A new four-storey commercial building at Worli is being sold for Rs 640 crore, pitching it as one of the costliest in the country. The Nusli Wadia-led Wadia Group has finalised the mega deal with Axis Bank, which is planning to shift its headquarters to the building.

The deal generated a lot of interest in Mumbai’s property market and some sources in real estate circles had pegged the price at Rs 900 crore. But this was discounted by a senior representative of a leading financial institution who was said to be aware of the nitty-gritties of the transaction. The Wadias were unavailable for comment. A spokesperson for Axis Bank said: “At this point of time we do not have any comments to offer.” The building, Wadia Tower A, located in the Bombay Dyeing Mill compound on Pandurang Budhakar Road, has a saleable area of over 4 lakh square feet. It works out to Rs 16,000 a square foot.

The representative of a global property consultancy firm said: “A deal of this magnitude for a ready building is unheard of. This is by far the largest of its kind.” Axis Bank, one of the three largest lenders in the country, plans to move out of its existing offices in Maker Towers in Cuffe Parade and set up its headquarters in Wadia Tower A. Several financial sector companies have already relocated to new business centres like the Bandra-Kurla Complex and Kalina. The Wadias, considered to be one of Mumbai’s biggest land owners, control 64 acres in prime central Mumbai where they are also developing 1 million square feet of residential space.

For non-resident Indians, in particular, the online facility to trade in the Indian markets is a boon. With the markets currently on the lower side and more volatile than a few weeks back, there is the opportunity for the discreet NRI investor to pick on choice stocks to add to his portfolio. To assist him in doing this more easily and with greater control, we have an increasing number of brokerage houses adding new online trading facilities. In the past weeks, ICICIdirect and Geojit BNP Paribas, two leading retail stock brokers with a sizeable presence in the Gulf, have joined the fray. ICICIdirect launched its new online trading platform ‘TradeRacer followed by Geojit BNP Paribas which launched its enhanced online trading platform ‘FLIP’ (Financial Investment Platform).

The platform is available free of cost for its existing customers while brokerage charges remain the same at 0.3 percent for a delivery. FLIP is already available in stock exchanges of Saudi Arabia and Oman. Developed by Geojit Technologies (P) Ltd, a subsidiary of Geojit BNP Paribas, ‘FLIP’ provides features similar to ICICIdirect’s TradeRacer like alerts, research reports, intra-day charts, technical analysis, third party news, customised interface and a mobile edition called FLIP-Me. Both mobile integration options are available through low bandwidth GPRS-enabled mobile phones.

Where FLIP scores is in its tie-up with eight banks, whose customers can access the platform. ICICIdirect does not allow any customer other than its own account-holders (in ICICI Bank) to trade in its online trading platform. In both the platforms, investors can arbitrage which provide multiple watch-lists. ICICIdirect’s ‘TradeRacer’ was initially available only to its sub-brokers. Now it is open to all customers after registration. FLIP integrates with the risk management system offering financial instruments such as equities, derivatives (stock and currency), margin funding, mutual fund units and IPOs. FLIP also provides online fund transfer through multiple bank payment gateways in addition to RTGS/NEFT. FLIP uses FIX adapter to connect to multiple markets to serve different client categories including institutions, retail investors, traders and HNIs.

To mark 74 years of business, the Pune-based Bank of Maharashtra last week introduced “Maha-e-trade”‑‑-online share trading facility in its platinum jubilee year. Maha-e-trade is devised in association with three major trading houses viz., M/s Religare Securities Ltd., Munoth Capital Market Ltd., and Enam Securities Direct (P) Ltd., Maha-e-Trade is a three-in-one integrated account. Bank of Maharashtra helps customer to integrate his/her banking, demat and trading accounts. Customer can trade in shares backed by funds and securities available in their bank / demat account. Trading has been made very easy even for beginners.

Salient features of Maha-e-Trade include delivery based trading, intra day square off, lien marking on funds/ securities, no transfer of funds, investment in shares traded on the NSE and BSE can be made without having to visit the share-broker, all other associated hurdles like tracking of settlement cycles, paying and receiving funds in savings account, paying and receiving shares in Demat accounts have been removed. The Delhi Stock Exchange (DSE) general body too, in its meeting held in December last year decided to introduce an online trading platform. As more exchanges and brokerages take the online route, overseas Indians have a better chance of getting firmer control of their investments not just in stocks, but also in derivatives, commodities, currency and other traded instruments.

The Maharashtra Navnirman Sena (MNS) and the Shiv Sena’s campaign against non-Marathis living in Mumbai is beginning to worry the Gujarati community in that metropolis. It is true that the campaign is directed mainly against North Indians in the city but it is sufficiently unpleasant to make many Gujarati Mumbaikars consider shifting to Gujarat for safety. Some Gujaratis from Mumbai have already purchased apartments in Ahmedabad and many others are on the lookout for properties that they can buy. Six Gujaratis from Mumbai, who happen to be cousins as well, recently struck a deal for seven apartments in a housing scheme in the South Bopal area of Ahmedabad. “We have booked seven apartments in South Bopal for our six families,” said Nita Shah.

