Loan rates cut . Expect more cuts in the near future

With the Federal Reserve cutting rates by 1.25% over the past 3 weeks, RBI will be forced to follow suit and cut by atleast 0.5 to 0.75. I expect the loans rates to go down to 9.75 floating in the near future. Its best for borrowers to wait few more months for the RBI to cut rates before jumping the gun. Housing supply is abundant so the builders are in no hurry to raise prices, rather one can negotiate upto 10-15% and I think they will oblige if you are willing to write a check the right next moment

Times has the article on HDFC cutting loans

MUMBAI: Finally there is good news for people who have taken a loan with a floating interest rate to buy their dream homes. HDFC, the leader in the home finance business, has decided to cut interest rates on floating rate home loans for all its existing customers by 25 basis points. With the leader cutting rates, the market expects it will be only a matter of time before other players follow.

On Thursday, HDFC said it would cut its retail prime lending rate (RPLR) — the rate to which all its interest rates are benchmarked — by 25 basis points to 13.75% per annum from the 14% earlier. The cut is effective from February 1. It has, however, kept its floating rate for new customers unchanged at 10.25%.

This means all HDFC floating rate customers will see a cut in rates by a quarter of a percentage point. However, the effective date for each will vary. "The advantage of a cut in RPLR will accrue to all the existing floating rate customers over the next three months based on their respective reset dates," HDFC said in a release.

The other major players in the sector are ICICI Bank and SBI. ICICI Bank is still to take a decision on revising its housing loan rates. A top ICICI Bank official said its decisions on home loan rates were based on its cost of funds. "We will continue to watch the market closely." Till Thursday evening, SBI had not taken any decision on home loan rates.

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GST in chennai is the new destination

Hot property: Property developers are focussing on the area adjoining GST Road as infrastructure is much better and connectivity to the city by road and rail is of good quality.

The population influx towards GST Road is set to touch several lakhs, property developers predict.

The new residential projects follow on the heels of announcements of several Special Economic Zones (SEZs) in the area.

Among the new Special Economic Zones are one proposed for Information Technology companies and one for renewable energy generation equipment.
Despite complaints that infrastructure within the Maraimalai Nagar township, proposed as a satellite city to the metropolis, is not up to the mark, property continues to be bought and sold in and around the area.

Annai Builders, dealing with property in Maraimalai Nagar, had bought 50 acres in the township. Some 560 plots have been sold, representatives of the company said.
Another 560 plots would be coming up in the area. Most of these would be residential, while some land could be put to commercial use, they speculated.

Property development in the area is significantly on the increase. Land prices are currently Rs. 200 per square foot and are set to increase, they add. Information Technology companies are also moving to the locations around GST Road since it possesses excellent connectivity and more affordable housing and office space, builders say.

The new Information Technology Special Economic Zone coming up at Madurantakam, for instance, would bring in at least 30,000 new people, believes P. Suresh, Managing Director, L&T Arun Excello Realty. The Mahindra World City already houses several Information Technology companies including Infosys and Accenture, points out Hari Nagaswaran, Executive Vice Chairman, Hallmark Infrastructure.

They have also launched an integrated township project at Vallanchery with housing units priced upwards of Rs. 55 lakh.
There are about 650 apartments in the first phase and more than half have been booked, Mr. Suresh says.
The integrated township would be offering several facilities, including a Vidya Mandir School that would prioritise admission of residents in the township.
“We were initially unsure what the response to an integrated township would be,” he recalls, adding the response has been very good with people expressing a preference for easy access to all facilities at walking distance.
The township would include hotels, landscaping, a water body and green surroundings, he promises.
There is plenty of room for more players in the area, Mr. Suresh believes. The Special Economic Zones are likely to act as an engine of growth in the area, bringing in more infrastructure and housing projects. The Old Mahabalipuram Road boom is over, says Mr. Nagaswaran confidently.
The region is too crowded and property prices are dropping. A lot of office space in the corridor is vacant, he finds. While government officials believe that the Old Mahabalipuram Road would see a lot of activity once the remaining phases of work are completed, property developers with special interests in the GST Road feel otherwise.
There is an increasing focus on GST Road area as infrastructure is much better and connectivity to the city through road and rail of good quality, he believes. Mr. Suresh echoes the belief. Suburban trains ensure that commuters can reach, say, Parry’s Corner in 50 minutes, while the same journey by road would take up to two hours, he says. This makes the location ideal for those with a spouse who might have to commute into the city, while their place of work is nearby
.

