Indian Government to relax SEZ policy soon
Image via WikipediaWith the Left parties out of its way, the UPA government is likely to relax the SEZ policy and may consider the demand from developers for raising the land ceiling of 5,000 hectares.
The empowered Group of Ministers (eGoM), headed by External Affairs Minister Pranab Mukherjee is scheduled to meet tomorrow for clearing long-pending grey areas in the SEZ policy backed by a legislation.
The issues expected to be taken up by the ministers’ panel include demand from developers to revise the 5,000 hectare land ceiling for a SEZ. It would also provide clarification on the definition of what constitutes a ‘vacant land’ for the purpose of using it for SEZ units.
India’s Retail Malls Empty – Slash rentals – Convert to Offices
Image via WikipediaMall mania seems to be fading. With inflation cautioning consumers, retailers, too, are watching their step.
While previously it was a mall-owner’s market — with the mall demanding fixed, steep rents, the market has now turned around with malls pitching lower rentals to woo retailers.
“Despite lack of quality space in the market, the top eight cities in India are currently witnessing around 18% vacancy across the 40 mn sq ft of operational malls. This is because most of the supply has come within the same micro-markets targeting the same catchments, creating an oversupply,” says Rajneesh Mahajan, director of retail services at real estate consultancy firm Cushman & Wakefield.
This has had two major implications — malls have slashed rentals or are converting their projects into office projects.
FDI in Indian real estate to increase by 21 billion dollars
Image via WikipediaThe FDI in real estate will increase by $21 billion to touch $25 billion in next 10 years, said Assocham.
Assocham said that its forecast is based on the fact that real estate in India would be a hot market.
It said that investors are constantly looking at India to park their surpluses as returns on such investments would be the highest in near future.
At present, the domestic real estate market is expected to be of $15 billion in which the foreign direct investment contributions is estimated around less than $4 billion.
The bank credit to this sector by end of 2007-08 has been estimated over Rs 3,50,000 crore which will multiply substantially in the coming years in view of the growth that the sector is expected to register, adds the Assocham analysis.
JPMorgan to invest a billion dollar plus in Asian real estate
Image via WikipediaJPMorgan plans to invest more than $1 billion in Asian real estate over the next three years, hoping to fill a gap as Indian and Chinese developers crave funds and lenders and rival investors recoil from property markets.
The investment bank, which has fared better than some Wall Street rivals because of smaller exposure to subprime mortgage investments, is using its global special opportunities group to finance Asian property firms and their projects.
“It’s a fantastic opportunity for us at a time when a lot of our competitors are scaling down because of difficulties accessing their balance sheet,” the group’s Asia real estate head, Bryan Southergill, told Reuters in an interview.
“In the next three years we aim to invest north of a billion dollars in this part of the world, if market conditions allow,” Southergill said.
Indian Realty developers gunning for Rs. 40 to 60 lakh range homes
Hit by slowing demand for upscale housing as financing costs touch the highest level in seven years, realty developers are building homes in the Rs40 lakh-Rs60 lakh range to tap higher consumer demand in that price bracket.
Property firms are reducing the sticker price on flats by building low-rise (up to three floors high) blocks and reducing the floor area in each unit.
Last month, Unitech Ltd, India’s second largest listed developer, launched flats in that price range at its 320-acre luxury residential township, Nirvana Country, in Sector 50 of Gurgaon, near New Delhi. The township was initially planned for building villas, high-rise apartments and developing individual plots.
The newly launched section called Woodstock Floors offers two- and three-bedroom flats. The launch followed waning demand for villas costing between Rs1.2 crore and Rs3 crore. “But there is strong demand from buyers in Gurgaon for products priced in the Rs40-75 lakh range,” Sanjay Chandra, managing director of Unitech, said last week after the firm announced its results for the April-June quarter.
Foreign VCs reduce Indian real estate investments
Venture Capital Funds (VCFs) and Foreign Venture Capital Investors (FVCI) have reduced their investment in real estate companies during the June-2008 quarter. However, the overall investment by VCFs and FVCI rose a modest 2.2 per cent to Rs 32,379 crore against March quarter figure of Rs 31,682 crore, according to a latest data available with SEBI.
The report has been compiled on the basis of quarterly information submitted to SEBI by registered VCFs and FVCIs.
While flows into real estate fell nearly 14 per cent to Rs 6,286 crore from March end quarter figure of Rs 7,285 crore; the other sector that took a hit was biotechnology, where their investment slipped to Rs 346 crore from Rs 385 crore.
However, media, Industrial and services sectors witnessed growth in inflow from VCFs and FVCI.
