AUGUST & SEPTEMBER 2011 Real Estate Newsletter

Editorial

Contents Dear Reader, Industry News ...... 2 The European financial crisis has claimed its first victim. Dexia, Private Equity News ...... 7 Belgium’s biggest bank was nationalized with a massive bailout Regulatory Buzz ...... 10 after an extraordinary drop in value of Greek bonds held by it Public Markets ...... 10 triggered its implosion .

Land Deals ...... 11 The funding scenario for Indian Realty companies continues to be Hospitality ...... 13 challenging. The BSE Realty Index plunged 53% in the past one Commercial Properties ...... 17 year, over 3 times that of the Sensex which fell 17%. Banks are Residential...... 19 shying away from lending to the sector, which is suffering from declining profits and uncertainty in the regulatory environment. About Avendus Capital ...... 23 RBI’s recent announcement to treat all Compulsorily Convertible Contact Details ...... 23 Debentures (CCDs) with options as ECBs is likely to impact PE funding in the sector. In a divergence from market fundamentals, developers are increasing prices while sales are falling. According to a research firm, the total unsold stock in the top 6 markets at the end of June 2011 was 503 mn sq. ft. as against 472 mn sq. ft. on March 2011. The unsold stock could take about 26 months to clear at the current pace of sales.

Faced with one of the worst liquidity crisis in recent times, the sector is yet to take concrete steps towards improving its cash position and credibility in the market. One hopes a mix of new regulations, increasing debt burden and tightening monetary policy would see developers deliver better value to customers – both in terms of price levels and transparency.

Disclaimer: The news contained herein has been taken from Happy Reading! published sources as indicated under each item. Avendus Real Estate Team Avendus will not be held liable for any erroneous data as published in the source indicated. Avendus also does not take any responsibility for any errors or omissions or results of any actions based upon this information.

Industry News repay the Rs 9,000 crore debt on Alok Industries. MID-SIZE BUILDERS EYE DISTRESSED ASSETS AT BETTER VALUATIONS BLACK MONEY: REALTY SECTOR Mint DEALS NOW UNDER I-T SCANNER The Financial Express Mid-size property developers are again acquiring distressed assets, mostly unfinished Real estate deals above a certain threshold in projects or undeveloped land, with the metros will be tracked by the income tax uncertainty in the sector making for pickings at department, in its bid to intensify vigil over prices much lower than their original valuations. unaccounted money floating in the system. With home sales dropping in the past nine According to officials, the crackdown by the months and a slowdown becoming evident in the department will not only cover real estate firms, property market, small developers who aren’t corporates and high net worth individuals (HNIs) able to complete projects are seeking a bailout. but also other realty buyers. The Central They have few other options, as most lenders Information Branch (CIB), the custodian of the including banks have turned wary of the sector. annual information return (AIR) database on Realty firms say many high-value projects are high value transactions, is looking at these stuck and developers are seeking exits even at relatively larger real estate deals closely with discounts of 25-30 percent. definite intelligence that the prices reported of these transactions are gross underestimates. Ajmera Realty and Infrastructure Ltd, Patel Not only the real estate buyers and developers Realty Ltd and Salarpuria Sattva Group but the I-T department will also go after the are among those actively negotiating such deals property dealers who are party to such deals. with potential sellers. MMR REALTY SALES PLUNGE 60 PC IN ALOK INDUSTRIES STARTS TO DIVEST TWO YEARS REALTY ASSETS The Indian Express Mint Property sales in the Mumbai Metropolitan Alok Industries Ltd, one of India’s largest textile Region (MMR) have plunged by 60 percent firms, has started divesting its real estate between June 2009 and June 2011, according portfolio to ease debt, almost a year after to latest figures compiled by the real estate announcing the plan. The company has signed research agency Liases Foras. Still, typical of an agreement to sell 73 acres at a 500-acre land the highly speculative nature of the financial parcel in Silvassa, the capital of Dadra and capital’s realty market, the weighted average Nagar Haveli, to a group of manufacturers, and rate of an apartment in Greater Mumbai has has sold a portion of its commercial building in rocketed to an all-time high of Rs 2.24 crore. Lower Parel, central Mumbai. The Mumbai- This means that for the price of one apartment in based firm aims to earn about Rs 1,500 crore by Mumbai, you could buy four apartments in cities selling its property portfolio over the next 18 such as , , , months. Most of the money will be used to retire National Capital Region (NCR) and Pune. With the debt of real estate subsidiaries and partly the exception of Hyderabad and Bangalore,

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which have seen a marginal fall in sales over the So some are offering discounts to offload two-year period, all other markets have inventory," he said. registered an enormous leap in property sales. FINANCIAL TURMOIL ADDS TO REAL PSU BANK LOANS TO REALTY COS UP ESTATE SECTOR’S WOES The Financial Express Mint

Banks are lending more money to real estate The global financial markets turmoil since sector. RBI had increased the provisioning Standard and Poor’s downgraded US sovereign requirement for advances to the commercial real rating last week may have a medium-term estate sector classified as standard assets, from impact on India’s real estate sector, putting a the level of 0.40 percent to 1 percent. A study of freeze on fresh office rentals and property growth in advances to real estate of 26 public purchases as well as on foreign capital. India’s sector banks (PSBs) and 15 private sector property sector is already battling its own banks during 2010-11 and 2007-08 reveals that issues—a liquidity squeeze with banks in the case of PSBs loans decreased from 29.4 restricting lending, slowing sales, high property percent during 2007-08 to 14.3 percent during prices and soaring debt. The impact of the 2009-10 and increased to 23.4 percent during economic situation in the US and Europe on 2010-11. On the other hand the growth of India’s realty market may resemble the panic advances to real estate sector of private banks during the first days of the Lehman Brothers steadily rose from 9.8 percent during 2007-08 to Holdings Inc, said Chintan Patel, partner-real 28.9 percent during 2010-11. estate practice, Ernst and Young.

PROPERTY BEING DISCOUNTED AS June-quarter earnings of many of the developers DEMAND DROPS that have announced results so far have been The Times of India dismal, mostly hurt by lower sales in Mumbai and the National Capital Region (NCR). Net Developers are not willing to publicly admit it, profits of DLF Ltd and Orbit Corp. Ltd have but the word on the street is that they are declined on margin pressures. Besides, India’s beginning to discount their properties in order to top six developers account for 60-70 percent of persuade people to buy. Some are offering the Rs 70,000 crore debt burden the sector is freebies. In Bangalore the discounts are said to reeling under, said Rajeev Bairathi, director- be between 8 percent and 15 percent on listed investment advisory, DTZ International Property prices. In Mumbai, where residential transaction Advisors. DLF has a debt of Rs 21,500 crore, volumes have dropped significantly, the Unitech Rs 5,000 crore, Emaar MGF Land Ltd discounts are steeper at 20-30 percent. Rs 4,000 crore, and Parsvnath Developers Ltd Prashanth Sambargi, partner at real estate firm Rs 1,200 crore. Mars Realty, said the majority of discounting is happening in projects with ticket sizes of Rs 70 With 60 percent of Indian software exports lakh to Rs 1 crore. Farook Mahmood, CMD of headed to the US, and nearly 20 percent to Silverline Realty, said the big five developers in Europe, there will eventually be an impact on Bangalore are not discounting on their products. Indian information technology companies, "But there is excess supply in the mid segment. potentially reducing demand for IT-centric office

