Bihar mulls 'private land bank' to woo investors

It will ensure hassle-free availability of land to industrialists looking to set up units in the state

The Bihar government will help set up a "private land bank" to ensure hassle-free availability of plots to industrialists looking to set up units in the state.

"We are studying whether to develop the land bank as a private venture or in public-private partnership mode. The government will soon finalise it," Principal Secretary (Industry Department) CK Mishra said here.

While the state government will not directly purchase land, it will develop infrastructure around plots sold by willing farmers to investors, reports IANS.

It will also provide incentives for industrial units to be set up there. According to officials of the Industry Department, the government is facing problems in acquisition of land for setting up industries.

"The state has high population density and most of the land available is used for farming," an official explained. Chief Minister Nitish Kumar had earlier said Bihar will adopted a new model for acquisition of land for industry and other ventures of public good, where it would act merely as a link between investors and landowners.

"The government will not directly acquire land. Instead, the government would work as a link between investors and landowners," Mishra said.

ArthVeda Scripting Seven Real Estate & Infra Funds, Eyes $2B AUM

Ropes in Lokanathan Nadar from Wadhawan Group to lead the infrastructure vertical.

ArthVeda  Fund Management has set the process rolling for four private equity funds in the real estate and infrastructure domain and is eyeing a total of seven funds with assets under management of around $2 billion by 2015, a top company executive told VCCircle.

ArthVeda  is a fund management company backed by private housing finance firm Dewan Housing Finance Ltd.

The plan appears bullish given the current fund raising climate. However, expectations of softening interest rates could help boost demand for residential housing. Even as overall economic slowdown has cast a doubt on prospects for commercial and retail property, the fund house could be betting on a bounce back in demand with interest rates peaking out.

Out of the seven funds in the planning stage, five is already on the table. These include two separate funds focused on low income housing projects besides a middle income housing fund , an asset class agnostic offshore fund besides an infrastructure fund.

Bikram Sen, chief executive officer of ArthVeda said, “In the next three years we will have asset under management of Rs 10,000 crore.”

The firm is in the final stages of planning to launch the two funds targeted at low income group housing projects. The first of these funds will be launched next month with a targeted corpus of Rs 250 crore. The fund will be raised in collaboration with Aadhar Housing Finance Ltd, the low income housing finance arm of Dewan Housing Finance. Aadhar was formed in partnership with IFC, the private investment arm of the World Bank, in February last year. The first fund will stay invested for a short term period of three years.

The second fund focused on low income housing will be a long term fund with a target size of Rs 500-750 crore. The fund raising for the second fund will happen in 2012-13.

Next month ArthVeda is also planning to launch a small offshore fund which will be open for investment in every asset class of realty sector, said Sen.

This comes after it recently launched a Rs 300 crore real estate fund, called ArthVeda Star Fund including a green shoe option of Rs 100 crore. The fund is focused towards green field projects in the middle income housing segment.

Sen said, “Around 75 per cent of the corpus of ArthVeda Star Fund will be invested in tier II and III cities and in suburbs of metros and for the rest we have flexibility but it will be dedicated to middle income housing projects only.”

He added, this fund will invest Rs 5 crore-25 crore in each project and around 34 investments will be made from this fund.  It will invest from the early stage as it is a purely greenfield focused fund and will exit the projects in three years or maximum four years.

According to Sen, ArthVeda Star Fund will manage to raise Rs 100-140 crore by the end of this month and it expects a final closure by March-April this year. Around 40 per cent of the fund’s capital is expected to come from institutions, banks, insurance trusts and rest from high net worth individuals. DHFL, the parent company will come in as an anchor investor. The fund is aiming at a gross return before expenses of more than 30 per cent.

Leveraging its parent, DHFL’s housing finance clientele in these markets, the fund has earmarked 16 cities across the country for its investments. It has already vetted and signed Memorandum of Understanding (MoU) for close to 16 projects. DHFL is tying up with a bank to provide construction finance to the developer where ArthaVeda Star Fund will invest.

Lokanathan Nadar To Head Infrastructure Vertical:

The fund house has also announced today the appointment of Lokanathan Nadar to lead the infrastructure vertical.