The 43-year-old Mumbaikar is in government service. Explaining why the cousins had bought so many flats together, Shah said that, apart from their love for Gujarat, they had also been driven by the anxiety caused by the campaign against non-Marathis in Mumbai. “We were born and brought up in Mumbai and we love the city, too,” she said. “But we feel more at home in Ahmedabad because our family originally came from this city. We plan to spend at least six months in Ahmedabad every year after retirement.” She said that following their decision to purchase property in Ahmedabad, many more Gujarati Mumbaikars had started thinking about buying property in their cities of origin in Gujarat.

Another Gujarati Mumbaikar, Sanjay Joshi, is a chartered accountant who currently lives in the Kandivali area of Mumbai. He said he had asked his cousin in Ahmedabad to look for property in the city that he could buy. Joshi is confident that because of the immense contribution of Gujaratis to the development of Mumbai and their substantial presence in trade and industry, the two Senas will not attack Gujarati Mumbaikars. “But our sense of security has been shaken by all that happened in Mumbai in the recent past,” said Joshi. “Some of the recent purchases were made by Gujarati Mumbai kars who are worried by the campaign against non-Marathis in the city,” said a leading real estate developer of Ahmedabad. Jaxay Shah, president of the Confederation of Real Estate Developers Associations of India (Gujarat), said Gujaratis living in Mumbai are thinking about shifting to Gujarat after the MNS launched its campaign against North Indians in that city.

The global construction industry will not return to growth until 2011 with emerging markets experiencing a 110% increases in output, according to a newly published ten year forecast.

Emerging markets will rapidly overtake the construction output of their highly developed neighbours with China becoming the world’s largest market by 2018, says the report from Global Construction Perspectives and Oxford Economics.

India is also set to race ahead as the US and Western Europe lag behind. Nigeria, Vietnam and Turkey will also experience strong growth.

Of the developed nations Japan will see the slowest growth in the next decade, the report also shows.

Today the global construction market is worth an estimated $7.5 trillion, representing 13.4% of global GDP.

But by 2020, construction will be a $12.7 trillion global market, an overall growth of 70% in the next decade.

It is predicted that China will have 19.1% share of the industry worth $2.4 trillion by 2020.

This will mean an increases in residential property being built as it is the largest construction market globally.

It is expected to account for 40% of the total global construction market by 2020 when it will be worth $5.1 trillion.

The report shows that the downturn in the global construction industry from 2007 to 2009 has been of epic proportions.

In developed countries this has caused a slump in annual construction output of over $650 billion, more than the entire output of the construction industries of both Germany and the UK combined, or over four times the size of construction output in Russia.

The brunt of this downturn has been taken by North America and Western Europe.

But the US will see the strongest growth amongst developed countries particularly during 2011 to 2013.

Despite the sub-prime crisis, house building will help to fuel the recovery.

Affordable property is set to play a key role in the residential real estate sector in India in 2010 on the back of a significant pickup in demand, according to the country’s developers association.

An upturn in the economy and the Government’s ongoing efforts to push growth in the infrastructure are expected to help the sector grow this year, said Kumar Gera, chairman of the Confederation of Real Estate Developers’ Associations of India (CREDAI).
‘This year will be crucial for the housing industry given the Government’s concern over the massive housing needs of the people, especially in urban areas,’ Gera explained.

said Kumar Gera, chairman of the Confederation of Real Estate Developers’ Associations of India (CREDAI).
‘This year will be crucial for the housing industry given the Government’s concern over the massive housing needs of the people, especially in urban areas,’ Gera explained.

‘By the end of 2010 we expect prices in the real estate sector to roll back to at least 90% of the level prevalent in 2007/08,’ he added. CREDAI estimates that values have fallen by 20 to 35% on average across different regions in the country since August 2008.

Real estate growth expectations are based on an assessment of GDP growth by CREDAI, the global revival, domestic sentiments and on the assumption that there would be no major unforeseen fluctuations in the economy or natural calamities this year, he explained.

The real estate market in India was most hit by the downturn between August and October of 2008 when the sales almost came to a standstill.
There were some early signs of recovery in March 2009 and since then prices have stabilised and sales went on to improve considerably by the end of the year, Gera also said.

The growth of the information technology sector in different markets such as Bangalore, Pune and Kolkata will help drive the growth of housing in the regions irrespective of the national IT scenario, he said. And US economic recovery would help stabilise the situation in the IT sector and activities in the Special Economic Zones (SEZs) in the country, he added.