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Insane housing prices in Mumbai

I came across the table of values from the site http://www.narains.com/rates.htm and its astounding to see prices in Mumbai keep on escalating over the past few years. Certain areas like Santacruz have seen in prices triple in the past 3 years. I'm not able to figure out how many transactions take place at these prices. At these rates a 2 bed room apt measuring 1000 sq/ft could go for over 15M to 30M rupees in an A grade building. With 40 rupees to a dollar we are taking about 400-900$ per sq/ft. With these prices I could very well purchase in New York ..., not speak of other places in the US

Location

'A' Grade Bldg.

'B' Grade Bldg.

'C' Grade Bldg.

Cuffe Parade / Colaba	Rs.35,000 - 60,000*	Rs. 22,000 - 30,000	Rs. 15,000 - 18,000
Marine Drive / Nariman Point	Rs. 40,000 - 50,000 (NCPA Only)	Rs. 20,000 - 25,000	Rs. 15,000 - 18,000
Malabar / Cumballa Hill	Rs. 35,000 - 60,000*	Rs. 22,000 - 30,000	Rs. 15,000 - 18,000
Napean Sea / Warden Rd.	Rs. 35,000 - 60,000*	Rs. 22,000 -30,000	Rs. 15,000 - 20,000
Worli	Rs. 30,000 - 40,000*	Rs 16,000 - 22,000	Rs.12,000 - 16,000
Prabhadevi	Rs. 18,000 - 22,000	Rs. 13,000 - 18,000	Rs. 10,000 - 12,000
Bandra	Rs. 18,000 - 30,000	Rs. 13,000 - 18,000	Rs. 11,000 - 12,000
Khar / Santacruz	Rs. 16,000 - 18,000	Rs. 12,000 - 16,000	Rs. 8,500 - 10,000
Juhu	Rs. 16,000 - 20,000 (Sea facing)	Rs. 9,000 - 11,000	Rs. 8,000 - 9,000
Lokhandwala / Versova	Rs. 9,000 - 14,000	Rs. 6,500 - 9,000	Rs. 5,000 - 5,500
Powai	Rs. 9,000 -11,000	Rs. 6,000 - 8,000	Rs. 4,500 - 5,500

Mumbai Property rates per sq.ft. Updated as on 5th Jan 2008

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Township craze in Chennai

Realty vendors have unleashed their marketing hounds to make a killing in selling township dreams in this southern city. Capitalizing on the IT boom on Old Mahabalipuram road (OMR as its called inspite of the new name Rajiv Gandhi IT highway) leading players like DLF, L&T and Hiranandani have launched super-sized projects of over 2000 apartments each in the vicinity of OMR. The results have been spectacular as people are rushing in to buy apartments in case the miss out on the launch price specially with DLF and L&T. The other existing players of Chennai like Jains, Arihant too seemed to have launched projects there though the hype made by the national developers is going to drive national attention to a place known for its temples and saltpans. The developments around OMR too merit some attention with IT bigwigs making a bee-line to setup their captive centers on both sides of the road. With TCS/Infosys/Wipro and others having commissioned big campuses, its a matter of time that this place is buzzing with activity. One hopes the road is fixed up and becomes a true national highway. For what its worth the prices are below. Beware prices change faster then you can say "Sarvana Bhavan"