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spaces, said Anuj Puri, chairman and country “Demand is clearly coming off because asset head, Jones Lang LaSalle India. Anshuman prices remain high and buyers believe that Magazine, managing director, CB Richard Ellis, prices could come down. The slight uptick in the said that during the 2008 slowdown, property July numbers compared to June is good news prices corrected followed by recovery in but that could be because developers are now sentiments and sale. “In the present scenario offering discounts. Moreover, disposable (too), prices should correct as they are sky- incomes remain strong allowing some buyers to rocketing.” purchase properties,” said Akshay Kulkarni, ED (residential services), Cushman and Wakefield. HIGH LOAN RATES DENT HOUSING According to Pankaj Kapoor, founder, Liases PROPERTY MKTS IN PUNJAB, Foras, the registration data comprises both new CHANDIGARH and second-hand sales of property. “The The Financial Express increase of 7 percent sequentially that we see in July numbers could be because properties have Rising lending rates has cast its shadow on the been sold at a corrected price and also because otherwise booming real estate market of Punjab, of an increase in second-hand sale of Haryana and Chandigarh, with prices of properties,” Kapoor said. residential property falling by up to 15 percent in the last couple of months. With potential DLF STARES AT RS 900 CRORE MORE homebuyers postponing their decision of PENALTY entering the real estate market in the wake of The Telegraph high lending costs, it is the private financers who are suffering a lot as their large investments are Real estate giant DLF may have to pay Rs 900 getting blocked in the absence of buyers. "The crore extra penalty if the Competition buying of residential property activity in Commission of India (CCI) finds it guilty of Chandigarh and areas like Zirakpur in Punjab abusing its dominant market position in three have taken a hit due to lending rates, the rates more projects in Gurgaon. The CCI stunned the of property have come down in the range of 10 housing market when it slapped a Rs 630-crore to 15 percent," Housing finance company HDFC, fine on DLF for unfair practices at its Belaire Joint General Manager (Punjab, Haryana and project in Gurgaon. The competition regulator is Himachal Pradesh), PC Srivastva said. now investigating charges of market dominance and anti-competitive practices in the Park Place, MUMBAI PROPERTY REGISTRATIONS Magnolias and New Town Heights projects. DROP 24 PERCENT IN JAN-JULY The Financial Express PRE-DIWALI REAL ESTATE LAUNCHES DIP BY 50 PERCENT The sales registrations of property in Mumbai The Economic Times between January and July, 2011 have fallen by almost a fourth over the comparable period of Going into a festive season that has traditionally 2010. Total registrations are lower by 24 percent driven up property purchases --- especially on down to 35,681 against 46,753 registrations the residential front --- the real-estate market, made last year. Registrations in July came off by this year, is not expected to witness any 28 percent year-on-year. exuberant display of tradition-fueled

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transactions. Real-estate experts believe that rates and scorching real estate prices. there will 50 percent dip in the new launches Predictably, some buyers are falling for the that usually happen during the pre-Diwali period. freebies. However, real estate experts warn that "Mumbai and Kolkata will have the least new buyers should exercise extreme caution while launches, followed by Hyderabad, Chennai and opting for these under-construction properties, Pune. More launches are expected in NCR as there are chances that some of these (National Capital Region) and Bangalore," says projects may miss the deadline for completion. Limaye, head of research and real-estate “Given the current state of the market, where intelligence services, JLL. government interventions have made it difficult for developers to survive without a price PREPAYMENT CHARGES FOR correction, offering freebies comes as a face FLOATING RATE HOME LOANS MUST saver for developers. Offering amenities and GO: RBI facilities then becomes one negotiation point to The Hindu Business Line avoid passing on abnormal price discounts,” explains Gulam Zia national director, research If the RBI has its way, banks may have to stop and advisory services, Knight Frank. recovering prepayment charges from home loan borrowers in the case of floating rate loans. MORTGAGE GUARANTEE CO TO TAKE Banks will also have to bear the onus of proving OFF BY MARCH 2012: NHB CHIEF that a disputed ATM or Internet-based The Hindu Business Line transaction is due to the customer's negligence or mistake. The RBI is of the opinion that floating National Housing Bank (NHB) has identified a rate loans pass on the interest rate risk from technical partner for its mortgage guarantee banks, which are much better placed to manage foray and expects this four-way joint venture to it, to borrowers. Thus, banks only substitute take off by March next year. “We are at the last interest rate risk with potential credit risk. stage of the deal”, R.V. Verma, Chairman & MD However, in the case of fixed rate loans, banks of NHB. The technical partner would be a US- can charge the appropriate prepayment based mortgage insurance entity and would pick penalties up 36 percent stake in the proposed joint venture, Verma said. The US based entity is IN REALTY, THERE AIN’T NO SUCH expected to approach the Foreign Investment THING AS FREEBIES Promotion Board for approval by December. The Economic Times DLF TO EXIT MUMBAI BY SELLING RS Free parking space. Free club membership. 2,500 CRORE PLOT Free alterations. These are some of the freebies Financial Chronicle real estate developers are showering on prospective property buyers these days. Badly Huge debt and rising interest costs have forced hit by the economic slowdown and higher DLF, India's largest property developer, to sell funding costs, most developers are making a 17.5 acres of land in Lower Parel in Mumbai, last ditch effort to keep the real estate prices which investment bankers say could fetch over stable by offering freebies to reluctant buyers, Rs 2,500 crore. Two officials close to the who are equally spooked by the high interest development said that DLF had appointed a

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leading property consultant in Mumbai to sell the said that it could be around Rs 1,500 crore. The land and was in talks with leading developers. country's largest realty firm’s net debt had One official said the land had been excavated increased by Rs 100 crore during the April-June and was ready for construction. DLF had plans quarter this fiscal to Rs 21,524 crore, but to build a 90-storey super luxury residential expects that borrowing would start moderating tower project on the land, which it had bought from this quarter onward. The company, which from defunct National Textile Corporation in reported a 13 percent fall in net profit to Rs 2005-06 for Rs 702 crore. The plan was to build 358.36 crore for the quarter ended June, said around 2,000 apartments to be sold at Rs 8-10 that it would utilise the proceeds from the sale of crore each. non-core assets (like hotel plots) to cut debt.

DB REALTY SELLS 50 PERCENT STAKE CABINET MAY CLEAR REALTY BILL BY IN MUMBAI PROPERTY TO ADANI WINTER SESSION GROUP The Financial Express Mint In an effort to check the growing malpractices in DB Realty Ltd, a company linked with the 2G- the Indian real estate sector, the Union Cabinet telecom scam, has sold off its 50 percent stake is likely to give its clearance for the Real Estate in a south Mumbai property to the , Regulation Bill, 2011, by the winter session of said three people familiar with the development. Parliament. The Adani Group has also bought the remaining 50 percent stake in the Carmichael Road HOTEL LEELA VENTURE SIGNS JV property, one of these people said, asking not to WITH PRESTIGE ESTATES FOR LUXURY be identified. Mint could not verify the identity of APARTMENTS entities that owned the remaining shares. Joint The Economic Times venture is estimated to be valued at Rs 450-500 crore. The 4,500 sq. m property is in an area Hotel Leela Venture and builder Prestige considered to be one of the most expensive Estates will jointly develop luxury apartments on nationwide. Properties on Carmichael Road are land adjacent to Leela's Bangalore hotel, typically priced at Rs 65,000-75,000 per sq. ft, fetching the luxury hotel group Rs 90 crore in consultants said. revenue. Prestige will have a 60 percent stake in the project, which is expected to generate DLF EYES 2 BIG NON-CORE ASSET revenues of Rs 240 crore, a person having SALES direct knowledge of the development said. Hotel Financial Chronicle Leela Venture will own the remaining 40 percent of the project, which will come up on a 2.3-acre Real estate giant DLF said it expects to finalise plot attached to Leela Palace hotel on the old at least two big-ticket deals for sale of non-core airport road in the city. The move is a part of assets this quarter and expressed confidence Leela Venture's strategy to realign properties to that the company will achieve the target of raise funds as it struggles with rising debt. Leela raising Rs 7,000 crore in the next 2-3 years Venture is also in the process of selling its IT through divestment. Although DLF did not business park, a commercial property in MRT disclose the size of the two likely deals, sources Nagar, Chennai for Rs 250 crore, and has been