Future Group Kolkata Hotel on Eastern Paper Mill property
Kishore Biyani-promoted Future Capital Holdings has identified the Eastern Paper Mill property in Kolkata for its hotel. The company has signed a deal for mixed-use development on the 5 lakh sq ft plot.
Earlier, Financial Chronicle had reported that Future Capital’s Hotel Fund is close to signing a deal to start its hotel in Kolkata and Thiruvananthapuram. Besides these two cities, the talks are also on in cities such as Bangalore, Hyderabad, Mysore, Mumbai, Chennai, Bhubaneswar, Ahmedabad and Pune.
A property consultant involved in the deal said the market value of Eastern Paper Mill plot on Kolkata’s VIP Road could be around Rs 70-100 crore.”They plan to develop a hotel, mall and commercial place in this property,” said the official.
“This is part of their initiative to leverage their existing property,” he said. FCH Hotel Fund is in the process of tying up a master management contract with a leading international business brand to manage the business hotel portfolio.
More at Source
Dow Jones India Titans 30 Index launched
An index of 30 leading Indian company stocks, Dow Jones India Titans 30 Index, was launched today (4 August 2008) by Mr Rupert Murdoch, the Chairman of media conglomerate News Corporation.
“The Dow Jones India Titans 30 Index includes 30 largest and most liquid stocks traded in India. The selection to the index will be based on rankings by float-adjusted market capitalisation and 12 month average daily trading volume,” the media company said.
The index will track share prices of leading players across various business segments incorporated on the index and will be a basis for investment. Calculated in US dollar and Indian rupee, it will be reviewed every March.
The index has been created by financial information company Dow Jones Indexes, a business unit of Dow Jones & Company, a News Corporation company.
Launching the index, Mr Murdoch said the blue-chip index for India will be licensed to financial institutions as the basis of investment products, such as exchange-traded funds.
Dirty secrets of low ‘China Price’
Made in China is a true-blue global term.From pitchkaris and colours used to play Holi in India to mobiles, PCs and laptops used the world over, everything seems to be Made in China.
How did China become the factory of the world?
The answer is obvious: China produces goods at such a low cost that no country can seem to compete with it.
Given that, ‘profit-hungry’ corporations across the world find it logical to outsource their production to China.
Which begs the question, how do factories in China produce at such a low cost?
Is access to cheap labour the only answer?
There are some ‘five-star’ factories behind the story, says Alexandra Harney, former journalist with The Financial Times, London, may have found the secret to ‘The China Price’.
ITC inaugurates ‘e-choupal’ retail network
Diversified business player ITC today announced the expansion of the company’s rural retail service ‘e-choupal’ network to Tamil Nadu with the launch of the first store at Sivganga.
The e-choupal network would provide agri-extension services to empower farmers through increased productivity of crops like paddy, ITC said in a statement.
“ITC’s proven expertise in the agri-sector will now be available to the poorest of farmers in the state and give them an opportunity to leverage the power of information technology and also benefit from high quality extension services,” ITC Chairman Y C Deveshwar said.
The company said that e-choupal would also specifically address the challenges faced by farmers in the predominantly dry areas of the state and improve yields and quality of crops.
Uppal developing 7 Luxury Hotels by 2010
Expanding its business in the hospitality sector, real estate firm Uppal Group plans to develop seven luxury hotels by 2010, adding about 1,400 rooms across the country.
The group today tied up with global hospitality major Marriott for developing and managing two five-star hotels, each in Gurgaon and Chandigarh, entailing a total investment of over Rs 500 crore.
“We have tied up with Marriott for two five-star hotels, which will be ready by next year. We plan to develop another five luxury hotels by 2010, with an addition of about 1,000 rooms,” Uppal Group Managing Director Manish Uppal said here.
Uppal is currently running a hotel in Gurgaon under the brand – Uppal’s Orchid.
More at Source
Essar for Nagpur five-star hotel for 500 crores
Essar Realty Holdings—the real estate arm of the Essar Group—has won the bid for building a Rs 500-crore five-star hotel, utility centre and a multiplex at the upcoming Multimodal International Hub Airport in Nagpur.
The realty firm has also formed a joint venture with the US-based hospitality group Accor Hospitality to develop and manage the hotel project.
Indian developers hire foreign architect firms
In their bid to score over their rivals , many developers are now going abroad to hire noted architects who can design their new projects . Not withstanding the fact that currently the realty sector is seeing downward trend, still some of the noted design companies from other countries are opening their Indian offices to cater the real estate market .
The likes of Godrej Properties, Unitech, Omaxe, Hiranandani and many more are hiring foreign architect firms. As recently as last year, Godrej hired DP Architects of Singapore to design their 50-storey residential project in Mahalaxmi area of Mumbai. US-based Hellmuth Obata Kassabaum Inc (HOK), has already worked with Indian builders such as Unitech, Hiranandani and many other big firms. Will Roes, programme manager of HOK India says that they bring a global perspective and diverse expertise to a project.