1) Hiranandani Upscale – 800 increased. – Rate 4100/sqft - Apr 07 - 3600 - went upto 4400
2)Purava Swan Lake - 650 increased. Rate 3600/sqft - Rs.2950
3)Purava Windermere - Rate 2790/sqft Not launched yet
4)L&T South City – Is it new? Is this the start rate? - Rate 3600/sqft
5)L&T Estancia - 550 increased. Rate 3500/sqft - rs 2950 Apr 2007
6)Mantri Synergy - Rate 3700/sqft
7)Chettinad Enclave (villa) - Too much - Rate 4250/sqft - Rs.1975 in Oct 2005
8)DLF Township - 400 increased. Rate 3200 / sqft- Rs2800 2 weeks ago..
9) Lancor in clasic - 1300 increased. Rate 4100, year ago Rs 2800/sqft
10) Akshya
11) Olympia Opaline
12) City Square
13) Aharihant Heirloom
14) Jain Iselin - ??? starting price rs.2900 in Apr 07

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Bangalore builders set to ruin Chennai outskirts

Rising prices in the real estate sector in Bangalore, the IT capital of the country has turned the attention of several realtors to Chennai, a city which is slowly but surely set to beat Bangalore in the real estate space.
Experts point out that Bangalore is becoming crowded and there is hardly any space for new construction. Moreover due to the demand and supply mismatch, a large number of apartments are lying vacant.
Realtors point out that there were plans to slash the prices of the apartments, but they realised that it was not a feasible option as huge amounts of money had been invested. Builders however may reduce the prices marginally to ensure that the apartments are sold.
Keeping this scenario in mind, several builders are shifting base to Chennai. There is plenty of land available in the outskirts of the city and there is no mismatch in the demand and supply in Chennai, realtors point out.


Builders also have in mind the fact that several IT and automobile giants are shifting base to Chennai. Thanks to this, there would be more demand for apartments in the city, realtors point out.
Builders say that they have been assured of more infrastructure in Chennai compared to Bangalore. In Bangalore, people are scared to invest in certain areas such as Hosur road and Koramangala due to the chaotic traffic. On working days, one would have a three-hour battle with the traffic to reach home.


However, the scene is different in Chennai. The city is better planned and the traffic is well managed. Constructing apartments in a 20-kilometre radius of the city would not be a bad deal as the travel time is negligible thanks to the excellent management of traffic.
Purvankara builders are moving into Chennai in a big way. The firm is constructing 2072 apartments at Pallikarani in Chennai. The builders feel that Chennai is a better bet at the moment thanks to infrastructure available in the city.
In Chennai, builders expect their apartments to be sold off faster compared to Bangalore as there is a huge difference in the prices. In Bangalore, where there is a synthetic pricing, apartments are being sold at Rs 10,000 per square foot, while in central Chennai, the prices are Rs 5000 per square foot.
Builders see Chennai as an emerging market when compared to Bangalore. The prices are affordable in comparison to the unrealistically high prices in Bangalore. With more realtors shifting to Chennai, the city is set to beat Bangalore in the real estate race. But will Chennai go the Bangalore way? Only time would tell.

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Congress blames SEZ lobby for Goa crisis

The SEZ lobby is strong enough to topple governments.

The Congress leadership here on Friday launched hectic efforts to save the Digambar Kamat government in Goa amidst serious charges that the powerful SEZ lobby was attempting to destablise and install an alternate dispensation with the help of three defiant NCP MLAs.

Kamat, who reached here on Friday afternoon with party MLAs, attended meetings convened by Congress president Sonia Gandhi as well as the NCP leadership, who was trying to win back the three errant MLAs. The Goa chief minister had managed to tide over an embarrassing situation in the state Assembly on Thursday, but events took a fresh turn after the three NCP MLAs refused to give their support to him.

"We met Gandhi and briefed her about the political situation in Goa. We discussed the situation. Now we will talk to NCP leaders again and a solution will be found," Kamat told reporters. The AICC had earlier in the day, put the blame squarely on the "SEZ lobby" for the crisis, as party leaders suggested that it would be a miracle if the government could be saved.