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in the market to raise close to Rs 1700 crore (SEZ) in Pune to foreign investors will come up through sales of preferential shares to private for consideration of the high-level government equity (PE) companies and land sales to reduce panel on September 19. The proposal of DLF its mounting debt. Ackruti Info Parks (Pune) Ltd for sale of shares to foreign investor will be "placed before the UNITECH PLANS TO SELL ASSETS TO Board of Approval, headed by Commerce PAY OFF ITS RS 5,300-CR DEBT Secretary," an official said. Private equity major The Economic Times Blackstone is likely to buy the entire 100 percent stake in the 11.83 hectare SEZ in Pune, sources Real estate firm Unitech will sell non-core assets said. DLF has 70 percent stake in DLF Ackruti such as land, IT parks and SEZs to pay off debt, Info Parks (Pune) Ltd and remaining stake is which is at Rs 5,300 crore. In an interview, with Ackruti City Ltd. Earlier, the Department of Unitech managing director Ajay Chandra said Revenue had opposed the proposal stating that the company, India's second biggest real estate the transaction would amount to sale of land, company after DLF, has also managed to tie up which is not permitted under the SEZ Act and debt of about Rs 550 crore from two public rules. sector banks in the last few months, after facing significant debt financing crisis in the last six Private Equity News months. Chandra said the company would raise Rs 300-400 crore this year by selling land PIRAMAL SETS UP NBFC WITH RS 750 parcels, including one in Tiruvanathapuram. CRORE CAPITAL Unitech has also started talks with various PE The Financial Express funds as well as overseas real estate investment trusts to sell its four SEZs and one IT park. The Ajay Piramal-controlled Piramal Healthcare as a company has close to 5.5 million sq ft of rent part of its plan to enter financial sector services producing office space and another 2 million sq has set up a NBFC with capital of Rs 750 crore ft will be ready in the next 18 months. This is to foray into financing infra and real estate spread over four SEZs and one IT Park. projects. The company is headed by AK Purwar, Chandra pointed out that the sale of SEZs would former chairman of SBI. Piramal said his be completed in the next fiscal year as they are company may make a short to medium term now waiting for the reaction of the SEZ investment in insurance sector. The NBFC is authorities on some of the other SEZ currently firming up its business plans and has transactions that have taken place in the market hired around 18 people. recently. "In the meanwhile, we will not lose any money as we are already earning rent from US FIRM BRAHMA CAPITAL IN DEAL these assets," he said. WITH BESTECH The Economic Times GOVT TO CONSIDER DLF'S PLAN TO SELL PUNE SEZ New York-headquartered investment firm The Financial Express Brahma Capital has signed a joint development agreement with Gurgaon-based builder Bestech India's largest real estate firm DLF's proposal to Group to build a commercial office-cum-retail sell its stake in IT/ITeS Special Economic Zone complex on 12.2 acres in Gurgaon's Sector 16.

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Under the agreement, Bestech will build over 1 20 percent higher returns through upfront capital million sq ft of space on the land with 40 percent investment to aggregate land, value-add through of it in a commercial office tower and the rest as development activities and ultimate sale to a separate retail complex, said Sunil Satija, MD different buyers. Further it helps PE funds to of Bestech, which will invest Rs 300 crore in the raise capital from investors with longer project. The plan is to sell the commercial office investment horizon from institutions such as space while the retail space will be leased, he pension funds, university trusts, and sovereign added. wealth fund. It also gives private equity funds more control over the project in these tough TATAS TO RAISE $500M ABROAD FOR times. REALTY, INFRA INVESTMENTS Financial Chronicle INDOSTAR SEALS MAIDEN REALTY DEALS is raising a $500 million (Rs 2,230 Mint crore) fund from global markets to invest in big real estate and infrastructure projects in India. Non-banking financial company (NBFC) Indostar The move comes at a time when the real estate Capital Finance Ltd has signed its maiden real sector is struggling to raise funds and estate deals, lending around Rs.150 crore to two infrastructure projects are slow to take off. Tata Mumbai-based developers, said two persons Realty & Infrastructure, a subsidiary of the $67.4 familiar with the matter. The India-focused billion group, will raise money primarily from NBFC, set up by Ashmore Group Plc, Everstone sovereign wealth funds and overseas pensions Capital Management and the private equity (PE) funds for Tata Realty Initiatives Fund 2, which arm of Goldman Sachs, has an initial capital will be domiciled in Mauritius A Group official base of Rs.900 crore. Sumer Group has said the company had fully committed all of Tata borrowed close to Rs.100 crore and Sunshine Realty Initiatives Fund 1, which had raised $750 Infrastructure and Housing Pvt. Ltd a little less million from abroad, mainly Europe. However, than Rs.50 crore from Indostar, largely for the fund is not it’s not fully invested. The new project completion, land acquisitions and fund will invest in foreign direct investment- payments. compliant commercial and retail real estate projects, large townships, IT parks and even PEs MAY INVEST $125MN IN SHRIRAM build-out assets. PROPERTIES The Times of India PE FUNDS TURN DEVELOPERS FOR HIGHER GAIN Private equity arms of JP Morgan, IL&FS and The Economic Times Morgan Stanley may invest $125 million in Shriram Properties, which wants to refinance Private equity funds in the realty space like projects under development and acquire SARE, FIRE Capital, Tishman Speyer, IREO, distressed real estate assets. Bangalore-based Millennium Spire and others have turned Shriram Properties is the real estate arm of Rs developers and are developing their own realty 25,000-crore , but has TPG, projects so that it can earn higher returns for its Starwood and Walton Street Capital as large investors. This gives them access to at least 15- shareholders making it a heavily private equity

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backed Indian real estate developer. These investment from Och-Ziff Capital Management three investors hold over 40 percent in Shriram Group LLC, a US-based hedge fund and large Properties, which is developing 30 million sq ft of institutional alternative asset manager. In residential and office space across southern addition, Och-Ziff had committed investment in states in the next 2-3 years. Shriram Properties two projects so its total investment with the MD M Murali confirmed fresh $120-125 million Marvel group was Rs. 290 crore. In this round of fund raising at the project level, but declined to investment, too, the Indian developer has a identify potential investors. commitment from the Mauritius investor for investments into two more projects. Jhavar CARLYLE GROUP INVESTS $26 M IN indicated that Paracor would pump in another JERRY RAO’S HOUSING CO Rs. 150 crore, over and above the equity The Financial Express investment.