It is true that hiring foreign designers and planners have many advantages . But, the negative side of hiring them is that in some cases they do not understand the complexities of doing business in India, including tax laws and also cultural consideration, feels Devinder Gupta of realty advisory Century 21 India .
In an interview, Niranjan Hiranandani , the managing director of the Hiranandani group says that there is a big difference in approach between Indian and foreign firms that undertake design jobs. He feels that international firms are more empathetic to developers’ needs and aspirations. ” They find a solution which is required for a particular site, location and land. They are also more in tune with the land use demand,” says Hiranandani. “They are more open to new ideas. On the other hand, Indian firms have a trial and error approach to design and planning. They also try to impose their ideas on the developers.”
One Laptop per Child India – OLPC India launches
Nicholas Negroponte has found it tough going in India. For years as the head of MIT’s Media Lab, the famed computer scientist promoted radical ways to use technology to transform society. His best-known idea is the One Laptop per Child (OLPC) program (BusinessWeek, 6/5/08), a plan to make a simple, $100 laptop that would create a digitally literate generation in the hardscrabble classrooms of emerging-market nations. The laptop, now dubbed the XO, is finally being mass-produced in China.
In 2001, the computer scientist came to India to promote the Media Lab, but failed to impress New Delhi. Negroponte clearly fell off the India map, when then-Information Technology Minister Arun Shourie dismissed his efforts as “pedagogically suspect” and wanted more accountability. When Negroponte’s nonprofit One Laptop per Child foundation approached the Indian government in 2006, his project was again rebuffed by India’s then-Education Secretary, Sudeep Banerjee.
Two years later, Negroponte is back to open a new office in New Delhi and launch the OLPC program in India on Aug. 4. Despite all the rebuffs, Negroponte’s urge to sell in India is stronger than ever. “India is the largest market for us, and I had to be here,” he says. More important, Negroponte has a new partner—one of India’s politically influential private-sector conglomerates. The Digital Bridge Foundation, part of Reliance ADA Group, owned by Indian billionaire Anil Ambani, is providing the technology backbone and logistics for the installation of OLPC’s white and green XO laptops in primary schools.
Fashion giants close Indian sourcing functions
Global apparel brands that are reeling under the impact of weak consumer sentiments worldwide are beginning to pull back their direct sourcing operations from India.
In recent weeks, fashion clothing giant Timberland closed down its India office and handed over sourcing functions to thirdparty management firm Li & Fung. Another American fashion icon Liz Claiborne is believed to be reviewing local sourcing operations as retailers go in for cost cutting to survive a market gloom, sources said. Liz Claiborne’s India sourcing, mainly centred around its Mexx brand, is estimated at $100 million. Timberland’s local sourcing was smaller at around $30 million annually.
Observers said sourcing becomes invariably the first casualty in the restructuring moves of most international fashion houses. UK retailer Next rejigged its local sourcing operations sometime back by pulling shutters on the Bangalore office, but has kept its India presence alive with a hub in New Delhi. The developments mark a reversal in India’s sourcing story that saw unprecedented boom in recent years. Several top deck and even relatively smaller fashion apparel and accessories retailers started direct sourcing from the country.
ITC taps Indian frozen food market
ITC Foods has drawn up plans to foray into the nascent frozen foods category in the domestic market within the next six-eight months. The company will extend its Kitchen of India brand to frozen foods, which would include meals packaged in trays and snacks.
ITC recently began exporting frozen vegetarian foods to markets such as the US and Canada, since exporting non-vegetarian foods out of India is restricted. The company is manufacturing the frozen foods range at its Bangalore facility, and will use the same to cater to the domestic market as well, ITC Foods CEO Ravi Naware told ET .
South India’s largest SEZ get Rs 17.5k crore funds
Sri City (Private) Ltd, promoted by an NRI and the chairman of BSE-listed Mega Soft Ravindra Sannareddy and his associates, is setting up south India’s largest notified multi-product SEZ (special economic zone) at Tada in Chittoor district of Andhra Pradesh, which is 55km away from Chennai with a clear focus on manufacturing and IT/ITeS/BPO sectors. The other equity partners of this mega SEZ include Andhra Pradesh Industrial Development Corporation (APIDC) (minority stakeholder), private equity funds and banks.