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Economic times turns to Astrologers to predict the future

Realty market may see major growth till April '08

NEW DELHI: Circa 2007 may have been an extended joyride for investors, but the stars spell a word of caution during 2008. And the general feeling among the cross-section of astrologers that SundayET spoke to was that while the first half of the year would be good for investors, the next half could be a bit choppy in parts due to unfavourable changes in planetary positions.

The idea behind the interaction with the astrologers was to get a sense of the investment outlook for stocks, real estate and commodities. On the brighter side, the year 2008 would symbolise leadership, dominance and position of authority for the economy. Aura reader S Bhattacharya foresees a positive outlook for the real estate sector. But he doesn’t rule out a few hitches either.

“The sector will continue to be strong till August 17 in Delhi and surrounding areas. But there will be a 18-20% decline post that. Prices are expected to be weak in all other areas, except for Mumbai and Goa, which will continue to remain strong. The bubble burst may happen in February 2009 but there is still room for optimism for real estate in 2008.”

Unlike last year, when the stockmarket threw up surprises with the Sensex touching the magical figure of 20,000, leading numerologist Sanjay B Jumaani predicts that the bourses will take a beating after June next year. “Gold is yellow just like the sun and can have a field year.

Real estate will continue to march upwards though the pace could reduce. In stocks, after August 15, India will enter its 62nd year and 62 adds up to 8 of Saturn. This does not favour stocks but it does favour real estate, farming and steel. One should also be careful about treading in commodities after August 15.”

His logic is that the year 2008 adds up to the number 1, which represents the sun and creative forces that give light and life. It symbolises leadership, dominance and position of authority.

Agrees astrologer Anurag Tripathi, “with the planetary position changing subsequent to June 2008, the financial markets will be hit. The market will end up in the range of 24,000 to 25,000 points in 2008.” According to him, the major astrological implications on the markets will be seen in December 2009 when the position of Saturn will change.

He expects a huge fall in December 2009 onwards and sees the market ending up from where it started its bull run. Leading US-based astrologer Ashok Motiani, however, feels that Sensex will touch the 21,000 mark before April-end 2008.

He anticipates a decline from May onwards, a trend likely to continue for several months. “There will be a major correction during this period. This correction is likely to be caused by liquidity squeeze, not only in India but all over the world.”

Mega IPOs and FIIs may have left the real estate sector smiling in the spotlight during 2007, but Motiani sees possibility of a mild correction next year. “Saturn has been transiting in Leo since July 16, 2007 and will continue to transit till September 10, 2009. During this period, real estate in India is likely to slow down. Prices will stop rising that’s for sure,” he says.

According to yet another astrologer Kewal Anand Joshi, the real estate market will see substantial gains till April 2008. He forecasts a downfall from April 15-July as there will be decline in foreign buying interest. “The market will be normal from September-December but ups and downs will exist,” he feels. For the yellow metal, the upward journey may continue as Joshi foresees it reaching Rs 12,000 in the New Year.

Gold scaled new highs with the price for 10 gms zooming to Rs 10,000 in 2007. Bhattacharya also cautions against a rise in petrol prices in 2008. “Prices will continue to rise in the commodities market. Agricultural items will also be expensive,” he says.

So while punters are dreaming of stronger positions on Dalal Street, it could be the gold-diggers who will have the last laugh on their way to the bank. After all, that’s what the stars have to say.

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Record Slum TDR Rate in Mumbai

Another record was created in the city's real estate industry on Wednesday when slum TDR or transfer of development rights belonging to the Maharashtra housing and area development authority (Mhada) fetched an all-time high price of Rs 3,275 a sq ft. This is the first time that the rate of slum TDR has gone up so high, ever since it was introduced by the state government a decade ago.

In Mumbai's construction industry, slum TDR certificates are the equivalent of the stocks of blue-chip companies. They are generated when the developerowner surrenders his land to the government or agrees to rehouse slumdwellers or project-affected persons free of cost. In turn, he is issued a TDR certificate that gives him additional construction rights in the suburbs, but only to the north of the plot he has surrendered.

