Dubai properties 60 % cheaper than Mumbai

7 Apr, 2011, 10.58AM IST,PTI

DUBAI: A growing number of investors from India are showing interest in Dubai as they look to capitalise on 60 per cent savings per square foot in the Dubai property market, a Dubai-based real estate company has said.

DAMAC Properties said in addition to the price disparity, Dubai's property market is becoming increasingly attractive to foreign investors due to the implementation of a raft of new regulations, such as the new Strata law, which favours home owners.

"As these new tougher and more stringent regulations take hold, Indian investors are looking to take advantage of the plethora of investment opportunities that exist within the emirate's real estate market," it said in a statement.

At an average price per square foot of USD 264 in Dubai, according to Colliers International, property is now 60 per cent less expensive than in central Mumbai , where the price per square foot is USD 664 according to Jones Lang LaSalle .

DAMAC Properties Senior Vice-President Niall McLoughlin said: "At DAMAC Properties, we have seen a marked rise in interest across our Dubai portfolio from Indian investors; in January 2011 we had double-digit growth in enquiries on the same period last year.

"Not only are we seeing a surge of interest from potential Investors from India but also from other emerging markets such as sub Sahara Africa and China who are looking for quality assets, at competitive prices."

According to McLoughlin, even though confidence was shaken following the global slowdown, the introduction of new regulations in Dubai gives property buyers more security over their investments. DAMAC Properties has also welcomed the return of liquidity into the mortgage market, which it cites as another major factor in the revival of the emirate's real estate sector.

"Now that banks and financial institutions have begun to regain confidence in the market, and are again in a position to offer financing packages, it will start to address the issue of oversupply -- one of the major factors in the sector's devaluation," McLoughlin said.

Sobha Developer to Launch Projects in NCR and Chennai

As Sobha Developers prepares to launch projects in new markets such as the National Capital Region (NCR) and Chennai, it could look at monetising more land to raise funds, according to reports. J C Sharma, managing director of Sobha Developers said that finances for the new project launches have already been tied up but the company could resort to land sale if it fell short of funds. “We have already raised money for the projects. If additional funding is required, we will look into sale of land.”

S Bhaskaran, CFO, Sobha Developers, said the projects in NCR will be launched by May, while the Chennai projects will be launched in July-August. The monetisation would help the Bangalore-based real estate company to keep its debt at reasonable levels and bring down its average cost of borrowing further from the current 12.7 per cent.

Last fiscal, the company had sold a considerable portion of its 3,000-acre land bank to bring down the debt on its book. It has also brought down its average interest rate to 12.7 per cent in the current fiscal from 13 per cent last year. Sharma said the company was looking to further bring it down by 70 basis points (bps) in the next financial year to 12 per cent. “It (average interest cost) is on the higher side but we expect to pin it down in the next two quarters,” he said.

Sobha, which had a debt-equity ratio of 2:1 about a year-and-a-half back, has brought it down to 0.67:1 by improving its cash flow and monetising land. Sharma said the company is looking to bring it down further. In the last couple of months, Sobha has seen its price realisation trend up on better mix of properties, which has lately tilted towards luxury and super-luxury. The company’s average realisation at the end of February was at Rs 4,100 per square feet (sq ft) compared with Rs 3,946 per sq ft in the third quarter of 2010-11.

CREDAI Andhra Pradesh to Implement Code of Conduct for its Members

The Confederation of Real Estate Developers Association of India (CREDAI), Andhra Pradesh chapter is likely to implement a code of conduct for all its members in the state, wherein developers, recognised by CREDAI (AP), will have to abide by a set of rules laid down by the national body. CREDAI is also slated to set up a consumer redressal cell in AP to ensure transparency in the dealings of the sector. This was announced by C Sekhar Reddy, vice-president of CREDAI (president of the AP chapter), at a conference held in Hyderabad on Friday to discuss the many challenges facing the real estate industry.

Speaking about the stigma attached to the business of real estate (due to the lack of transparency), which is still considered to be a largely unorganised sector, Lalit Kumar Jain, president of CREDAI said, “We have embarked upon a `mission–transparency’ and hope to achieve it through this code of conduct, which is already in place in states such as Tamil Nadu. It will help protect the interest of the consumer and also enhance the quality and standard of delivery of a product.”

But while the industry needs to fix this gap, Jain said that the government too must play a larger role to ensure better growth of the realty sector in India. “Efforts should be made to rationalise taxes and duties and set up seamless and uniform guidelines that would be applicable to all states across the country,” Jain said further stressing on the need for a `single window’ clearance system. Pointing out how the cost of a product shoots by at least 20-25 per cent, due to delays in securing approvals, the CREDAI president said that a comprehensive check-list (of all central departments) was the solution to this problem.

“In some states it takes as long as one year to only get environmental clearance. That ends up adding to the actual cost of construction. With a single window system, we can bring this time down to just about three weeks,” Jain said referring to cities such as Gujarat and Jaipur where getting permissions take not more than a few weeks. He added that CREDAI has already submitted this proposal to Kamal Nath, Union minister for urban development and is awaiting a confirmation on the same.

Talking about the impact of recession on the realty sector Jain said that the market has stabilised post August 2010 and is likely to see another upswing in the next two years. “The situation in AP too has improved October onwards,” Reddy said in reply to questions pertaining to the state adding, “In fact there is a shortage in the old Municipal Corporation of Hyderabad area.” Also present at the meet were T Chitty Babu, president, CREDAI, Tamil Nadu, G Yoganand, general secretary, CREDAI-AP and P Rama Krishna Rao, managing director of Hyderabad-based Manbhum Constructions Pvt Ltd.

Delegating in the Workplace

Delegating in the workplace is an interesting piece written by Olivier Serrat and published by ADB. According to the author “ No man is an island, entire of itself; … , meditated John Donne. In more ways than one, too: cooperation, especially the trust and graduated delegation of authority it usually implies when people come together to realize societal and organizational goals, determines how we live, learn, work, and play.” Read the complete story from HERE

Tata Housing to Invest Rs 3,000 crore on Affordable Houses

Tata Housing Development Company would invest up to Rs 3,000 crore next fiscal to develop affordable homes across the country. The company already has five projects in the affordable segment and plans to launch 7-8 more projects next fiscal. Tata Housing has formed a subsidiary Smart Value Homes to develop affordable houses in the price range of Rs 5-35 lakh.

“We plan to invest Rs 2,500-3,000 crore in 2011-12 to develop existing and new projects in the affordable housing segment,” Tata Housing Development Company managing director Brotin Banerjee, said. Smart Value Homes is developing two projects each in Mumbai and Pune, and one in Chennai with a total saleable area of 10-12 million sq ft, Banerjee said.

“We will launch three more projects in Mumbai, Bangalore and Ahmedabad during the first quarter of 2011-12,” he said, adding that the company is looking at more projects in other parts of the country. The company plans to build affordable homes in Ludhiana, Jalandhar and periphery of Chandigarh on public-private-partnership (PPP) model in the wake of high land prices in the state.