Developed with an initial investment of Rs 1,000 crore, the SEZ would come up in a sprawling 5,000 acres of land including domestic tariff area. “It is expected to attract initial investments of Rs 8,500 crore in first three phase of operations which will be increased to Rs 17,500 crore,” said Ravindra Sannareddy, chairman, Sri City. In addition to that, the SEZ is expected to attract Rs 10,000 crore investment through hospitals, hotels, resorts and other recreational facilities to be developed by private players. “This is the first major private-public development project,” he added.
Indiabulls power plant in Madhya Pradesh
Indiabulls Real Estate Ltd said on Wednesday its power services subsidiary has entered a memorandum of understanding with the government of Madhya Pradesh to set up a 2,640 megawatt power project.
Indiabulls Power Services Ltd will set up the project in two stages of 1,320 megawatt each in Madhya Pradesh, the company said in a statement.
Mantri Realty – 2,000-acre city at Gwalior to be developed
Mumbai-based developer Sunil Mantri Realty Ltd has signed a memorandum of understanding with the Special Area Development Authority (SADA) of Gwalior to develop a hi-tech city on 2,000 acres there.
The deal was inked at an ‘investors meet’ organised by the Madhya Pradesh Government.
Mantri will pay for the land, which the Gwalior authority will acquire for it, and the development would include 25,000 residential units under public-private-partnership.
Total investment would be around Rs 2,000 crore spread over 8-10 years.
Phase I of the project is scheduled to begin in 2008.
According to the agreement, the land acquisition will done by SADA in accordance with the ‘ready-reckoner’ and Mantri will offer a premium over and above it.
Mantri will make the actual land cost, plus the premium it offered to the authorities for disbursement to the land owners.
Mr Sunil Mantri, Chairman, Mantri Realty, said the cost of an acre would be in the range of Rs 50-60 lakh.
More at Source
RedFort Capital – 4,000 crores – 6 realty projects
Red Fort Capital, a private equity fund focused on real estate development, is in advance stages of negotiations with six developers for an equal number of projects worth Rs 4,000 crore in the metros across India.
The PE fund today joined hands with Godrej Properties to develop an IT park in Kolkata, where Red Fort Capital has picked up 49 per cent stake. The project, Godrej Genesis, is expected to generate sales of over Rs 750 crore.
“We are in the process of closing a number of transactions in the NCR, Mumbai and Bangalore. We are currently talking to six different developers in these cities,” Red Fort Capital Director Kuldip Chawlla told PTI.
Without divulging names of the possible builders, he said three of them are ‘big national developers’, while the rest are local players.
The company currently is evaluating one residential and one commercial project in each city, where the fund would pick up stake between 30 per cent and 80 per cent, he added.
Inflation – Good for Indian Retailers
Everyone loves a good discount. And it comes in as an incentive especially during times of inflation. For apparel discount retailers, inflation has proved to be a blessing. Arvind’s branded discount retail chain Megamart has seen an improvement in walk-ins of 15% in the past few weeks.
“During inflation, customers always prefer to shop in a value retail outlet,” says KE Venkatachalapathy, business head of Megamart. The increased footfall is reflecting in the sales figure of Megamart as well. While he refuses to divulge exact numbers, Venkatachalapathy says there has been a 20% increase in sales compared to the corresponding period last year. Discounts here vary from 10% to 30%.
“Inflation and discount retailing are directly proportional. Customers normally tend to flock to value retail stores where they are assured of good quality at reasonable prices,” says Raghunath Narayanan, MD of Chennai discount retailer Europa.
Spencer’s opening 300 outlets all over India
RPG Group company Spencer’s Retail has decided to close down at least 40 unviable outlets and open another 300 in the next 12 months. The company is also looking at developing the Old Mint building on Strand Road where it intends to put up a mall to begin with.
Talking to reporters on the sidelines of the 30th AGM of CESC, Sanjiv Goenka said: “At least 10% of our existing Spencer’s outlets are loss-making and we have decided to close them down. Currently, there are about 410 outlets nationally and the exact number of loss-making stores will be mapped and a decision on closing them down will be taken soon. Stores that have turned unprofitable are mainly due to very high rents, bad hinterland and poor sales. Parallely, we intend to open 300 new stores in the next 12 months.” Mr Goenka, however, declined to disclose details of locales which will see shutdown of outlets.
RBI hike hit real estate firms hard
Real estate companies see their cost of borrowing going up by one percentage point as the central bank has increased the repo rate by 0.5 per cent and cash reserve ratio by 0.25 per cent.
The rate hike will push up the corporate lending rates. This, in turn, is expected to further strain the balance sheets of realty companies, already reeling under a fund crunch in the wake of slower property sales, higher lending rates, rise in input costs and the central bank’s measures to check traditional sources of funding.