The Carlyle Group said it has invested $26 OMKAR RAISES RS 200 CRORE FROM million in Value & Budget Housing Corporation INDIAREIT (VBHC), the Bangalore-based low-cost housing The Financial Express developer promoted by former chairman Jaithirth Rao. The investment, to fund Omkar Realtors & Developers said it has raised new housing projects, comes from a $1.04- Rs 200 crore from the private equity firm billion sector agnostic growth capital fund of Indiareit to develop a premium residential project Carlyle Asia Growth Partners IV. The existing at suburban Worli. Omkar plans to develop investors in VBHC have also committed projects having an area of about 20 million sq. ft. additional capital but did not specify the details. in Mumbai Metropolitan Region (MMR) with The real estate developer, in which Housing specific focus on the island city and the sub- Development Finance Corporation (HDFC) urban districts over a five-year horizon. holds an equity stake, has also raised funds from India Financial Inclusion Fund previously. APOLLO GLOBAL TO STEP UP INDIA PRESENCE, EYES $1 BN INVESTMENT MADISON INVESTS 55 CRORE IN Mint MARVEL LANDMARKS The Economic Times Apollo Global Management Llc, the world’s sixth largest private equity (PE) fund by assets under The Mauritius-based Madison India Real Estate management, may have been slower than its Fund's private equity arm, Paracor Capital peers in entering India, but it plans to step up its Advisors has invested Rs. 55 crore for an 8 presence in the country over the next year. “We percent stake in Marvel Landmarks, a Pune- would like to deploy a lot of smart money in India based realty company. Marvel Landmarks is the and could easily invest up to $1 billion (Rs. FDI-compliant company of local developer, 4,590 crore) over the next 12 months, if the Marvel Realtors and accounts for 30 percent of environment and the opportunities are right,” the Marvel Group's total assets. Vishwajit Mintoo Bhandari, managing director, AGM India Jhavar, CEO, Marvel Realtors, said this is the Advisors Pvt. Ltd, the adviser to Apollo’s global second time Marvel Landmarks has received funds, said in an interview. Apollo is now looking overseas investment. In 2007, it received to invest in diverse sectors in India such as real

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estate, metals, auto components, media, oil and Regulatory Buzz gas, and other natural resources. RS 630 CRORE RAP ON DLF KNUCKLES IIML TO RAISE $750-900 MN ACROSS Financial Chronicle THREE NEW FUNDS Mint The Competition Commission of India (CCI) has imposed a fine of Rs 630 crore on DLF, the After growing nearly 10 times in the past six Delhi-based real estate developer, for abusing years—from handling $300 million (Rs 1,395 its dominant market position. In the order loaded crore today) of assets in 2005 to $3.2 billion in on its website, the commission, saying DLF had 2011—IL&FS Investment Managers Ltd (IIML), violated certain sections of the competition law, the largest private equity (PE) firm in India, plans levied a penalty of 7 percent of the company’s to focus on consolidating its position this fiscal average turnover in the last three years. even as it is raising three funds. IIML, the PE arm of Infrastructure Leasing and Financial Public Markets Services Ltd (IL&FS), is currently raising three funds —TARA IV, a growth equity fund; a rental SOBHA DEVELOPERS' Q1 NET DIPS 10 yield fund; and its latest addition, a PIPE fund. PERCENT Each of these funds will be $250-300 million in The Hindu Business Line size. A significant increase in provision for income tax BPTP, JP MORGAN NAME VALUERS, has led to a 10 percent dip in net profits for PLAN EXIT MOVE Bangalore-based real estate company Sobha Mint Developers, to Rs 30.9 crore during the first quarter of this fiscal. Last year, the company Property developer BPTP Ltd and JP Morgan recorded Rs 34.3 crore during the corresponding Chase and Co. have asked consultants DTZ quarter. However, its net sales went up International Property Advisors and Jones Lang marginally to Rs 316.7 crore (Rs 309.7 crore) LaSalle India to value the real estate company’s during the quarter. “Sales in the first two months assets. Harbour Victoria Investments Holdings of the said quarter were not good. However, it Ltd, an affiliate of JPMorgan, acquired a 3.86% picked up during the third month,” J.C. Sharma, stake in the Gurgaon-based company for Rs. managing director, Sobha Developers, said. 215 crore in 2008 and Rs. 26 crore in 2009, according to a draft red herring prospectus that PROFIT DROPS 7.78 PERCENT BPTP filed in end-2009 for a proposed Rs. 1,500 TO RS 20.03 CRORE crore initial pubic offering (IPO). Once the Mint valuation is done, both sides will negotiate and reach a strategic decision on how to facilitate the Real estate developer Omaxe Ltd reported a exit of the investor, said two people familiar with 7.78 percent drop in its consolidated net profit the development. for the first quarter that ended 30 June at Rs 20.03 crore, compared with Rs 21.72 crore during the year ago quarter. However, the firm's revenue in the April June period increased 30.11

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percent to Rs 329.08 crore, compared with Rs shareholders’ approval. Parsvnath Chairman 252.93 crore during the same quarter last fiscal. Pradeep Jain had said the company would raise this amount primarily to reduce its debt. BRIGADE SET TO RAISE RS 600 CRORE FOR HOSPITALITY, RESIDENTIAL MACQUARIE BUYS 2.81 PERCENT IN PROJECTS REAL ESTATE The Hindu Business Line The Economic Times

Brigade Enterprises, a Bangalore-based real Australia-based Macquarie Bank has, since estate developer, is planning to raise Rs 600 August 17, purchased a 2.81 percent stake in crore through the private equity (PE) route for Indiabulls Real Estate from the open market, as hospitality and residential projects. The listed per disclosures to the BSE and NSE. The bank entity plans to raise Rs 300 crore each for bought over 1.14 crore shares of Indiabulls Real hospitality and affordable homes (residential) Estate in five transactions from August 17 to 22, projects. “We are in discussion with a few at Rs 88 crore. private equity players to raise money for four hospitality projects spread across cities of Land Deals Chennai, and Kerala,” M. R. Jaishankar, chairman and managing director, Brigade CONCERN OVER LAND VALUE Group, said. “Another Rs 300 crore is being APPRECIATION CLAUSE IN BILL raised for the 120-acre integrated residential Financial Chronicle project in Devanahalli to be developed near the international airport in Bangalore,” he added. Developers of large townships and realty The company is building a hotel for Holiday Inn projects who need to acquire 100 acres or more in Chennai and two hotels in Mysore — one on of land may find the going quite tough if the draft Sayyajirao Road — and the other on KRS Road, Land Acquisition and Rehabilitation and and a holiday resort in Vaikom near in Resettlement Bill comes into effect. Consultants Kerala. and developers say the bone of contention is the clause: “Upon every transfer of land within 10 PARSVNATH TO RAISE UP TO RS 2,000 years of the date of acquisition, 20 percent of CRORE THROUGH QIP the appreciated value shall be shared with the The Hindu Business Line original owner whose land has been acquired.” “After acquiring the land, developers start In a filing to the (BSE), investing in infrastructure, roads, light and the company said it has received approvals to drainage connectivity to the airport. The land raise up to Rs 2,000 crore in long-term funds value goes up four times due to the through the issuance of securities. The company development of the area, which is done by the will raise the amount “by way of Qualified developer who takes all the risk to develop it. If Institutional Placement (QIP) to Qualified the developer is taking all the risk and pain to Institutional Buyers (QIB),” it added. The board develop the area then the reward should ideally of the company had earlier sanctioned the go to him,” said Ravi Ahuja, executive director of implementation of the fund-raising plan over a Cushman Wakefield. 12-month period in August, subject to