Nadar joins ArthVeda from Wadhawan Group, where he was CEO - Infrastructure & SEZ, where he was heading both the development of Pavana Multi Product SEZ and other Infrastructure initiatives of the group. He comes with almost 15 years of experience in the core infrastructure sector in the areas of project development & construction, conceptualization, business development, marketing and identification of new business opportunities.

“ArthVeda’s growth strategy is built around a number of verticals; we are already managing funds in the real estate vertical. With Mr Nadar joining the management of ArthVeda the company is opening up its infrastructure vertical. His wide and all round experience and in-depth knowledge of the core infrastructure sector will help us launch a series of specialized infrastructure funds,” said Bikram Sen.

Before Wadhawan Group, Nadar has worked with Sterling SEZ & Infrastructure Ltd as COO and prior to that he worked with IL&FS. Source: VCCircle

Kotak Realty Fund Invests $16M In Orris' Gurgaon Residential Project

The transaction involved issue of optionally convertible cumulative preference shares to Kotak Realty Fund.

Kotak Realty Fund has invested Rs 80 crore($16.3 million) in  Orris Infrastructure’s group housing project in Gurgaon(Haryana), a top company executive told VCCircle. The latest deal adds to the list of such residential projects in the northern belt of the country to have attracted interest from private equity funds.

A senior executive of Kotal Realty Fund privy to the deal said the investment is for the project called Orris Carnation, which is already under implementation at sector-85 in Gurgaon. “We have invested from our domestic real estate fund,” he said.

The group housing project is spread across 29 acres with a near completed residential apartment called Orris Carnation Residency. The transaction involved issue of optionally convertible cumulative preference shares or OCCPS to the realty fund.

International property consultancy Cushman and Wakefield advised Orris Infrastructure whereas Kotak Realty Fund managed the deal on its own.

Orris Infrastructure is a Gurgaon-based realty company which is owned by Vijay Gupta and apart from real estate it has interests in energy, hospitality and education.

The group has also formed a joint venture with the country’s largest property developer by market value, DLF Ltd called DLF-Orris where it will develop a 50 acre land parcel in Sector 88, Gurgaon for a commercial office space.  According to the company, it has a land bank of 1,000 acres with an estimated valuation of Rs 2,500 crore.

Kotak Realty Fund at present has assets under management of $850 million and it has fully deployed its first fund of $100 million called Kotak India Real Estate Fund I.  It has recently raised a domestic fund of Rs 523 crore.

In another deal in the same space, Sun-Apollo Real Estate Fund invested Rs 75 crore to acquire 50  per cent stake in Assotech Ltd’s group housing project spread across 12 acres in Sector -99 in Gurgaon. Few months back, India Property Fund had picked up 49 per cent stake in Ramprastha Group's housing project Skyz in sector 37D in Gurgaon for Rs 120 crore.

These PE deals comes at a time when bank funding has become costlier for developers but residential segment of real estate looks attractive for investment as the rate of interest is now peaking out. Given high suppressed demand for residential units in the Delhi NCR area, investors are betting on uptick in consumer demand for housing as housing loan rates starts retreating from current highs.

Besides these small and mid-size PE deals, the real estate sector has also seen a few large size transactions in the past one year including Ascendas India Trust acquiring a portfolio of five buildings in Phoenix Infocity Pvt Ltd’s SEZ for Rs 855 crore. Kotak Realty Fund sold Peepul Tree Properties (an IT park in Goregaon) to Tata Realty and Infrastructure Ltd and Tata Realty Initiatives Fund 1 for Rs 525 crore. Blackstone invested around Rs 875 crore to buy 37 per cent stake in Manyata Promoters Pvt Ltd and more recently the PE giant also struck another large deal where it acquired Pune SEZ of DLF and Hubtown for Rs 810 crore. Source: VCCircle

Budget 2012: Real estate sector remains optimistic and looks forward to reforms

While the 2011-12 budget offered a mixed bag to the realty sector, developers believe that very little was extended to them and customers and not enough steps were taken to improve the significance of the housing sector.

“Even today the Indian real estate sector has been facing its problems like slowing economy, delay in decision-making process, and hike in interest rates,” says Dhaval Ajmera, Director of Ajmera Realty & Infra India.

