates the prevalent scenario. “There is something in India’s policies and implementation that is keeping such major brands from entering right now, despite the fact that the economic indices are attractive to MNC brands,” he feels. “Many retail brands that have outlets in the UAE have shown interest in setting up operations in India, but little is actually working out in the near future, as compared to the potential. I guess we need to work out red-tapism and other issues that seem to be delaying the entry of these retail players at present,” he adds.

FDI is not allowed in multi-brand retail, only in single-branded stores, points out Bappaditya Basu, vice-president (retail), Jones Lang LaSalle Meghraj. “Foreign, single brand stores can open with an Indian partner and hold a maximum of 51 per cent stake, according to FDI norms. In the past, this was not allowed, which meant that only the franchisee route was available and it did not suit many of these brands,” he explains. Among the global retailers seeking to enter the Indian retail arena are Hamleys, Diesel, et al, reveals Basu. “Leading international brands like Burberry, Smallsmith, Kenzo, Bottega Veneta, Canali and Just Cavali were already present on a limited scale and have now changed partners, to open up more stores in India. There are also some international coffee chains eyeing India and scouting for partners,” he adds.

Ashok Kumar, principal and managing director, CresaPartners India mentions how the Emke Group, which operates the biggest hypermarket chain in the Middle East under the LuLu and Al Falah brands, is entering the Indian market by developing the biggest shopping mall in Kochi, in Kerala. “Crocs India Retail Ltd, the lifestyle footwear brand, will launch eight to 10 more EBOs in India. Similarly, Manchester United Food & Beverage Asia, with a mandate to set up casual dining outlets tapping into the popularity of the multi-billion dollar club, has done a recce of select Indian cities in recent months and followed it up by talking to potential investors. Leonidas, a Belgian chocolate producer and seller, has entered the Indian market by establishing its retail operations in India. It claims to be the only chocolate brand having its own exclusive store,” he adds. Similarly, New Delhi-based Grand Slam, one of the market leaders in high end fitness equipment, is planning to set up 30 more franchisee stores in tier-II and tier-III cities, by January 2010, adds Kumar. “Obviously, things are looking up and the Indian scenario seems receptive to FDI in retail,” he adds.

Rajnikant Ajmera, former president of CREDAI explains that the retail segment in India faces a simple challenge: global trends do not fit-in entirely, given that the end customer has a different buying pattern and motivators to loyalty, with regards to a brand or a location. “If you look at Mumbai’s retail story, initial projects faced all sorts of challenges. Some quietly shut down, were taken over or re-did their business plans. Issues pertaining to footfalls, the right size and mix of anchor tenants are still being learnt,” says Ajmera. However, global brands will definitely want to enter the vast Indian market, he adds. Kumar points out that the government has proposed setting up a retail regulatory authority, which will have jurisdiction over the organised retail sector, including single-brand stores and the wholesale cash-and-carry trade.

Amidst talk of a recovery from the global economic recession and the impact on real estate in India, Atul Modak, head of Kohinoor City Project says, “Global financial hiccups are a fact of life. They impact sentiment but will not stop economic growth in India. There is a demand-supply gap when it comes to quality commercial space. Prominent locations have and will always see terrific growth in residential space and this, in turn, will trigger the retail and commercial realty boom in any area,” he says.

There are strong new reports that the global real estate market is hitting the bottom and some impressive positive news is coming from real estate markets around the world. In the U.S., the real estate market has yet to hit the bottom, but at least it is very close. There are 2 factors that would determine recovering the real estate market. One is when job losses stop and new jobs are created and secondly when the real estate prices are realistic reflections of what people can afford to buy. The news that the real estate market is recovering based on recent sales doesn’t really reflect real recovery. What is happening is that people are buying houses at bargain prices. The value of sales is up and this is a good sign but still the real estate market would probably start recovering by next spring.

