Sunday, November 19, 2017

Table of Contents for Ticker Tapes





Ticker Tapes

INDIAN PROPERTY MARKETS CRASH

India’s housing sector hit a new low during the April-June quarter with just 20,000 launches across the top seven cities of the country, down 23 per cent compared to the same period last year, according to the estimates released by Anarock Property Consultants. Cities include Mumbai, Pune, Bengaluru, Chennai, Delhi, NCR and Kolkata. This is also the sixth consecutive quarter when sales outpaced unit launches. Fewer new launches also saw a corresponding decline in unsold inventory with the number of unsold residential units falling to 4.2 lakh homes after a period of 30 months. Inventory levels may decline further as developers rush to register projects under RERA, which has further delivered a blow since it deters companies from raising fund through a pre-sale process and mandates registration of such projects on the RERA website before commencing sales.

According to Cushman & Wakefield, Developers need to make intrinsic changes to their business structure, operations and marketing strategies to comply with RERA norms. Interestingly, during H1 of 2017, about 58 per cent new launches were in mid-end segment, whereas luxury and high-end properties represented only 17 per cent and 25 per cent share, respectively, in the total new launches.

After RERA, new launches will reduce by 25 per cent to 30 per cent during latter half of the year owing to registration requirements, Colliers International has said. A Knight Frank report states, “The baggage of unsold inventory was stilted mainly in the under-construction category. However, now ready for possession apartments are also available across markets.

 

REALTY ATTRACTS Rs.16,000 CR IN H1

Real estate sector witnessed an investment of over Rs.16,000 crore in the first half of 2017, of which 56 per cent was in housing and township projects, according to property consultant JLL India. The investment figures include both debt and equity. In 1H, 2017, residential projects (including townships) across India attracted 56 per cent of the total investment – more than Rs.9,000 crore out of the total Rs.16,008 crore. IT and commercial projects received 22 per cent of the total investment at Rs.3,500 crore, followed by warehousing at 20 per cent of the total investment.

 

INDIAN HOTELS’ CAPEX PLANS

Indian Hotels Company has assigned a capex of Rs.3,000 crore for the next five years, of which Rs.300 crore has been allocated for next year. With plans for 21 new properties between the Taj and Ginger brand of hotels, the hospitality giant is also raising a Rs.1,500- crore Rights Issue to reduce its debt levels and use the proceeds for refurbishing and developing new and existing properties. Indian Hotels is looking to monetize its Sea Rock property in North Mumbai embroiled in a legal dispute. Few more clearances are required for Sea Rock and the next one is going to be environmental clearance for the property, according to the company. In the overseas market, Indian Hotels exited by selling Taj Boston at a loss of Rs.103 crore, but continued with the brand through a management contract. It also exited its investments made overseas in properties like the Orient Express at a loss. However, it has decided to continue with the Taj brand in places like New York (Pierre), San Francisco, and London (St. James Court).

 

SUNREF’S €112-MILLION GREEN HOUSING BOOST

The National Housing Bank (NHB) has joined hands with French Development Agency (FDA) and the European Union, to launch the SUNREF Housing India aimed at scaling up green housing projects in India. SUNREF (Sustainable Use of Natural Resources and Energy Finance) Housing India will provide financing of €112 million to NHB, through a credit line of € 100 million with AFD and a grant of €12 million financed by the European Union. The three partners presented details of SUNREF Housing India Programme to housing sector stakeholders in the presence of Alexandra Ziegler, Ambassador of France to India, and Tomasz Kozlowski, Ambassador of the European Union to India. Five years ago, NHB had tied up with Germany’s KfW for €50-million funding. The €100-million credit line will be available for a three-year time-period that began from July 2017. NHB hopes to do the disbursal between mid-2018 and 2020. Considering that Indian housing sector where 70 per cent of dwelling units are to be built till 2030, SUNREF project aims to reduce negative impact on environment.