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INFLATED LAND PRICES WORRY on acquisition of land of 50 acres and more in BUILDERS urban areas. Rural development minister Jairam The Times of India Ramesh told a delegation of farmers from UP that his ministry would unveil a reworked draft The Navi Mumbai secretary of Maharashtra land acquisition and rehabilitation and Chamber of Housing Industry, Manohar Shroff, resettlement bill 2011. said the fact that plots were being bought through the tender process at very high prices, TOO MANY ISSUES TO DEAL WITH FOR leading to market instability was a cause for RAYMOND concern. Recently, two plots in Nerul The Times of India admeasuring around 1,200 sq m, were sold at a maximum rate of Rs 1.62 lakh per sq m, he said. Apparel maker Raymond Ltd, which is planning Two other plots in Nerul went for a rate of to sell its 125-acre property in Thane. Raymonds around Rs 1.53 lakh per sq m, while a fifth plot had tried to develop the land twice, but in vain. there was sold for over Rs 1.27 lakh per sq m, But this is not the only reason for the decision to he added. sell it. The land requires many government clearances before it can be developed. Its ATS INFRASTRUCTURE BUYS 14-ACRE current use is for industrial purposes. To get the PLOT IN GURGAON FOR RS 150 CRORE government to change it to residential usage The Economic Times would be a time-consuming process. There are slums on around 30 acres of the sprawling plot, ATS Infrastructure has bought a 14-acre plot in which means payments to the slum-dwellers or Gurgaon for Rs 150 crore and will build an upper rehabilitation. Also, a huge chunk of the property mid-market residential project, in what would be is land that belongs to the collector and like in the builder’s first real estate project in the city. case of Mafatlal Group and Bayer Life Sciences, Speculation is that real estate fund HDFC it involves paying almost 50 percent of the sale Portfolio Management Services has part- proceeds as "unearned income" to the financed the purchase, putting in Rs 100 crore. government. The plot is close to the under-construction Dwarka-Manesar expressway in Gurgaon. The NTC GENERATES RS 5,987 CRORE developer can build close to 1.4 million sq ft on THROUGH SALE OF SURPLUS LAND the 14-acre plot. Some farmers from whom the The Economic Times seller bought the land originally, will also have to be compensated by ATS. National Textiles Corporation (NTC) has generated Rs 5,987 crore funds till date from the ACQUISITION OF LAND OVER 50 ACRES sale of 1,533 acres of surplus land. Based on TO BE CUMBERSOME the recommendations of the Board for Industrial The Asian Age and Financial Reconstruction (BIFR), the company has closed down as many as 77 In a bid to make land being acquired for unviable units and launched self financed revival residential purposes more cumbersome, the of 24 mills. The resources are to be generated government is all set to incorporate application by sale of surplus land and assets. The of rehabilitation and resettlement (R&R) clause

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company has surplus land in various cities such the Oberois. EIH has 8.2 acres of prime land in as Mumbai, and Coimbatore. Bangalore and a 55-acre existing leisure property in Goa which are being taken up for a DLF TO SELL GURGAON PLOT FOR 300 residential-cum-hotel project. CRORE The Economic Times PUNE-BASED ST LAURN HOTELS AND RESORTS TO OPEN 15 NEW HOTELS BY India’s largest developer DLF is selling a 13- 2015 acre plot in Gurgaon, Haryana, as part of its plan The Economic Times to ease its debt burden through asset sales. About 1 million sq ft of commercial space can be Pune-based ST Laurn Hotels and Resorts plans built on the plot, which is expected to fetch Rs to invest an estimated Rs 3,000 crore in opening 300 crore for the realty firm. DLF is believed to 15 new hotels by 2015. One-third of the new be talking to a few large corporates and a high hotels will be in Gujarat, where the hotelier is net worth individual. DLF is expecting a price of eyeing destinations like Surat, Ambaji, Rajkot, Rs 2,800-3,000 per sq ft. The land is close to the Vadodara and Jamnagar. new southern peripheral road in Gurgaon, which will connect national highway 8 with MG Road. HOTEL LEELA VENTURE MAY ANNOUNCE MID-SEGMENT FORAY Hospitality NEXT QUARTER The Economic Times OBEROIS, RELIANCE MAY TIE UP FOR HOTELS, REALTY VENTURES Hotel Leela Venture said the company expects The Hindu Business Line to announce its entry into mid-segment with the launch of a new brand by the next quarter of this The Oberoi Group is headed towards a strategic fiscal. The company which operates seven partnership with Mukesh Ambani-led Reliance luxury hotels and resorts across India, is working Group for developing hotels and real estate on a diversification plan to set up a chain of property complexes in Bangalore and Goa. The three star hotels under ‘Leela Gardens’ brand hotel and leisure group's patriarch, P.R.S that will target religious destinations. Oberoi, said at a press conference after the 61st AGM of EIH Ltd that the Reliance Group, the DROPS GOA HOTEL “friendly investor” in EIH, could be the strategic PROJECT partner of the group in a separate venture. The Mint emerging alliance, other than the present one in EIH, between the two groups will “most Morgan Stanley-backed Oberoi Realty Ltd has probably” be formalised in the near future. dropped its Goa hotel project more than a year after it acquired the property through a bank The proposed initial “multi-use” projects in auction for Rs 61 crore. The Mumbai-based Bangalore and Goa would be based on a new developer has sold the 15-acre property for Rs business model, the Reliance group would be 82 crore to a private hotelier, said Oberoi the key investor in the properties and EIH brand Realty's chief financial officer Saumil Daru. and management would be the contribution from Oberoi Realty had bought the property in the

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form of a non-operational hotel with plans to set to launch Marigold, a five star property revive and run it. It doesn't have any other located in Hyderabad shortly and another project project in Goa. in Kakinada early next year. The company, which now has three Greenpark projects in DS GROUP TO FOCUS ON NON- Hyderabad with 148 rooms, Chennai (171 TOBACCO BUSINESS rooms) and Visakhapatnam (100 rooms), is set The Financial Express to take its inventory up to 736 rooms by next year and 616 rooms by September-October, Shifting gears and moving away from its tobacco with the addition of Marigold project, Mohan business, the Rs 1,860 crore diversified Krishna, Vice President of Green Park Hotels & Dharampal Satyapal (DS) Group, promoter of Resorts Ltd., said. Rajnigandha pan masala, now aims to double its turnover riding on the high-growth rate clocked LEELA GROUP TO SELL LEELA by its non-tobacco business. On its hospitality RESORTS KOVALAM FOR 500 CRORE business side, the DS Group is in the final TO NRI RAVI PILLAI stages of roping in the Radisson brand for its 5- The Economic Times star hotel coming up in Kolkata. The company also plans to add a second hotel in Kolkata, The Leela Group is set to sell its marquee which will be in the budget segment. property in Kovalam, a famous beach on the outskirts of the capital of Kerala, as part of an EIH TO SET UP 2 NEW HOTELS IN ongoing exercise to ease its debt burden. The KOLKATA property, Leela Resorts Kovalam, is being sold The Times of India for 500 crore to NRI Ravi Pillai, said Leela Chairman CP Krishnan Nair. The deal, however, The city of joy would soon have two more hotels will not result in Leela exiting the property from the Oberoi Group. EIH is planning two completely. It will enter into a management hotels at Rajarhat with a combined investment of contract with Pillai to manage the property for 30 over 950 crore. It may be noted that Rajarhat is years. Pillai confirmed the deal with the Leela becoming the hotel hub of the city. Shristi has Group will be finalised soon but declined to tied up with Starwood for a West Inn brand hotel provide details. in Rajarhat, Taj Group is contemplating a Ginger while Universal Success has plans to set up STARWOOD HOTELS TO OPEN 10 hotels with J W Marriott. Salarpuria Group has HOTELS IN INDIA started work on a three star hotel near Axis mall. Financial Chronicle Ambuja Realty has already set up a Swisshotel in this eastern fringe of Kolkata. Starwood Hotels and Resorts Group said it plans to open 10 Star Hotels across the country GREENPARK HOTELS & RESORTS TO at an investment of Rs 1,000 crore in the near LAUNCH MARIGOLD BY OCT future, of which five would commence before The Hindu Business Line 2014 under its young brand 'Aloft'. UrbanEdege Hotels, a partnership company between Appllo Greenpark Hotels & Resorts Ltd., which owns Global Management and Auromatrix Hotels, and manages a chain of hospitality projects, is owning Aloft brand, has already identified the

