The downturn has drastically lowered valuations of Indian real estate firms but the promoters face virtually no threat of takeovers as they are sitting on stakes in excess of 70-80 per cent of equity.
Despite a slowdown in property sales, realty developers across the country are launching new residential apartments during the ongoing Navratri festival in the hope that they will get higher sales from prospective home buyers, who have deferred their buys so far.
Brandhouse manages exclusive stores of four SKNL brands -- Reid & Taylor, Stephens Brothers, Belmonte, and Carmichael House -- and two foreign brands Dunhill and Escada. It has more than 600 stores now. The company plans to set up its first private label store early next year and the average size of the store will range from 8,000 to 10,000 sq ft, said Tarun Joshi, managing director of Brandhouse Retails, the retail unit of S Kumars Nationwide.
Analysts say prices may stagnate or decline in the next three months. Almost 70 per cent of the brokers who participated in the poll believe prices will be flat or negative in the period and even Diwali is unlikely to lift the mood in the property market.
Anxious executives from 150 Greater Noida factories met on Wednesday to take stock of the simmering labour unrest in the sprawling industrial township in the outskirts of Delhi after Graziano Transmissioni Managing Director Lalit Kumar Chaudhary was killed by a mob of retrenched workers on Monday. Privately, many of them said it would now become hard to downsize in the impending industrial slowdown.
Real estate companies such as Unitech, Peninsula Land, HDIL and Future Capital, the financial services arm of Future Group, are in talks with investors including some leading private equity funds for raising investments for their projects, after the collapse of Lehman Brothers, whose third party fund had promised investments in these property companies' projects, according to industry sources.
The recent depreciation of the rupee against the US dollar is unlikely to ensure better margins for exporters as buyers in Europe and the US, facing lower demand in their countries, are asking for hefty discounts.
Recently, IT czar Azim Premji bought a 10 per cent stake in Subhiksha through his personal investment arm for nearly Rs 230 crore, valuing the retailer at Rs 2,300 crore. Premji's firm purchased this stake from ICICI Venture. However, this time around, Subhiksha promoters are expected to issue fresh equity to investors and expect the valuation to be around Rs 3,800 crore, sources said.
The group, which employs nearly 26,000 employees, plans to cut employee costs by one per cent, or Rs 65 crore (Rs 650 million), in the current year by redeploying people in its various businesses and reducing new hirings. "Instead of external hiring, we have redeployed a part of our people resources from our mature businesses to the new ventures," Future Group CEO Kishore Biyani said.
If the sale of over 600,000 application forms for the 5,020 apartments on offer by the Delhi Development Authority is any indication, private developers in the national capital region are in for tougher times ahead, as investors are betting on their chances for higher returns from the cheaper DDA flats. On an average, a DDA flat is on offer at half the price of apartments being developed by private developers.
Indian exporters are not opening the bubbly yet despite a rapid depreciation of the rupee, which fell to a 17-month low of Rs 44.17 against the US dollar on Tuesday before rising to close at Rs 43.85.
Companies that earlier took 36 months on housing projects are now completing them in around 30 months by boosting efficiencies and using modern technology. Commercial project developers are going a step further, completing projects in 17 months instead of 24. In some instances, mainly in smaller commercial buildings, developers are trying to cut down the project completion time to a mere 9 months.
The figure is expected to rise to over Rs 4,600 crore (Rs 46 billion) by 2010 - a compounded annual growth rate of 44 per cent. Retail has been one of the largest growth sectors for all the top IT firms. For instance, Tata Consultancy Services, Infosys Technologies, Wipro Technologies and Satyam Computer Services saw their retail business grow by 33.6, 45.3, 38.5 and 117 per cent respectively on a year-on-year basis.
Caisse manages nearly $155 billion of pension and insurance funds in Canada and North America while Ivanhoe has 70 shopping centres in Canada, the US, Europe and Latin America, totalling 46 million sq ft.
The regulator has also cancelled the licences of three packagers providing services to Subhiksha for violating the packaging rules. The warehouses are based in Bhiwandi, which is on the outskirts of Mumbai.
Delhi and Mumbai alone account for a fifth of the country's total surplus income. The country's top 20 cities, including both Delhi and Mumbai, account for just 10 per cent of the country's population but 20 per cent of its savings, 30 per cent of its income and as much as 60 per cent of its surplus income
Property developers, consultants and brokers have seen a 40 per cent decline in enquiries from home buyers over the last three months.
The drive to cut costs is becoming critical as key input costs - steel, cement and labour - that account for 40 per cent of project costs have escalated 50 per cent over the past year.
The recent pullout by ICICI Venture and Citigroup Venture from a three-year-old drug discovery partnership with Dr Reddy's Laboratories points to angel investors' growing aversion to risk in pharma and biotech firms, say experts.
Unitech, the country's second-largest property developer, is planning to raise nearly $1 billion (Rs 4,200 crore) in the current financial year from private equity players for its hotel, commercial and retail projects across the country.
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