Future Group enters hotel business
Kishore Biyani promoted private equity firm, Future Capital Holdings (FCH), is finally stepping into the hospitality sector and is close to signing two separate deals with property owners in Kolkata and Thiruvananthapuram. FCH is also talking to a few international hotel chains for managing their hotels.
FCH’s hotels will have room capacities ranging between 125 and 200 and will typically be positioned as a 4-star category, design-led business hotels on standalone or mixed-use properties.
“The mandate to finalise prospective joint venture land owning partners has been given to a few property consultants across India,” said a property consultant. When contacted by Financial Chronicle, Shishir Baijal, managing director, Kshitij Investment Advisory, the firm that manages FCH funds, said, they are looking at a few land deals.
“But it will be too early to comment as to which locations we are trying to finalise,” he said.
More at Source
Bombay Dyeing – 100 news stores all over India and abroad
After opening up a premium store in Mumbai and one in Dubai, textile major, Bombay Dyeing, is planning to expand its retail store chain in a big way.
The company is planning to open 100 new stores in the next three years. The stores would come up within the country and abroad.
Bombay Dyeing, which has a few retail stores, had been going slow on the expansion due to high real estate rentals. But now the company wants to strengthen the brand value further by setting up more retail stores.
“We have some stores but due to high real estate rentals, it is very difficult to survive,” said Ness Wadia, joint managing director, Bombay Dyeing. “Still, to strengthen our brand, we are looking at increasing our retail presence.”
Timex TimeFactory – 38 new stores all over India
Timex Group India is focusing attention on the growth and expansion of its standalone stores, Time Factory, as it plans to open 38 new stores in the financial year and take the total number of Timex showrooms to 100.
“We would now open stores in tier-I and tier-II cities such as Lucknow, Baroda and Coimbatore. We are investing as much as Rs 15 crore in retailing and marketing for fiscal 2008 and 2009,” said Kapil Kapoor, Timex’s senior vice-president, Asia Pacific, and managing director.
Kapoor was speaking during the launch of the latest range of Timex watches called ‘Conversation Starters.” The event also featured a new advertisement campaign. The new Timex watc-hes are loaded with features such as a 30-city world time indicator and costs between Rs 3,000 and Rs 10,000.
India to get 24 Marriott luxury hotels by 2011
International hotel chain Marriott is planning to add 24 luxury hotels comprising about 7,000 rooms by 2011 in the country as it looks to tap the booming hospitality sector.
“The country’s hospitality sector has been growing very fast, mainly due to government’s encouragement for the tourism sector. To cash in on the growth story, we will be opening 24 new hotels across the country by 2011 with an addition of about 7,000 rooms,” Marriott International Regional Vice President (Hotel Development – Indian Subcontinent) Navjit Ahluwalia said.
Marriott would have 15 hotels by the the end of 2009, he added. The company has already tied up with different developers for the hotels in various locations and all the projects are under construction, he said.
Marriott has tied up with Unitech for four hotels, Emaar MGF for two, Uppal Group for two, Mumbai-based Rahejas for two and Kanakia Developers for one hotels, which would come up in various metros, Tier I and II cities, Ahluwalia said.
Real estate mutual funds (REMF) – Rejoice!
The cloud over real estate mutual funds (REMF) has lifted. The finance ministry has brushed aside RBI’s concerns of REMFs violating foreign direct investment (FDI) norms in the realty sector. North Block has said the central bank’s concern — stating that REMF scheme notified by Sebi in April contradicted FDI norms — was unwarranted.
The finance ministry view could pave way for the launch of new investment avenues for small investors keen to tap the real estate sector’s growth potential. The doubts raised by RBI added to the hesitation in REMF launches.
Highlighting that the scheme allowed NRIs and FIIs to invest in real estate sector in conflict with the policy, the apex bank had asked finance ministry to intervene and take up the issue with Sebi. The FDI policy prohibits investment in real estate but allows investment in construction and development sector with conditions like a three-year lock-in, minimum capitalisation of $5 million for a wholly-owned subsidiary and $10 million for joint ventures, and development of at least 10 hectares. The government had allowed 100% FDI in the construction and development sector on the automatic route in 2005 under the Press Note 2 issued that year.
Mahindra World City SEZ at Jaipur
Welcome to the Mahindra World City Jaipur. Even as several SEZs are struggling to get off the ground, the Mahindras have managed to kick off their second SEZ at Jaipur, after their first one in Chennai.
“None of the big SEZ projects has taken off while we have made good progress on two of them. The Jaipur project will be operational this month,” said Arun Nanda, vice-chairman, Mahindra Lifespaces.
Most other projects have not been able to cross the first hurdle of land acquisition. “The Mahindras believed in SEZs before they came into place in India. Others are sitting on approvals and now thinking about what to do with them,” said Tapan Singhal, senior manager, PricewaterhouseCoopers.