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locations for five hotels, Starwood director brand in India with the launch of a new hotel (Operations) Vivek Bhalla told reporters at the property here. “The debut of DoubleTree by launch of one of its four-star hotels. One would Hilton in India is a significant milestone in our be opened at Chandigarh next month and brand's continued growth strategy to provide another at Ahmedabad by October and the outstanding hotel offerings in the world's management was in search of other five gateway cities,“ DoubleTree by Hilton Global locations. Head Rob Palleschi said in a statement. The new 196-room hotel located in Mayur Vihar is HOTEL CHAIN HILTON WORLDWIDE TO owned by Eros Resorts and Hotels, an Eros SET UP 50 HOTELS IN INDIA IN FIVE Group company, and managed by Hilton YEARS Worldwide. The Economic Times US CASINO GIANT MULLS LUXURY Lenny Menezes is a busy man these days-the HOTELS IN INDIA chairman of the Hilton Worldwide in India has Financial Chronicle the daunting task of launching one hotel in the country every 45 days. Menezes has the The world’s largest casino entertainment mandate to re-establish the Hilton brand in India company, Caesars Entertainment Corporation is and expand the hotel chain quickly to benefit in talks with leading Indian developers and from the impending boom in the hospitality hospitality players to expand its presence in the sector. Hundreds of hotels will be adding up to country. Caesars Global Life, the new hospitality 155,000 rooms around the country in the next unit of the company, is leading the discussions. five years-out of which 65,000 will be branded. The $8.8-billion company launched Caesars Hilton on its own will set up 50 hotels in the next Global Life in May to develop branded luxury five years, out of which six hotels are operational hotels, restaurants and other lifestyle amenities in New Delhi, Mumbai and Chennai. in resort destinations around the world.

SPREE HOTELS TO GO PAN INDIA, ACCOR'S 3 NEW HOTELS IN INDIA PLANS 10 PROJECTS Financial Chronicle Financial Chronicle Global hospitality major Accor will launch three Spree Hotels, a start up hospitality venture hotel brands in India by the end of this year, based in Bangalore, plans to go pan-India by taking the total number of its brands here to six. setting up 10 hotels across the country in tier I Formule 1, Sofitel and Pullman are the brands to and II cities in the next two years, its top official debut. said. NADATHUR GROUP PLANS TO LAUNCH HILTON LAUNCHES DOUBLETREE RESORT, BUSINESS HOTEL CHAIN BRAND IN INDIA Mint Financial Chronicle N.S. Raghavan, one of the seven founders of International hospitality firm Hilton Worldwide Ltd, is formalizing the investment said it has introduced the `DoubleTree by Hilton' structure of his Nadathur Group, which will now

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have four segments. Kick-starting the shift in properties — Srinagar and Bangalore. We have momentum, the Nadathur Group’s Silver Needle five more properties coming up in Hyderabad, Hospitality arm is preparing to launch an Bekal (North Kerala), Coorg (Karnataka), international $100 million resort and business Coimbatore, and Gurgaon this year and another hotel chain. The Singapore-headquartered firm, in Dwarka by 2012-end,” said Veer Vijay Singh, has already acquired properties in Bali in chief operating officer, Vivanta by Taj, at the Indonesia, Sri Lanka and Bangalore. “We are launch of the third Vivanta by Taj property in looking at acquiring a hotel chain in Australia. Bangalore. We are in talks; it’s too early to say anything more about it,” Raghavan said in an interview. ASCOTT PLANS TO OPEN 1,400 SERVICED HOMES IN INDIA STARWOOD TO BRING ST. REGIS TO The Hindu Business Line NCR The Financial Express Targeting the corporate traveller, Singapore- based serviced residence owner-operator The Starwood Hotels & Resorts Worldwide, that runs Ascott Ltd plans to open 1,400 apartment units brands like Westin and Le Meridien, is set to in India in the next couple of years. The bring in its eighth brand in the country. The company announced the opening of about 300 global hotel chain has signed up to start with its units across two properties in Bangalore and first St. Regis property, a luxury brand, in Delhi Chennai. “Currently we have five other NCR. This is part of Starwood’s overall plans to properties with over 1,100 apartment units under have 50 hotels in India by 2012 and 100 by development in Bangalore, Chennai, Hyderabad 2015. According to a recent report from global and Ahmedabad,” said Ronald Tay, Ascott's consulting firm HVS, the luxury hotel segment in chief investment officer. Together the seven India is expected to see an investment of about properties in India will cost more than Rs 1,125 Rs 16,400 crore by 2015. This is around 35 crore when fully developed. percent of the total investment of Rs 46,200 crore required in the Indian hotel industry over DUET TO LAUNCH 30 HOTELS IN 3 the next four years. Of the 89,449 rooms YEARS proposed to be added during the period, 18 Financial Chronicle percent will be in the luxury segment. Duet India Hotels, a business arm of London- VIVANTA BY TAJ SET TO OPEN IN based Duet group and alternate asset manager HYDERABAD, BEKAL, COORG with over $2.5 billion equity in emerging The Hindu Business Line markets, is planning to launch around 30 three and four-star hotels across India with an Hospitality major Taj Hotels Resorts and investment of Rs 3,500 crore in the next three Palaces plans to open at least five properties years. Naveen Jain, president, Duet India Hotels under its Vivanta by Taj brand this fiscal, said that it has already raised $165 million from according to a top official of the company. foreign institutional investors and the additional Currently, the group has 21 hotels under this $135 million was yet to be raised from private brand that is positioned as an upper-upscale equity. “We launched 217-room 4-star hotel in product. “This year, we have opened two Pune with a total investment of Rs 170 crore,”

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Jain said. In 2009, it opened its first 114 room 4- of Lehman Brothers in 2008 have come off by star hotel in Jaipur with an investment of Rs 82 nearly 40 percent. The upmarket Indiabulls crore, he said. Finance Centre at Lower Parel in central Mumbai charges an estimated Rs150-160 per Commercial Properties sq ft. Cushman & Wakefield points out that rentals were over Rs 300 in Lower Parel in HIGH RENT FORCES TO 2008. SHIFT OFFICE Financial Chronicle Cushman & Wakefield says that rentals in Nariman Point are around Rs 300 per sq ft per The company has decided to move its marketing month, down from Rs 500 in middle of 2008. division, which constitutes a significant portion of Over the last five years, the vacancies have its workforce in Mumbai, from premium office risen from 5 percent in 2007 to 18 percent in complexes One Forbes and World Trade Centre 2010 and could hit 23 percent by end-2012, in the South Mumbai area to One Indiabulls says the JLL report. Centre at Elphinstone Road in central Mumbai. Two senior company officials confirmed the HORIZON REALTY FUND LAUNCHES development. “Shifting offices from South AMANORA TOWN CENTRE Mumbai towards Central Mumbai is a trend Financial Chronicle underway for the last two years. It is mainly being done as these buildings are new, have Mumbai-based Horizon Realty Fund has modern facilities and are more efficient. Most launched the first phase of 11 lakh sq ft offices are looking for bigger and better space Amanora Town Centre (ATC), one of Pune’s and definitely these building are better in term of largest shopping, entertainment and leisure amenities and also rentals,” said Aniruddh destinations with an investment of Rs 635 crore. Wahal, director at international property The fund, managed by Everstone Capital consultancy firm DTZ. Advisors, a spinoff of Future Capital Holdings, has formed a 50:50 joint venture company City DEVELOPERS STARE AT VACANT Realty Development with City Corporation, a OFFICE SPACES Pune-based realty developer. The Financial Express RETAIL FDI TO UP ABSORPTION RATE Around 60 million sq ft of office space is likely to OF SHOPPING SPACES: JLL remain vacant this year across the country as The Financial Express fresh supply enters the market, according to a report by property consultant Jones Lang As the $28 billion organised retail sector in India LaSalle. In Mumbai alone, around 80 million sq awaits the Cabinet nod on FDI in multi-brand ft of commercial real estate will be ready for retail, industry experts indicate that the occupation by December this year, the report introduction of FDI will lead to a boom in the says, adding that as much as a fourth may not retail real estate market and invite more find takers as the economy slows. Not investments from real estate developers and surprisingly, rentals of Rs 500 per sq ft at the investors, including private equity firms and fund peak of the real estate boom before the collapse managers. According to leading real estate