Around the world there is positive news in India where there is a huge demand of the population for real estate that is the main factor for the real estate boom–and also in the Middle East where the population growth in 10-15 years is estimated to triple. The European real estate market mirrors what is happening in the U.S. There are some signs of improvement in Africa and Latin America but not as strong as in Canada, India and China. The Canadian Real Estate Association reported that realtors sold 50,270 units sold via the multiple listing service last month. That’s an 18.2 per cent jump from a year ago. It also marked the first time sales had topped 50,000 in July. Sales of existing single-family homes jumped 55 percent in the 2009 second quarter compared to the 2009 first quarter. Realtors sold 18,141 homes in the second quarter.

In China the strength of the property sector has been another big surprise. Property sales were up 53% in the first six months from a year earlier, according to a survey commissioned by the statistics bureau and published in the China Information News, while nationwide prices averaged across 70 cities climbed year on year in June. This masks the fact that in second and third cities prices have been strengthening much more. Property normally accounts for about 25% of fixed asset investment in China and is a key form of wealth holding for most Chinese. Optimism about housing prices will translate into greater consumer confidence.

Following a slew of new launches in the affordable housing segment in the past few months, real estate developers in the country are once again showing interest in land acquisition. They are now also expecting “some price escalations” for residential properties, with easier liquidity and overall positive market environment in the second half of the year. “We believe developers’ appetite for land has increased, given easier financing conditions and availability of prime land parcels (which many developers do not have) at reasonable rates. Increase in both off-takes and unit prices has improved developers’ confidence to purchase new land, in our view,” J P Morgan analyst Saurabh Kumar said in a note to clients.

In recent deals, Indiabulls Real Estate won the four-acre Mantralaya modernisation project in Mumbai with a bid of Rs 1,376 crore. DLF Ltd, the country’s largest realtor, won a 350-acre plot in Gurgaon for about Rs 1,750 crore after two other bidders — Unitech and Bharti — were disqualified on technical grounds. DLF, however, still wants the government to ease policies to ramp up deals. “The overall demand is certainly firming up. All the developers have reduced property prices in the past so I don’t think any price hike can be expected in the near future,” DLF’s group executive director Rajeev Talwar told DNA. However, if demand continues to build up and supply gets restrained, the situation may lead to prices moving northwards. I think the government should ease the policies on giving clearances faster as that creates unnecessary delay in executing the projects,” he said.

Realty analysts and consultants are skeptical about the plan due to developers’ high debt. “That (price revival) is something skeptical to talk about right now. Most developers have raised money through capital markets by either a qualified institutional placement of shares or they are lining up an initial public offering. Companies which are heavy with debt or those who have reduced debt by raising capital should not look at purchasing land outright. However, if they have a fair debt position they can look at it,” Ambar Maheshwari, director-investment advisory at DTZ, told DNA. Omaxe chairman and managing director Rohtas Goel is optimistic of a price hike early next calender. “We have seen projects being launched at rock bottom prices off-late. The same projects are selling at a premium in the re-sale market, so you can expect developers to launch new projects at a higher price, we would also be looking at acquiring some key land plots,” he said.

Nitin Idnani, research analyst with Enam Securities, said, “Developers are still ready to buy land which can be monetised and [as for] those parcels located in tier 2 and tier 3 cities, developers still want to sell them off as it would be difficult to get returns on that land bank.” New Delhi-based developer Anant Raj Industries is also looking to buy distressed land from developers reeling under high debt and has started acquiring land in Maneswar and Bhagwandas. The company has allocated Rs 450 crore for land, on which it plans to build affordable homes. “We are negotiating for many land parcels, which we can get at discounted rates in the current market,” Amit Sarin, director, Anant Raj said.

Ponta dos Ganchos, A Romantic hideaway on the south coast of Brazil is an exclusive luxury beach resort that offers relaxation, tranquility and recently it has been named on a list of the world’s sexiest beaches by America’s Conde Nast Traveller magazine.