Infrastructure is also set to aid the property market revival on a local basis. In Mumbai prices are already rising at the prospect of the city’s second airport coming up near Khargar. According to Gulam Zia, national director for research and advisory services at Knight Frank, the Navi Mumbai area is likely to grow faster than other location.

Opening may be some six to seven years away yet, he said, but it is already a factor along with a new trans-harbour link and extensions to the metro network.
Generally it is southern cities that will see growth, according to Zia, but places like Kolkata in the east are also expected to see substantial growth, led by the IT industry.
‘Other emerging locations include Mahesh Tala and Tara Tala. Many new townships are being constructed in Tara Tala, gradually transforming it from an industrial zone to a residential township. This will be a promising area in the future,’ Zia added.

British property owners in Spain are taking to the streets to protest at homes being demolished as they were allegedly built illegally despite having planning permission.

In the biggest demonstration by expatriates to date, hundreds of mainly retired British residents from Andalucía, have been waving placards and marching outside the offices of officials they hold responsible for ‘persecuting’ innocent home owners who bought properties in good faith.

The organisers, AULAN, are demanding an end to real estate and planning corruption across the region and an end to the insecurity thousands of owners are feeling as to whether or not they will be affected by the latest round of demolitions.

They are also demanding compensation for Leonard and Helen Prior, both aged 64, whose property was demolished a year ago despite having planning permission from their local town hall. The permission was subsequently declared void and their home declared illegal. They are now living in a garage on the site of their demolished home.

Top of the property owner’s hit list is Luis Caparros, head of planning and housing in Almeria, who has been dubbed ‘Demolition Man’ and ‘Mr Bulldozer’ for his enforcement of the illegal building issue.

He has recently declared a further 5,000 homes in the neighbouring Almanzora valley as illegal and owners are waiting to see if they will be demolished. The problem stems from a two tier planning system in which town halls, which have the authority to issue building licences, failed in many cases to adhere to regulations set by the regional government of Andalusia and allowed construction on designated rural land.

During a decade long construction boom corrupt mayors, often in cahoots with local builders, allowed swathes of countryside to be built over without the proper licences being issued.

Many British buyers unwittingly bought these illegal properties through unscrupulous estate agents and the lawyers recommended by them. They claim they are victims who bought in good faith and should not be penalised in a clamp down by regional authorities.

Those currently in limbo include Thomas and Carole Jones in Albox, some 30 miles from the Mediterranean coast. They face losing the three bedroom villa they bought almost four years ago for €250,000.

A spokesman for the regional council said it was acting correctly within the law. He advised that compensation should be sought from the town halls and mayors who issued the original illegal licences and not the regional council.

The price of re-sale property in Spain increased in January for the first time in 24 months, according to new figures and other reports suggest there are tentative signs that part of the country’s battered real estate market is coming back to life.Prices rose by 0.6% on average, with the regions of Cataluña, and La Rioja seeing the greatest recovery in price at 4.6% and 4.5%, according to figures from the real estate portal fotocasa.es.

Property prices also rose in the regions of Comunidad Valenciana, up 2,2%, Asturias up2%, Baleares with a 1,9% increase, Aragón up 1,4%, Galicia up 0,9% and Madrid up 0,7%.

While another index shows that overall Spanish property prices fell by 5.5% over the 12 months to the end of January.

But these figures from appraisal company Tinsa often need to be taken with a pinch of salt as they are based on their valuations, not on actual selling prices.

But the latest Tinsa index is an improvement on the 6.6% decline last month and confirms a general trend towards smaller price declines.
However activity in the real estate market is still very depressed.

The latest figures from the National Institute of Statistics shows that year on year the market shrank by 27% in volume terms to 372,000 transactions in 2009. They have fallen 48% since 2007 when there were 715,000 sales.

December 2009 had just 28,669 home sales, the second lowest level of monthly sales on record. But compared to December last year, sales were down just 1%. ‘That’s because by December last year, the market was already deep in crisis.

From now on, annualised comparisons won’t look so bad, and won’t give any indication how far the market has fallen,’ explained Marc Stucklin of Spanish Property Insight.

‘When the market hit the skids, resale transactions collapsed much quicker than new builds, which outnumbered re-sales throughout 2009.

In normal market conditions, it’s the other way around.

As 2009 went by the two started to converge, and in 2010 re-sales may once again overtake new builds, though it does depends on whether banks are prepared to lend to resale buyers,’ he added.

Whilst there’s little doubt that life is returning to the Spanish property market, it still remains utterly price sensitive, according to Chris Mercer, director of Mercers real estate agents with offices in Costa Cálida and in Jerez.

‘We are making it our business to find realistically priced property from motivated sellers for serious buyers who are in a genuine position to make a purchase.

The reality is that decent investment properties are out there, whatever the market, it just takes some expertise and effort to find them,’ explained Mercer.