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services firm Jones Lang LaSalle (JLL), the of Jet Airways. For the balance of developed absorption of shopping centre space in India will area, Godrej Properties and Jet will spilt the increase by 10-15% in the first year of the profit equally. Godrej Properties proposes to introduction of FDI and up to 35% by the third develop about one million square feet of office year. Sanjay Dutt, CEO – business, JLL says, space in three years. As the current rates at “Retail penetrates beyond the top seven cities, BKC hover around Rs 25,000-30,000 a sqft, the into areas where there is a significant shortage development could rake in Rs 1,500-1,700 of well-planned, well-developed and crore, said real estate consultants. professionally managed shopping centres. Hence, the introduction of FDI in multi-brand 6 MILLION SQ FT OF RETAIL MALL retail will catalyze more investment SPACE ADDED IN INDIA IN H1 2011: opportunities. It will even attract firms which CBRE have been cautious in investing in the retail The Financial Express space so far.” Driven by aggressive expansion by organised V SQUARE LAUNCHES INTEGRATED retailers, over 6 million square feet of retail mall COMMERCIAL HUB IN DELHI space was added across India in the first six EXTENSION months of this year, primarily in the metro cities, Financial Chronicle according to a report by research firm CB Richard Ellis India. In 2010, a total of 5 million V Square, a real estate development square feet of organised retail space was added, management company, has launched a CB Richard Ellis India (CBRE) said, but did not commercial project named 114 Avenue, located provide data on the total available organised at Sector 114, Delhi Extension, Gurgaon. retail space in the country. According to the report by the firm, the NCR, Mumbai, Bangalore, GODREJ PROPERTIES TO DEVELOP Pune and Chennai witnessed most of the retail JET AIRWAYS' LAND AT BANDRA- expansion activity. A number of leading brands KURLA and national and global retailers began renewing The Hindu Business Line their expansion plans across the country toward the latter part of 2010. This move gained further Godrej Properties has entered into an momentum in the first half of 2011, CBRE said. agreement with Jet Airways to develop the The report said though there has been an airline's 2.5-acre property at the Bandra-Kurla increase in demand for retail space, there is still Complex here. The deal was doing the rounds a lot more space available, as the supply for over a year. Jet had bought the plot for Rs pipeline is quite large, especially in leading 399 crore in 2006. According to the agreement, cities. Godrej Properties will take on the Rs 360-crore debt obligation Jet Airways has on the property COMMERCIAL REALTY RENTALS and also pay the airline Rs 135 crore as PLUNGE IN MUMBAI & NCR compensation for expenses incurred so far. The Financial Express Further, Godrej has agreed to sell 161,460 sqft of carpet area to Jet Airways at development Rentals in commercial real estate still remain cost. This space is for housing the headquarters sluggish in Mumbai and Delhi with huge

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unutilised office space in these markets and property by March 2012, "even at a loss", as it companies scouting for better deals on rentals has decided to exit the real estate business offered by developers. The rentals in the completely to repay the mounting debt. "We are National Capital Region (NCR) and Mumbai in considering various options for the property. the second quarter of the calendar year are back However, nothing has been finalised yet. to mid-2006 levels, according to data compiled Overall, the realty asset portfolio exit would not by CB Richard Ellis. “The fall in rental in Delhi result in loss, but a specific asset sale may," from 2007 to Q2 of 2011 has been said Sunil Khandelwal, chief financial officer, approximately 3-20 percent, depending upon the Alok Industries. Alok Realtors had acquired the location. In Gurgaon, it has been between 10 building with a total space of 641,000 sq ft at an percent and 25 percent, while in Noida, it is 6-7 average rate of 17,000 per sq ft in Peninsula percent. In Mumbai, on an average, the rentals Business Park, in one of the most expensive fell by around 40 percent to 45 percent since deals of 2007. The real estate market, however, 2008,” says CB Richard Ellis CMD Anshuman has been on the decline since then, with an Magazine. intermediate recovery that lasted only for 10 months in 2009-10. The group currently has a “Though the leasing off-take has not been too debt of Rs 10,685 crore, said a company bad with companies expanding operations and executive. moving to better locations, it is an opportunistic market, there is availability of space and Residential corporates are looking for discounts,” says Amit Goenka, national director (capital transactions), GODREJ PROPERITIES SIGNS JV WITH Knight Frank India. At present, of the total 67 MAGIC INFO SOLUTIONS LTD TO million sq ft of Grade-A office space in Mumbai, DEVELOP NEW PROJECT IN GURGAON about a fifth is vacant, according to a recent The Economic Times Jones Lang LaSalle report. Real-estate firm Godrej Properties Ltd said it ALOK REALTORS MAY SELL LOWER has signed a joint venture with Magic Info PAREL PROPERTY AT A LOSS Solutions Ltd to develop a residential project in The Economic Times Gurgaon. The project will be spread over 22 acres of land and will have a total saleable area Real estate valuations are falling to new lows in of 2 million square feet, the company said in a India's biggest real estate market - Mumbai. In statement. what could open a Pandora's Box for the sector, Alok Realtors, the real estate arm of Alok IREO LAUNCHES TOWNSHIP IN Industries, which had bought a commercial PANCHKULA building from Peninsula Land in Lower Parel four Financial Chronicle years ago, is now desperately trying to dispose it of even at a loss. Alok Realtors had bought the The Ireo — Fiveriver, a project by real estate property for Rs 1,075 crore in 2007, in the company Ireo, offers a scenic view of the middle of the property boom. A top executive in pristine Shivaliks, promising a resort-like the publicly-listed Alok Industries confirmed that experience with captivating valley views, green the company has the option of selling the landscapes, bordering woodlands and a variety

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of recreational options. The integrated township announced the launch of 4 million sq.ft this year, project spans an area of 200 acres and is and by fiscal-end we will have 10 million sq.ft located in Panchkula, on the outskirts of under various stages of planning and Chandigarh. Ireo Fiveriver is a 15-minute drive development,” L.S. Vaidyanathan, Executive from Chandigarh, being strategically located with Director, Nitesh Estates, said. Nitesh Estates quick access to NH22. informed the BSE that its subsidiary, Nitesh Urban Development Private Ltd, has signed a CHD DEVELOPERS LAUNCHES PHASE joint development agreement for a residential III OF KARNAL TOWNSHIP project on Sarjapur Outer Ring Road in Financial Chronicle Bangalore. The project would offer 7-lakh sq.ft of saleable development, with a realisation of Rs CHD Developers, a Delhi-based firm, has 300 crore over the next couple of years. expanded its flagship township CHD City Karnal by an additional 23 acres of plotted development ORRIS OFFERS CARNATION by launching phase III of the township, which will RESIDENCY IN NEW GURGAON be a plotted development. The total area of 23 Financial Chronicle acres has been divided into 215 plots for construction purposes. The sale value of the Orris Infrastructure has started the construction third phase has been fixed at Rs 125 crores. of Carnation Residency – a residential project spread over more than 25 acres of land in PRESTIGE GROUP LAUNCHES Sector 85, New Gurgaon. The project will be TRANQUILITY IN BANGALORE completed by 2013. The completed project will Financial Chronicle offer 2 per cent ready to move-in apartments.