Located on a private peninsula near Florianopolis in the southern Santa Catarina state, Ponta dos Ganchos is one of the country’s most exclusive beach resorts. Ponta Dos Ganchos can be reached via a fifty-five minute flight from Sao Paolo, an hour and thirty minute flight from Rio de Janeiro or a two hour flight from Buenos Aires. In order to maintain an atmosphere of complete tranquility, minimum age requirement at Ponta dos Ganchos is 18 years old. Ponta dos Ganchos is a haven for beach lovers who appreciate laid-back elegance, romance and seclusion.

Visitors who stay in any of the accommodations in the resort have access to a host of activities which suit every level of interest including fitness centers, tennis courts, dry saunas, Jacuzzis with sea views; personal spa areas with massage tatamis, wine cellars heated indoor pool, billiards and hiking trails. Water enthusiasts can sail around or Kayak the peninsula or take advantage of an off property excursion such as diving or deep-sea fishing.

According to Easier.com, Nicolas Peluffo, general director of Ponta Dos Ganchos said that Ponta Dos Ganchos is going through an amazing year. He added that he is “delighted” at the success as the resort won at the Conde Nast Johansens Awards for Excellence in January 2009.

In related news, Luxury Travel Adviser magazine June issue reported that Ponta dos Ganchos resort gives visitors “one more reason to visit Brazil’s southern coast”.

Mumbai continues to be the second costliest city in Asia Pacific in terms of prime rental rates. With rent of about USD 800 per sq metre per annum, Mumbai is ahead of the likes of Tokyo (USD 750 per sq metre p.a.) and Singapore (USD 625 per sq metre p.a.) as per the latest report of real estate consultancy firm Jones Lang LaSalle. This is despite a 40% drop in rentals from its peak values. Delhi comes fourth in the ranking with USD 725 per sq metre per annum. With GDP growth expected to bounce back in 2010, India and China would outperform the global markets with a 7-10% growth rate. The early signs of recovery are visible in Delhi and Mumbai markets. Having dropped by 24% in March’09 quarter over the preceding quarter, Mumbai’s decline in June’09 was well below 10%. Delhi followed with an 8% decline, which was half of what it was in the quarter before.

The average decline for India in June’09 was 8.3% as against 19% in the quarter prior to that. This showed that the rate of decline in rentals has also slowed down in the June’09 quarter as compared to March’09 quarter. It is believed that rents in these cities have bottomed out. Pune outperformed with just about a 4% decline. This trend is likely to improve by 2011 when the absorption rate would overcome the supply. With 57 million sq feet of office space expected to be operational by the end of 2009, vacancy rate would continue to be high at 27% in 2010 till it comes down to a little above 20% in 2011.

Talking city wise position, Bangalore is expected to relatively outperform other cities with a low vacancy rate as it has received good response for pre leasing properties. Companies form telecom and pharma sector seem to be fast taking advantage of the low rentals and expanding their geographic reach. For example recently Aircel and Telenor Unitech wireless signed more than 50000 sq feet of real estate space. As rents become more affordable, we could see more companies scaling up their expansion plans.

According to the world travel and tourism council, the growth in the hospitality industry is pegged at 15% every year, and with 2,00,000 rooms (both luxury and budget) needed in the country, the segment is poised for a stupendous growth. While the high influx of foreign tourists has ensured huge footfalls for the sector over the years, internal tourism too has, off late, begun offering great potential. With travelers taking new interests in the country, players in the hospitality sector have had to offer the best of services, at affordable prices. Also, with the USD 23 billion software services sector pushing the Indian economy skywards, more and more IT professionals are flocking to Indian metro cities, thus signaling a boomtime for the hotel and hospitality segment. Several other factors such as Commonwealth Games in Delhi are fueling the need further.

The Indian hospitality industry is projected to grow at a rate of 8.8% between 2007-16, placing India as the second-fastest growing tourism market in the world. Initiatives like massive investment in hotel infrastructure and open sky policies made by the government are all aimed at propelling growth in the hospitality sector. “Hotel and hospitality industries are among the biggest employment generators in the country. Towards propelling its growth, while the government should confer infrastructure status to the hotel industries, several taxation issues also need to be rationalised. Further permits and licenses required for the hotel operations need to be rationalised by offering a “single window” mechanism,” says Sanjay Gupta, CMD, Neesa Leisure Ltd - the Group which boasts of providing state-of-the-art facilities and services at its hotels.