The latest stock of slum TDR came from a state government company, Shivshahi Purnavasan Prakalp Ltd (SPPL), which has been entrusted with the task of constructing low-cost houses to rehouse projectaffected persons.

Recently, Mhada had invited bids for about 8,000 sq m of slum TDR which was generated by a SPPL project in Turbhe near Mankhurd. When bids were opened on Wednesday, Swastik Realty quoted Rs 3,275 a sq ft for about 2,000 sq m of slum TDR. The remaining stock was purchased by Mantri Realty at Rs 3,250 a sq ft and another investment company, which paid Rs 3,204 a sq ft. It fetched Mhada Rs 28 crore.

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What makes this stock of slum TDR lucrative is its use in prime areas like Bandra (west). This is because Mankhurd, where the slum TDR has been generated, falls south of Bandra on the map.

Mhada sources told TOI that till a few days ago, the price of slum TDR was around Rs 2,800 a sq ft. Wednesday's record price is an indication about the demand for slum TDR. But such high rates is bad news for flat purchasers as it has a direct impact on the final price of an apartment. Residential property prices are already at a record high, and only a certain high income class of citizens can actual afford to buy a home in Mumbai today.

Builders have reaped a bounty ever since the concept of slum TDR was introduced by the state government a decade ago. They have gone on a construction spree, especially in the congested western suburbs between Bandra and Andheri. Activists have criticised this policy on the grounds that it puts a further load on the already stretched infrastructure in the suburbs. Critics call it transfer of disaster rights.

Virtually all construction activity in the suburbs is today carried out with the aid of slum TDR, which the builder can load on his project as additional floor space index (FSI) to construct additional floors. For instance, if the FSI in the suburbs is restricted to 1, the developer can load a maximum of FSI 1 on his project by buying slum TDR from the market.

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Property boom not yet over

New areas are fertile territory for investment.

BANGALORE: While the stamps and registrations department on Friday gave its official stamp to the real estate slump in the city, realtors indicated a potential boom in areas outside the traditional hotspots like Electronics City and Devanahalli.

And according to the city’s realtors, now is the time to invest.

Prices near Electronics City, Bommasandra and ITPL have gone through the roof and returns on investment here could take long.

“The problem with the sellers in these areas is that they quote unrealistic prices ,” says C Venkatesh, a realtor from Yelahanka.

And for those who have invested huge sums on sites here, the only hope is an up-and-running Bangalore International Airport and the proposed expressway connecting it.

“It is advisable for prospective buyers to now zero in on housing sites at Singapura and its surroundings. Land is available at Rs 1,000 a sq ft adjacent to main the road and Rs 800 a sq ft in the interiors.

So there is no sense is looking at ‘distant’ Devanahalli when cheaper sites are there for the asking closer to Bangalore,” explains C Mallikarjun, a realtor.

And with areas like Chikka Madura, Hesaraghatta, Peenya Dasarahalli, Laxmipura, Abbigere in Bangalore West and Doddaballpur, Vijayapura, Chikballapur, Attur, Singapura in North, the proposed infrastructure facilities will lead to rapid appreciation, say realtors.

“I bought a site at Rs 250 per sq ft two years ago. It can now fetch me Rs 1,000 a sq ft and is only set to go north. I now wish I had bought more sites two years ago. The same can’t be said of Hoody. I bought land at Rs 1,000 a sq ft six months ago. I have no buyer for this property today,” rues B Manjunath of Abbigere.

The scene, it seems, is similar with flats. Again, there must be due diligence before the final decision. Realtors say areas like Kaggadasapura, Vignananagar, Basavanagar, GM Palya and Nagavara, where new projects are coming up, are worth a look.

And with smaller builders, while it is necessary to read the fine print carefully, one can haggle on the price to one’s advantage, says a realtor.

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Infosys acquires land for second campus in B'lore

Government lends no hand to software giant.

The country’s second largest software exporter by revenue, Infosys Technologies Limited, has acquired 300 acres of land near Sarjapur off Bangalore to develop its second campus in the city.