 

SP TO LAUNCH 6 PROJECTS IN 2017-18

Diversified Shapoorji Pallonji Group’s (SP) real estate arm is lining up at least six projects across India during 2017-18, with two in the affordable housing segment. It plans to launch at least six projects this financial year. Of the six, 2-3 projects are being planned to come up in the Megapolis, two in Pune, and one in the National Capital Region (NCR), the company already has 40 million sq ft land bank across the country. SP will be launching an affordable housing project in Virar by September-October. The second project under the Joyville brand at Hinjewadi in Pune will be launched by March 2018. The SP Group had entered the affordable housing segment last year along with Standard Chartered Private Equity, International Finance Corporation (IFC), an arm of the World Bank, and the Asian Development Bank (ADB). Under the agreement, the partnership will invest about $250 million, which will be used primarily for buying land and setting up initial infrastructure. The company launched its first project under the brand Joyville at Howrah near Kolkata.

 

ASK TO INVEST Rs.1,000 CR IN HOUSING

Financial services firm ASK Group will invest over Rs.1,000 crore as private equity in housing projects this fiscal, despite demand slowdown and uncertainty in the market after the new realty law RERA came into effect. ASK Group is planning to invest over Rs.1,000 crore as equity investment in the mid—segment and affordable housing segment in 2017—18. ASK Property Investment Advisors is a venture of the ask group set up to manage and advise real estate dedicated funds. It mainly invests in housing projects in six major cities— Delhi—NCR, Mumbai, Pune, Bengaluru, Chennai and Hyderabad. This year in May, ASK Group invested Rs.200 crore in ATS Infrastructure’s mixed use development project ‘Knight Bridge’ in Noida. The Group has so far invested Rs.3,000 crore in the real estate projects in last 6—7 years and made an exit of worth Rs.1,000 crore with a healthy return on investment of 18—30 per cent at project level.

 

ITC’S MEGAPLANS

Diversified firm ITC IS planning 40 new hotels, adding around 5,000 rooms over a period of time to strengthen its hospitality business. ITC is currently busy on a long term plans to open 10 new hotels next three and half years under its ongoing expansion programme across different verticals, entailing overall investment of Rs.25,000 crore.

ITC’s hospitality chain has nearly 100 properties under four brands—ITC Hotels, WelcomHotel, Fortune and WelcomHeritage—across 70 locations with around 9,000 rooms.

In the near-term ITC has 10 new hotels in various stages of construction, of which nine are in India and one in Sri Lanka, in line with ITC’s ‘India first’ strategy.

 

SAILING ON THE NARMADA

Steel Authority of India (SAIL) has supplied 80 per cent steel required to construct Sardar Sarovar Project, recently inaugurated by PM Modi. SAIL supplied around 85,000 tonnes of steel (TMT) for the entire Sardar Sarovar Narmada Nigam Ltd (SSNNL) project, comprising all canals throughout Gujarat connected to Narmada river and the dam. Sardar Sarovar is the second largest concrete gravity dam (by volume) and has the world's third largest spillway discharging capacity. The dam will benefit four states — Gujarat, Madhya Pradesh, Maharashtra and Rajasthan. The dam is part of a large hydraulic engineering project, involving construction of series of large irrigation and hydroelectric multi-purpose dams on the Narmada river. One of the 30 dams planned on river Narmada, Sardar Sarovar Dam (SSD) is the largest structure to be built. It will irrigate over 18,000 m2 (190,000 sq ft), mostly in drought prone areas of Kutch and Saurashtra. The total installed capacity of the power facilities is 1,450 MW, SAIL said.

 

LEONI RAMPS UP FOR ‘MAKE IN INDIA’

Leoni, the leading European provider of cables and cable systems to the automotive sector and other industries, has ramped up its manufacturing facility located at Chakan, Pune. As part of its ‘Make in India’ campaign, the company recently inaugurated an electron beam accelerator at its factory to manufacture high performance cables for various industries like railway or solar. Leoni has invested over EUR 10 million for expanding its Pune facility. Now, the combined production area has increased to over 20,000 square meters and a capacity to manufacture 80,000 kilometers per year of electron beam cross linked cables, which ensure a higher degree of safety, superior performance, and greater efficiency. The Pune facility will drive synergies and economies of scale for Leoni’s domestic operations and for exports.




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