Be it Cambay Sapphire - the elegant 3 star business hotel at Ahmedabad or The Cambay Grand - the upcoming 5 star hotel in Ahmedabad that takes contemporary luxury to new heights with opulent rooms and suites, exotic spa, virtual golf, and multi cuisine fine dinning, redefining luxury is the perennial mantra in each of Cambay’s hospitality projects. Some of the Group’s forthcoming ventures include The Cambay Spa & Resort at Neemrana, Rajasthan - a proposed five star business hotel boasting of one of the largest conference and convention facilities, another venture of Neesa Leisure Ltd in Dahej (SEZ) to have 100 rooms including apartment and conference facilities and Cambay Sapphire, Jodhpur - a business hotel. Exclusive and innovative initiatives like the Cambay projects certainly focus on ensuring a bright future for the Indian hotel industry.

The government’s decision to substantially upgrade 28 regional airports in smaller towns and privatization & expansion of Delhi and Mumbai airport has improved the business prospects of hotel industry in India. Also, the upgrading of national highways connecting various parts of India has opened new avenues for the development of budget hotels in India. Couple this with the availability of qualified human resources and the hospitality sector has already got great growth prospects! A focus on quality, behaviour-based evaluation, market choice and market response has predominantly shaped the State’s hospitality industry. Increased competition and increase in demand has consolidated the hospitality segment, whilst opening up a plethora of opportunities. Fierce competition has led to innovative ideas by hotel majors, thereby delivering impressive hospitality products and services. This has, in turn, also prompted them to generate new lines of revenue with creative approaches, be it by reducing transaction costs, increasing productivity or promoting traditional Indian values.

A pioneering initiative, herein, is the concept of mixed-use developments, wherein the real estate typically includes an apartment block of a commercial block along with a hotel. Still in its nascent stages in India, the concept offers inspiring potential. Also, the entry of multinationals and Indian hotel chains expanding internationally only reinforces the segment’s untapped business potential. Combining unparalleled growth prospects and unlimited business potential, this industry is certainly on the foyer towards being a key player in the nation’s changing face.

The Singapore-listed Indiabulls Properties Investment Trust, which is part of realty major Indiabulls Real Estate, is planning to raise up to 200 million Singapore dollars (about Rs 676 crore) through a rights issue. The proceeds would be used to pay debts of the company. Indiabulls Properties Investment Trust (IPIT) in a filing to the Singapore Stock Exchange has said it is looking at a rights issue for the purpose of “raising up to 200 million Singapore dollars of gross proceeds, for the primary purpose of repaying and/or pre-paying part of the borrowings”. Indiabulls Property Management Trustee Pte, the trustee-manager of IPIT, has submitted an additional listing application for the planned rights issue to the Singapore Exchange Securities Trading Ltd.

“Under the rights issue, new units will be offered to all existing unit holders (including Indiabulls Real Estate Limited, which is the sponsor of IPIT) on a renounceable and underwritten basis,” the firm said. According to Monday’s filing, the trustee-manager has not taken any firm decision in relation to the rights issue including the price. “The trustee-manager will make these decisions at a later stage depending on the financial requirements of IPIT and the prevalent market conditions at the material time… There is no assurance that the rights issue will proceed,” it noted. The filing noted that the trustee-manager is always in the process of evaluating various funding sources for IPIT.The Singapore-listed Indiabulls Properties Investment Trust, which is part of realty major Indiabulls Real Estate, is planning to raise up to 200 million Singapore dollars (about Rs 676 crore) through a rights issue.