To be fair, many SEZs have come up in the country. But a majority of them are captive units of IT, ITes, or pharma companies. Many government free trade zones and export promotion zones have been converted into SEZs. There are about half a dozen third-party SEZs from developers like DLF and Unitech but they are much smaller in size and scale (40-60 acres).
Service Tax imposition – Indian Retailers unhappy
India’s decision to impose a 12% service tax on commercial rentals as part of the 2007-08 Union budget in early 2007 has been caught up in multiple lawsuits, mostly by retailers.
At least 30 cases have been filed by retailers in various courts. Among them are leading retailers including Pantaloon Retail (India) Ltd, Shoppers Stop Ltd and Lifestyle International.
“It’s an unconstitutional tax,” says Rishi Agrawala, a lawyer representing several retailers in multiple cases.
In addition to individual suits, a case had been filed in the Bombay high court by the Retailers Association of India, the Confederation of Real Estate Developers Association of India (CREDAI) and Multiplexes Association of India, challenging the imposition of the tax.
Inflation-hit Indian retailers renegotiate realty deals
The economic downturn and slump in mall sales have forced retail majors to renegotiate property deals. Retailers see a cost-savings opportunity on the back of a dip in commercial rentals and real estate prices across the country.
Big Bazaar, Trent, Shopper’s Stop and Wellspun among others are busy bargaining for fresh deals with property developers, say industry officials.
“These days, parties (retail companies and developers) sign multi-layered agreements, in which they even define leasing rate changes and rental renegotiations,” said Jidesh Kumar, managing partner at legal firm King Stubb & Kasiva.
“They (retail companies) in the recent past have begun invoking the renegotiation clause to get better deals due to slowdown in the economy.”
In the past two months, Jidesh’s firm worked on three such renegotiation deals but he declined to name them.
More at Source
Reliance Retail gets largest toyshop of the world to India
Reliance Retail has clinched a deal with the world’s largest toy shop, Hamleys. India’s largest private conglomerate will be the partner in one of the biggest international expansions by the 250-year-old Hamleys till date.
Sources said Hamleys and Reliance have struck a franchise deal to open large format stores. ET first reported on the discussions between the two players on March 21. Reliance Retail is believed to have pipped the Wadias and Kishore Biyani’s Future Group in snapping up the deal.
The Mukesh Ambani-led Reliance and the Icelandic investor Baugur Group-controlled Hamleys are expected to make a joint announcement shortly. Reliance had also explored an arrangement with the US chain Toys ‘R Us before deciding to strike a deal with Hamleys.
Royal Palms ties up with WorldHotels for Goregaon Hotel
Leading hospitality player Royal Palms has entered into a co-branding/marketing tie-up with the Germany-headquartered WorldHotels AG for its new 418-room Super Luxury Hotel coming up at Goregaon in North Mumbai.
The Palace Hotel & Towers, as it is to be called, becomes the only hotel in India to be a part of the WorldHotels and is slated to open by September 2008, a top company official said here on Sunday.
Established in 1970, WorldHotels is the largest Europe-based global group for individual and independent hotels as well as regional hotel brands.
WorldHotels manages over 500 hotels in more than 70 countries. In addition, it has 18 airline partners for offering frequent flyer benefits to its guests.
“Becoming a part of World Hotels is a major achievement for us, as also for India. The tie-up, which is under the deluxe category, wil position the Palace Hotel among global business tourists as an exclusive venue,” Royal Palms Estates Joint Managing Director Dilawar Nensey said.
Ambuja Realty – 3 hotels in West Bengal
City-based real estate developer Ambuja Realty Development Ltd will build three luxury hotels in northern West Bengal, the company’s top official has said.
Two of the hotels would be in Darjeeling district – at Makaibari in Kurseong and Siliguri – while the third would be near Gorumara forest in Jalpaiguri district, company chairman Harshavardhan Neotia said in an exclusive interview to IANS.
The company has already acquired land for these hotels, and the project details are being worked out, he said.
“These will be luxury hotels with 30-40 rooms to begin with,” Neotia said.
The projects would be funded through both debt and equity.
The company has not been able to start the construction work yet due to the political turmoil in Darjeeling and the adjoining areas in the recent past, he said.
“The hotel in Makaibari will be located in the middle of tea gardens and enhance tea tourism in Darjeeling,” he said.
Suncity developing 10 retail cities for 8000 crores
Aiming to cash in on the burgeoning organised retail segment, realty player Suncity Projects announced on Saturday a Rs 8,000 crore project to develop 10 retail cities across the country over the next six years.