However, the real estate industry remains optimistic and looks forward to some reforms in the coming budget. The real estate sector is primarily looking forward to the RBI’s intervention to control the inflation which has adversely affected the industry. A sheer relief could be by bringing in affordable housing.

“We expect revision in tax for affordable housing projects in order address the acute housing shortage in the country,” says Shailesh Sanghvi, Director, Sanghvi Group of Companies. Affordable housing should be considered important with priority lending given to banks who could in return offer concessional costs to keep the cost of tenements within the reach of common man.

“The budget should look forward to extending the existing benefit of Section 80 IB(10) of the IT Act for developing affordable housing as the country is still in a huge shortage of tenement, adds Ajmera.

Last year, a 1% interest rate rebate was provided for affordable housing costing between Rs 10-15 lakh. Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India is of the opinion that the scope of this rebate should be amplified and broadened to include a wider price band of budget housing so as to boost the flagging sentiments in the housing sector.

Additionally, Sanghvi is of the opinion that the interest subvention of 1% on home loans could be raised from Rs 20 lakh to 30 lakh due to increase in cost of raw materials and various taxes incurred during home buying. Additionally, allocating more funds to the Rajiv Gandhi Avaas Yojana will do well to the real estate sector.

The real estate industry is also hoping to get an industry status as the sector is a major driver for economic growth and generates countless jobs across its various verticals. As the second largest employer in the country contributing 5% to India’s GDP, Indian Realty deserves a preferred treatment to give a further boost to our economy. Industry status would help the sector to access debt lending at more competitive interest rates and lower collateral values.

“Granting the real estate sector an industry status should be acceded to in the forthcoming budget as this would enable it to have access to organised funds from banks and financial institutions. In addition to getting easier and cheaper finance, the industry status would bring in a much deserved discipline in this sector, especially when the government is giving priority to mass and affordable housing projects,” says Manju Yagnik, Vice-Chairperson of Nahar Group.

There is a severe shortage of finance and whatever finance is available is coming in at a huge rate which is fuelling the realty prices and also many a times makes developers scrap the launch of new projects. The real estate industry also expects the Finance Ministry to relax the norms on FDI and ECB, especially for township projects which will give developers source funds at a much reasonable cost.

“Relaxing norms for repatriation of FDI in real estate is the need of the hour. Currently, it is not possible for foreign investors to repatriate real estate investment proceeds for a period of three years, which is hampering investment flow into India. The market environment needs to be rendered more investment-friendly,” says Puri.

Meanwhile, an increase in infrastructure spending in urban areas with a view to unlock the value of neglected and hidden land assets in suburban and peripheral districts is expected.

“With growing urbanisation in metros, the real estate sector is seeing huge opportunity for creating newer townships. It is vital that the government promotes townships alongside industrial belts and give developers fiscal benefits to township development to entice developers in this segment, says Ajmera. Additionally, clear guidelines should be announced by government in order to avoid any kind of ambiguity on point of levying Service Tax on under construction projects.

Finally, Yagnik concludes that considering that nearly 35% of sale value of a home consists of various taxes such as excise, VAT, service tax, stamp duty among other things, “we hope that the Budget 2012-13 would bring about appropriate reductions in their tax rates, to the delight of home-buyers who are already burdened with high interest rate for housing loans”. Source: Economic Times

Integrated mixed use development in the heart of Mumbai

The Wadia Group, with its three centuries of legacy across multiple industry segments like ship building, aviation, foods, engineering and architectural consultancy services; has today announced its foray in to the real estate sector with the launch of Bombay Realty. The Group also announced the launch of Mumbai’s first fully integrated “Mixed Use” development, the Island City Center located in the heart of the island city of Mumbai.
 

The Island City Center will be built over 45 acres of groups landbank and it will consist of luxury residences, serviced apartments, offices, a 5-star hotel, a high street, a premium mall, and an international school. All this and over 8 acres of open green landscape.

Commenting on the launch, Mr. Jeh Wadia, Managing Director, Bombay Realty, said: “For over centuries the Wadia Group has prided on its excellence and spirit of entrepreneurship. The Wadia Group has many successful ventures such as Bombay Dyeing, Britannia, Gherzi Eastern and Go Air built on these values. The Group has accomplished landmark projects across residences, offices, hospitality, retail, industrial and even townships across India. Bombay Realty our newest venture will consolidate the groups land bank of over 10,000 acres and develop the same in a progressive manner.”