Indiabulls Properties Investment Trust (IPIT) in a filing to the Singapore Stock Exchange has said it is looking at a rights issue for the purpose of “raising up to 200 million Singapore dollars of gross proceeds, for the primary purpose of repaying and/or pre-paying part of the borrowings”. Indiabulls Property Management Trustee Pte, the trustee-manager of IPIT, has submitted an additional listing application for the planned rights issue to the Singapore Exchange Securities Trading Ltd. “Under the rights issue, new units will be offered to all existing unit holders (including Indiabulls Real Estate Limited, which is the sponsor of IPIT) on a renounceable and underwritten basis,” the firm said.

According to Monday’s filing, the trustee-manager has not taken any firm decision in relation to the rights issue including the price. “The trustee-manager will make these decisions at a later stage depending on the financial requirements of IPIT and the prevalent market conditions at the material time… There is no assurance that the rights issue will proceed,” it noted. The filing noted that the trustee-manager is always in the process of evaluating various funding sources for IPIT.

According to a report by Knight Frank, Pune will see 4,500 to 5,000 more hotel rooms across categories by 2010-11. Mr Atul Goel, Managing Director, Goel Ganga Group, says the boom in the hospitality segment is not ‘sudden.’ “And it has nothing much to do with the Commonwealth games planned in Pune. Developers had recognised the need and some had the floor plan ready or in the pipeline. Yes, with the advent of the Games, the acceleration took place in certain areas. The growth of the academic segment and IT/ITES certainly helped, coupled with high disposable incomes. “The manufacturing and automobile units in Pimpri-Chinchwad as well as Chakan and Ranjangaon Industrial areas contribute to an average of 55 per cent of the total room demand while the IT sector in the city contributes 45 per cent. The airline transit crew generates around 2-3 per cent of room nights annually in few four-star hotels.

Some of the new projects coming up in the Pune hotel industry include the Hyatt, JW Marriott, Leela, InterContinental, Starwood, Holiday Inn, Crowne Plaze, Westin and other international and national hotel chains. The special purpose vehicle floated for the Rs 360 crore-International Convention Centre (ICC) promoted by the Mahratta Chamber of Commerce, Industry and Agriculture will emerge as South Asia’s largest International Trade and Convention Centre with a 380-room hotel and 2,800 seat convention centre. Leela Group of Hotels is coming up with over 200 rooms of 5-star category, a business-cum-resort hotel near the Pune Golf Course; Radisson with 100-rooms promoted by the Runwal Group is under construction. Taj is venturing into Hinjewadi along with Padma Vihas Palace at Wanowrie with a 45-room boutique hotel and Ginger has its budget hotel in the Chinchwad area with 101 rooms. Accor, the Australian chain, is planning to come in with its signature brand Ibis under the budget hotel category.

Hotel-cum-tourism PSU, Indian Tourism Development Corporation (ITDC) plans to make private hotel companies and real estate players its franchisee partners. It launched the Ashok Alliance Scheme on Thursday, under which member hotels will be able to use the Ashok brand and benefit from the operational management expertise, marketing inputs and other resources of the ITDC Group. ITDC, in turn, would get 3% of the gross room revenues earned by these hotels.

The company has roped in two developers in Surat and Chandigarh, who will get to use the Ashok brand for properties developed by them. This will take the total number of hotels under the Ashok brand to 18. “We are in talks with a number of other real estate players and hoteliers to bring more hotels under the Ashok Alliance scheme,” ITDC vice-president Kuldip Verma said.

He said ITDC would add 5-6 more hotels at various locations through this alliance — three in West Bengal and one each in Manesar, Coorg and Malaut, Punjab. In the long run, it wants to increase the hotel count to 33 hotels.

In the past three years, ITDC has invested Rs 146 crore in refurbishing Ashok Hotel, Samrat Hotel and Janpath Hotel for the Commonwealth Games in New Delhi. The Organising Committee Commonwealth Games (OCCG) 2010 has declared these three hotels as ‘Games Family Hotels’ which have a total room inventory of 680 rooms. It is revamping its hotels at other destinations too.

ITDC had 34 hotels, of which 18 hotels were sold to private partners under the government’s disinvestment programme. The PSU is now left with 16 hotels, which it now plans to expand through the scheme.