“Initially, we will start with four cities in north India at an investment of Rs 2,000 crore. Gradually, it will be expanded to 10 cities in the country, which could entail an investment of about Rs 8,000 crore,” Suncity Projects Vice President (Retail) Vijay Arora told reporters in New Delhi.
Besides the retail area, these cities would also house hotels, office spaces and entertainment zones, he added. The first four of the retail cities, under the brand name ‘Jewel of India’ would come up at Greater Noida, Indore, Jaipur and Mohali.
Reliance Retail to buy OSRTC land
Reliance Retail, the retail business arm of Mukesh Ambani’s Reliance Industries Ltd (RIL), will take over three prime lands in Bhubaneswar, Cuttack and Baripada from Orissa State Road Transport Corp (OSRTC) on a 33-year lease basis for putting up retail complexes.
The company has agreed to shell out Rs 20 crore, besides a monthly rental of Rs 15 lakh, for using the land.
Pantaloon’s Brand Factory will now offer products from Planet M, Globus, Staples and Dollar stores.
Pantaloon Retail’s fashion value retail format, which opened its seventh outlet in the country and the second in Bangalore on Thursday, expects to touch revenues of Rs 500 crore by June 2009.
Plans for the year include six more outlets by June 2009, according to Mr Rajesh Seth, Vice-President, Marketing, Central and Brand Factory, Pantaloon Retail (India) Ltd. The company has budgeted investments of around Rs 6-10 crore a store, he said.
Brand Factory will now offer products from Planet M, Globus, Staples and Dollar stores.
“We want to make this a lifestyle store and all out future Brand Factory outlets will be similarly designed,” Mr Seth said.
Gloria Jean’s Indian cash & carry subsidiary
US-based coffee chain major Gloria Jean’s is setting up a wholly-owned cash-and-carry subsidiary in India to supply coffee beans, merchandise and equipment to its cafes in the country operated through the franchisee route.
The retailer currently has a master franchisee agreement with Citymax Hospitality (India). Gloria Jean’s has applied to the Foreign Investment Promotion Board (FIPB) for permission. Under the current law, 100% FDI is permitted in the cash-and-carry wholesale business.
The proposed Gloria Jean’s subsidiary would be involved in local procurement of roasted coffee, apart from paper cups, syrups and equipment. It would also import incidental products from China, Australia and other countries. The cash-and-carry subsidiary would sell coffee and other incidental products to Gloria Jean’s master franchisee in India.
This is similar to the model being followed by Wal-Mart, the world’s largest retailer, in India. The retail giant has invested directly in a cash-and-carry subsidiary which will supply to the front-end stores under a franchisee agreement with the Bharti Group.
Retailers need an entertainment push
As spiralling inflation dents buyer sentiment, leisure and entertainment forays seem to be big retailers’ weapons to fight flagging sales.
Leading the way is Kishore Biyani-led Future Group that is opening unisex salons, gaming centres and family entertainment centres at its nine Big Bazaar Supercentres. Similarly, Vishal Retail is planning to start salons within the premises of its 120-odd outlets.
Shoppers Stop has introduced its brand of cafes, bookstores and spas within its stores to make consumers spend more time and entice them to buy more.
Indian Real Estate – Investment Options
At a meet titled “Solid Grounds” organised here recently by IndiaProperty.com and Priya Publications, the panelists spoke on various issues pertaining to the real estate sector. They touched upon property market trends, realty funds, housing finance scenario, tax planning for real estate investment, marketing real estate among non-resident Indians and web marketing. The participants included builders, real estate agents and developers of Bangalore.
Some interesting details on why non-resident Indians (NRIs) from US, UK, UAE and Canada are keen on buying property in India were provided by the speakers at the meet. T. Shrikanth, National Head – Sales and Operations, IndiaProperty.com said that the NRIs are looking at realty sector as an investment option.
“Many NRIs see investment in property as the best solution to fulfill their desire to return to India at some point of their life. NRIs also invest in property for sentimental reasons and the investment has seen multiple returns quickly.”
The investment pattern for a typical NRI in Middle East would commence in May wherein he starts searching for properties online/offline. Subsequently he visits India during his summer leave in July or August to give an outcome to his research. When it comes to the choice in properties, Middle East Indians prefer to buy apartments, whereas NRIs from the US and UK prefer luxurious properties like gated communities, equipped with security alarm bells, swimming pools, recreation clubs, etc.