‘If your property is overpriced you won’t sell and you’re wasting your own time and our time, whilst also giving the buyer an unrealistic view of the market. If you’re a motivated seller able to accept a realistic price for your home, we’ll find a buyer,’ he added.

He also believes that for investors renting to local people can prove fruitful. These include apartments in Jerez at €70,000 that can rent for €450 a month, a return of around 8%.

‘If you’ve got a 20% deposit then the rent will comfortably pay the mortgage and as you’re truly buying at the bottom of the market, you have an asset that will certainly appreciate in years to come,’ he said.

US commercial real estate prices increased for the second month in a row in December, rising 4.1%, but the sector continues to face several challenges, such as the rising tide of defaults and subsequent foreclosures, according to a new report.

The Commercial Property Price Index from Moody’s Investors Service/Real Estate Analytics said the increase in December was the largest month-over-month increase in the nine year history of the report and followed a small 1% gain in November. The volume of transactions also rose in December, typical for the end of the year, Moody’s added.

In December, 716 transactions totaling $9 billion were recorded in the month. But commercial real estate prices are still down 29.2% from a year ago and 39.8% from two years ago. They are 40.8% below their peak values, the index also shows.

Analysts at Moody’s said it is uncertain whether the recent price increases represent commercial real estate passing the bottom of the market or are just the ‘volatility of a market in transition’.

‘Although we are unable to conclude that the bottom to the commercial real estate market is here, we do believe that the period of large price declines is over,’ said Moody’s managing director Nick Levidy. ‘We will need to see data from the first few months of 2010 to develop a better picture of where things stand,’ he added.

Moody’s also reported that three of the four major property types recording price gains in the last quarter of 2009. Offices had the largest gain at 7.9%, while apartments improved 7% during the quarter and industrial increased 5.6%. Retail was the only major sector to decline, at 1.5%. While the year end results were an improvement, the annual decline in sector prices ranged from 19.0% to 23.2%.

In the top ten metropolitan statistical areas apartment prices fell 2.1% in the last three months of 2009 and industrial prices were down 2.8%, Moody’s said. Retail prices increased 3.1% during the quarter, while offices, which declined almost 20% in the third quarter and 10% in the second quarter, were up 26.8%.

The top 10 MSAs account for about 50% to 80% of the transactions in the national property type indices, Moody’s said. However, in the West, prices have fared better than the national average in three of the four price indices, the office sector being the lone exception. Western office prices fell 25.5% in 2009, compared to the national office annual decline of 19.8%, Moody’s said.

But while the large price declines may be over, the mounting foreclosures left in the wake of those losses still have to be processed through the system. In Denver, three local commercial real estate firms have joined together in a partnership to establish a distressed disposition company, American Property Solutions. It will work as property receivers and trustees, property and construction management, accounting and brokerage and leasing services.

The current shortfall in mid-priced residential real estate in Egypt will continue until 2012 and could push prices higher, it is claimed.

According to a new report from Markaz, property developers have focused more on the market sector as housing prices and demand for luxury properties fell in the country as a result of the global economic downturn.

Despite this the mid priced real estate sector remains undersupplied but the report predicts that as the economic recovery quickens developers will return to high end projects within the next two years although not to the extent that was seen in the past.

‘After going through the moderate impact of the economic slowdown, Egypt’s real estate sector is expected to provide healthy long-term prospects in all of its sub-segments,’ the report says.

The report studies the economic cycles in Egypt back to 1986 and argues that the average real GDP growth rate has been on the rise from 3 to 4% during the 1990s to 4 to 5% in the past decade. It forecasts that the cycle will last until 2014/15 with an average growth rate of 6%. But the possibility of a double dip in global economic growth trends could create a temporary glitch in this expected growth pattern.

Egypt’s population is expected to grow at its natural growth rate of 2% per annum and income growth is the key driver for real estate demand, it suggests. As more people get better paid jobs then a growth in demand for middle prices real estate is expected.

The report also suggests that take up levels are poised to return to the vibrancy of 2006/08 in 2012 when the average real GDP growth rate is expected to reach 6 to 7% again.

Due to the low mortgage penetration, which stands at 0.4% of nominal GDP, the source of funds to purchase a house has essentially been savings and sale of existing assets. Savings got leveraged by the growth in mortgage financing during the recent boom. However, the growth in lending has slowed down of late and the report expects mortgage financing by banks to recover during 2010/11 aided by an 8% average growth in deposits.

The report shows that in the residential sector sales levels contracted due to the economic slowdown which manifested itself in a fall in reservations and rise in cancellations of property offerings by major developers. But the downtrend turned around during the third quarter of 2009.

Meanwhile separately Blair Hagkull, head of the Middle East office of the property consultancy Jones Lang LaSalle, said that Egypt had been shielded from the worst effects of the financial crisis as it was less exposed to other global markets than other Gulf states.