Prestige group has launched Prestige LARGEST INTEGRATED TOWNSHIP IN Tranquility, an expansive 38-acre residential AMRITSAR BY ALPHA G CORP development on the Budigere Main Road, in Financial Chronicle close proximity to NH4. Prestige sees Budigere as a destination with a lot of potential to expand Alpha G Corp, a partner of Morgan Stanley and considering its proximity to the main city and the an FDI-funded real estate developer has airport among others. launched Alpha International City, the largest integrated township in Amritsar. The Rs 650 NITESH ESTATES SIGNS PACT FOR crore township will be developed in three phases RESIDENTIAL PROJECT IN on land owned by Venus County Developers BANGALORE and based on the Real Estate Asset The Hindu Business Line Management Model (Ream). The 300-acre township will combine plotted development, Real estate developer Nitesh Estates plans to international quality civic infrastructure and launch 6 million sq.ft of development, including a dedicated commercial space of 25 acres. The villa and mid-income housing projects, in the plot for first phase has been received from the next couple of quarters in Bangalore. The government of Punjab. It will offer plotted company plans to launch 10 million sq.ft this development in sizes ranging from 200-500 sq fiscal at about Rs 1,900 crore. “We have already yd in five categories. Construction has been

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started on phase I of the city comprising 100 Edapally, Kochi. The project is situated 2 km acres. The total investment in the first phase will away from NH-47 and NH-17. Royal Heights, be Rs 200-225 crore. Phase I plots have been which is the fourth Hoysala’s project in Kochi, priced at Rs 14,000 per sq yd. will comprise 71 apartments. According to Hoysala, Kochi has transformed over time from PRESITGE UNVEILS SUNNYSIDE IN CITY a laidback settlement to a bustling IT, business Deccan Herald and tourism hub for the state of Kerala. The Lulu Shopping Centre and the Oberon Mall are within Prestige Group has launched their latest a 3 km distance, making entertainment an residential development, Prestige Sunnyside, off anytime affair. The Amrita Institute of Medical Sarjapur - Marthahalli Ring Road, behind Cisco Science is at a 4 km distance for any medical campus. Situated just off city’s IT corridor and needs, round-the-clock. Also, the airport-seaport spread over 7.50 acre, it presents exclusive two, road is just 3.5 km away, Hoysala said. This 11- three and four bedroom apartments in 2 blocks, floor Royal Heights will have a majority of 2- Oak and Elm ranging from 1311 sq ft to 2439 sq bedroom apartments laid out from the first to the ft. It offers choice of two, three and four bedroom tenth floor. As one goes higher, the 2-bedroom apartments across three towers. Prestige Group apartments will range in size from 840-1,273 sq executive director of Corporate Communications ft. The size of a 3-bedroom apartment will be Uzma Irfan said with increase in 'floating 1,580 sq ft. Price per sq ft is fixed at Rs 3,000. population', Bangalore today is Asia’s fastest growing city. PRESTIGE LAUNCHES LUXURY APARTMENTS OF ‘EDWARDIAN’ ERA HIRANANDANI LAUNCHES RODAS Financial Chronicle ENCLAVE IN THANE Financial Chronicle The Prestige Group has launched Prestige Edwardian, a luxury apartment project in the Mumbai-based Hiranandani Developers recently heart of the city, on Edward Road, about 2 km launched a luxury residential project in Thane (a from MG Road. The project, which will be suburb of Mumbai) called Rodas Enclave. The spread across 40,000 sq ft, as the name project has 18 buildings of 18, 24, and 28 floors, ‘Edwardian’ suggests will be designed using the with lavish 2, 2.5, 3, 4 and 5 BHK apartments, a Edwardian style of architecture. floating clubhouse, a magnificent green zone, avenues of recreation and entertainment all of MARATHON UNVEILS TOWNSHIP these perched on an elevated podium. The The Hindu Business Line property price ranges between Rs 7,000-8,000 per sq ft. Marathon Realty, the real estate arm of Mumbai- based Marathon Group, has launched Marathon HOYSALA PROJECTS OFFERS ROYAL Nagari-NX, a 500-apartment township, at HEIGHTS IN KOCHI Badlapur, near here. The units come in a Financial Chronicle configuration of one and two bedroom hall kitchen on six acres in the range of Rs 15-20 Bangalore-based Hoysala Projects recently lakh. Marathon will provide a decorative launched a new project — Royal Heights —in entrance lobby, children's playground,

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landscaped gardens and internal roads. Mayur Shah, managing director, Marathon Group, said, “With the kind of amenities and facilities, the project is intended at providing quality lifestyle at affordable prices to prospective buyers who generally come from the middle class.”

S&S GREEN LAUNCHES GREEN GRACE IN HYDERABAD Financial Chronicle

With awareness for energy conservation increasing, more and more real estate companies are now looking at building green homes. Hyderabad-based S&S Green Projects is now coming up with a platinum pre-certified green project, Green Grace, near Gachibowli, in the proximity of Outer Ring Road. The Rs 220 crore project, coming up on six acres, will be completed in three phases. The first phase, which has 150 apartments, will be ready by December this year. Phase B will be completed by August 2012 and phase C will be ready by August 2013. All together, Green Grace will have 416 apartments. The company is looking at HNIs to market the apartments. Each apartment, which will vary from 2,160-2,870 sq ft in size and will be priced upwards of Rs 80 lakh. The company is quoting Rs 3,600 per sq ft as the base price for the apartments.

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About Avendus Capital

Avendus Capital is a leading financial services firm which provides customised solutions in the areas of financial advisory, equity capital markets and wealth management. The firm relies on its extensive track record, in-depth domain understanding and knowledge of the economic and regulatory environment, to offer research based solutions to its clients that include institutional investors, corporates and high net worth families. Avendus Capital has consistently been ranked among the top-five corporate finance advisors in India and has emerged as the advisor of choice for cross-border M&A deals and has closed 35 cross-border transactions in the past 4 years. Avendus Securities through its Institutional Equities practice is able to offer clients best-in-class research-driven advice to help them take investment decisions, while Avendus PE Investment Advisors manages funds raised from its investors by investing in public markets and private equity. Headquartered in Mumbai, the firm has offices in New Delhi and Bangalore. Avendus Capital, Inc (US) and Avendus Capital (UK) Pvt. Ltd. located in New York and London respectively are wholly owned subsidiaries offering M&A and Private Equity syndication services to clients in the respective regions. For more information, please visit www.avendus.com

CONTACT DETAILS

Chirag Bagai | +91 22 6648 0977 | [email protected]

Seema Rao | +91 22 6648 0963 | [email protected]

Ajay Kumar | +91 22 6648 0964 | [email protected]

OUR OFFICES

Avendus Capital Pvt. Ltd. Mumbai: IL&FS Financial Centre, 5th Floor, Bandra-Kurla Complex, Bandra (East), Mumbai 400 051 Tel: +91 22 6648 0050 New Delhi: Suite 22A/B, The Aman Resort, Lodhi Road, New Delhi - 110003, Tel: +91 11 45357500 Bangalore: The Millenia Tower, A-10th Floor, No. 1 & 2 Murphy Road, Ulsoor, Bangalore 560 008 Tel: +91 80 6648 3600 Avendus Capital, Inc New York: 100 Park Avenue, 16th Floor, New York 10017, Tel: +1 212 351 5066 Avendus Capital (UK) Pvt. Ltd. London: 33, St James's Square, London SW1Y 4JS, Tel: +44 20 3159 4353 (Avendus Capital (UK) Private Limited is authorized and regulated by the FSA)

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