About 30 per cent properties worth Rs. 50 to 80 lakhs, 20 per cent between Rs. 1.5 crore to 2 crore, 15 per cent between Rs. 5 lakh to 20 lakh, while five per cent of NRIs are looking for properties between Rs. 2 crore and Rs. 4 crore. Around 30 per cent NRIs prefer apartments, 20 per cent luxury villas, 15 per cent look for plots, while five per cent prefer farm houses. While 23 per cent ranked Chennai, Bangalore and Mumbai as the preferred destinations, about 15 per cent also look at Tier II cities. According to its findings typically most NRIs choose to first invest in a property in their own0 native and later prefer to look at destinations outside their hometown for investment and a better sense of social position. The first generation NRIs who feel India is the best place for investment would go for apartments or condominiums, which would predominantly explain the individual’s status. While the second or third generation prefers to invest in villas or resorts for his personal interest or a vacation spot.
Source
Mumbai’s first condo hotel in Neral
Australia-based engineering and construction company, Sterling Construction Systems, has announced its entry into the country with Tuscany Terraces – a three-star resort and weekend homes project based on the condotel resort model.
One of the three projects being developed by SCS in Neral, Maharashtra, Tuscany Terraces is due to be launched in October this year. Depending on the success of this project, the company will eye similar developments in other parts of the country.
While condotels are popular internationally, it is yet to be seen how popular the model will be in India. According to Harinder Bhalla, VP (Sales & Marketing) of SCS, the market for vacation homes is huge. “We have found that nearly two lakh people are looking to invest in good projects around Mumbai and are ready with funds,” he said. SCS has entered into a partnership with Best Western International to manage the resort. According to Bhalla, each condotel unit owner will get 30 room nights and an exit option after five years. Spread over 2,00,000 sq feet, Tuscany Terraces will be developed at an investment of Rs 60 crore and will be priced at a starting price of Rs 20 lakh.
Tatas’ IHCL enters China’s Hotels
Corporate leader Tatas on Friday announced its entry into Chinese hospitality sector through the group company Taj International Hong Kong.
The Taj International Hong Kong, a wholly-owned subsidiary of Indian Hotels Company Ltd, has signed a management contract with Cuiting Hotspring Management Company, Tatas said in a statement barely weeks before the Olympic Games in China.
Under the agreement, Taj would operate the latest Temple of Heaven Park property in Beijing and the Hainan Hotel project.
Brahmaputra Infrastructure – 20,000 cr for hotels
Brahmaputra Infrastructure is set to establish 20 five-star business hotels over the next decade. Revealing recent developments, Rakesh Kadam, president of the hotels division of the company said, “The hotels will be upscale five-star business hotels with an inventory of 150-250 rooms each, developed within the next 10 years.” The company is putting in a corpus of Rs 20,000 crore in its expansion whereby its hotel division will accrue 40 per cent of the amount and rest will come from a mix of debt, and funding from financial institutions or private banks.
“We are in talks with Tourism Finance Corporation as well for the funding,” Kadam elaborated.
He also shared that Brahamputra Infrastructure would take the hotels to non-metropolitan cities and townships. “We are consciously going to establish the hotels away from metropolitan destinations therefore will not look at Delhi, Mumbai and Bengaluru for sure. There is a growing demand for high-end business hotels in smaller cities and towns. It is a great opportunity for us to exploit this situation,” added Kadam.
Apple Core Budget Hotels in India
US-based Apple Core Hotels, that owns and manages five budget hotels in mid-town Manhattan, has revealed plans of its foray into the Indian market from the Big Apple. The company, which operates on a franchise model primarily, is likely to tie-up with a US based hotel brand to develop properties in India.
Speaking exclusively to Express Hospitality, Vijay Dandapani, COO of Apple Core Hotels, said, “We are looking to enter the Indian market either with a partnership with an existing hotel or through a new project, in collaboration with hotel management companies in India.”
He added, “The collaboration will be for a major American brand for which we are set to acquire the development rights for India,” without divulging any further details on the positioning and the segmentation.
The company will announce its plans for India within the next six months and is already negotiating with various hotel groups here. Dandapani remarked that each project would have some equity participation on a case-to-case basis.
“The primary focus will be on franchising. We are looking at tapping tier I, II and III cities across the country with an emphasis on the states of Tamil Nadu, Gujarat, NCR, Karnataka, Andhra Pradesh and Maharashtra,” he informed.
Navi Mumbai Hotel site – 283 crores
The land auction on Friday by the City and Industrial Development Corporation (Cidco) for a five-star hotel in Navi Mumbai was a clear indicator of a realty slump.
Pune-based Metropolis Ltd outbid Taj Group’s Indian Hotel Pvt Ltd to bag the sprawling 47,000 square metre plot at Seawoods in Nerul, off Palm Beach drive, by quoting Rs5,000 per sq m more. At Rs60,085.15 per sq mt, the net deal is around Rs283 crore. This is the biggest ever plot Cidco has auctioned in Navi Mumbai for a hotel — Navi Mumbai has no five-star hotel yet.