Mr Manish Agrawal, Vice President, Marketing added: “Bombay Realty will play the role of developer for the Wadia Group which has a land bank of more than 10000 acres. The Group has close to 700 acres around the city of Mumbai, and 70 acres in the Island city. With the launch of Mixed Use project ‘The Island City Center’ we are offering a lifestyle that provides the ability to live, work, play, all at one place. The Island City Center aims to provide a better quality of life to its residents, by saving them a couple of hours of commute every day, which they can then spend with their family and friends.”

“At The Island City Center, we don’t sell property, we will be selling time; and with it, a better life” says Mr Jeh Wadia. This city within a city, is a gated community and promises its own private roads, an unparalleled security with a world class infrastructure.”
 

The project has been launched at a time when Jones Lang LaSalle in their 2012 forecast for the Mumbai real estate market has said that, “Mumbai will underscore its status as a relatively safe haven for Indian core real estate. HNI investors will re-enter the market in a big way, and the increased HNI investment volumes are likely to put pressure on core cap rate”
 

Luxury Residences at Island City Center – ONE ICC & TWO ICC
Bombay Realty has launched two iconic towers in Mumbai – ONE ICC & TWO ICC. These two magnificent residential towers will offer every comfort and convenience to its discerning residents.

With exacting standards and careful attention to the minutest detail, these residences will epitomize extraordinary grandeur – with air-conditioned lifts and lift lobbies, reception areas, unique state-of-the-art safety & security systems (such as jet fans in the basement and smart cards for restricted entry) and use of cutting-edge technology (be it the jump-form technology, the use of post-tension slabs, or the multiple high-speed elevators to ensure reduced waiting time). Picture windows, spectacular views, grand entry-foyers, modern imported modular kitchens, stylish bathrooms and elegantly designed rooms are the other salient features.

For the over indulgent, ONE ICC & TWO ICC will provide access to every conceivable privilege and still have the time for more. Whether it’s the Golf putting green, air-conditioned squash courts, games rooms, kids play area, library, cricket nets, the barbecue pits, the concierge & travel desk or the multiple swimming pools – for any occasion, there’s everything one could have asked for and a little bit of what one couldn’t have begun to imagine.
 

Philanthropy

While the Wadia Group epitomizes the spirit of entrepreneurship, philanthropy is at the core of everything the Group does – 33 acres of affordable housing (Nowroz Baug in Lalbaug, Rustom Baug and Jer Baug in Byculla, Cusrow Baug in Colaba), 8 acres of accessible healthcare (Nowrosjee Wadia Maternity Hospital) and Jerbai Wadia Children’s Hospital in Mumbai). Besides, the Group has built several education institutes in Pune (Nowrosjee Wadia College of Arts & Science, Cusrow Wadia Institute of Technology, Ness Wadia College of Commerce, Neville Wadia Institute of Management and Research and M.E. Society’s College of Engineering).
 

Past Real Estate ventures

The Group, through its arm Gherzi Eastern, has been associated with various premium residences in Mumbai (Springs, Samudra Mahal, Beach Towers, Twin Towers and Naperol Towers), offices(C1 & C2, Wadia International Center), townships across India (Integrated IT-SEZ in Tamil Nadu, Doyang in Nagaland, Cinnamara Township in Assam, Integrated Textile Park in Bhopal), multi-star hotels (Grand Hyatt and Grand Intercontinental in Mumbai, Goa Renaissance, Hyatt Regency in Delhi, Taj Krishna in Hyderabad and Yak & Yeti Hotel in Nepal), retail projects (Central Mall and IMAX Multiplex in Vadodara, Fame Adlabs and Fame Multiplex in Mumbai, IMAX Multiplex in Hyderabad, Natraj Multiplex and Satyam Cineplex in Delhi) and several industrial projects (Alok Industries and Welspun in Vapi, Moser Baer in Noida, Spentex Industries in Baramati and Whirlpool in Pune). Source: Money Control