With 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.

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Mall 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.

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The 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.

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JPMorgan 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.

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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.

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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.

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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.

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“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.

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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’.

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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.

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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.

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The realty firm has also formed a joint venture with the US-based hospitality group Accor Hospitality to develop and manage the hotel project.

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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.”

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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.

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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.

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