This is the first time that the company has acquired land on its own without seeking the assistance of the state government’s land acquisition agency, Karnataka Industrial Area Development Board (KIADB).

“We bought the land directly from the owners for prevailing market prices. At present, the process of conversion of the land use pattern is in progress. We expect the entire process to be completed in the coming days,” Mohandas Pai, Member of the Board and Director (Human Resources, Education, Research and Administration), Infosys, told Business Standard.

Since 2004, all successive state governments had been sitting on Infosys’ application for additional land to expand campus in the city. When the JD (S) was in power, its chief H D Deve Gowda had even questioned the need for additional land. Since the issue took a political turn, Infosys decided to go ahead with the land acquisition on its own.

Pai said the company was yet to work out the plan for the second campus. “Once the land conversion is sanctioned, we will work on the design for the campus. It will be a long term project and an ongoing process,” he added.

The company intends to freeze the number of employees in Bangalore to 25,000 by the end of the fiscal. At present, Bangalore, which is the company’s largest centre, has 21,293 seats. Another 3,787 seats are being added in Bangalore to take the total headcount to 25,080 by March.

“We are taking space for 3,787 seats from a private firm on lease. It is our intention to cap the Bangalore centre at 25,000. The growth will stagnate in Bangalore and the focus will be on other centres. We are also planning to add 5,000 seats to the existing 5,434 seats in Mysore,” Pai said.

In the coming days, Pune will emerge as the largest centre for the company. At present, it employs 11,901 employees in Pune. Infosys is ramping up capacity in Pune to add 11,782 seats. “Pune will have in excess of 26,000 seats in the coming days. Our intention is clear. We want to grow in all other centres.”

The company, which employs 9,430 personnel in Hyderabad, has been allotted an additional 447 acres of land in the city. “The land was allotted to us in the third quarter of 2007-08. We intend to start work on the campus soon,” Pai said.

Infosys had a total seating capacity of 70,321 as of December 31, 2007. It intends to add another 29,791 seats in the coming months for which work is under progress.

They include 636 in Bhubaneshwar (existing is 3,300); 2,216 in Chandigarh (existing is 3,900); 5000 in Chennai (existing is 8,966); 1,000 in Gurgaon (existing is 195); 3,200 in Jaipur (existing is 890); 1,600 in Mangalore (existing is 3,275) and 220 in Thiruvananthapuram (existing is 1,337).

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Selling a luxury home isn't about the space, it is about the lifestyle

Selling a luxury home isn't about the space, it is about the lifestyle

Dressed for the occasion, you face a group of equally polished people across the negotiating table. They grill you on your background, your career, your income and your prospects. Satisfied with your replies, they sit back and smile. You are in.

Is this a job interview? A visa application? Perhaps a matrimonial enquiry? Actually, it’s “none of the above”. This is a potential luxury homeowner being vetted before his purchase is approved.

If you thought the only differences between luxury homes and their middle-class counterparts were the price tags and the frills, think again. Posh houses collectively worth more than Rs 30,000 crore are coming up across the country and builders and developers are fast realising that if they are to get buyers to willingly part with eight-figure sums, they need selling strategies that are significantly different from what they follow for more affordable housing.

So whether it is brochures that could pass off for coffee-table books or conducting a series of “personal interactions” to determine whether a buyer is worthy of an upscale apartment complex, they’re willing to try it all. And then some.

That’s because even within the fast-growing luxury segment, property is quite distinct. Unlike other luxury goods, such as fashion, automobiles, jewellery and accessories, the price of top-end real estate differs drastically depending on where you buy it. A crore would fetch you a minuscule, bare four-walls in a Mumbai suburb, where the same amount or a little over could buy you a decent deal in another metro, and a posh flat in smaller towns.

Of course, “luxury” costs extra. Multi-layered security, water and power backup, Wi-Fi, modular kitchens and marble flooring are becoming hygiene factors in most new mid- to high-end residential projects. Which means property developers need to constantly offer their demanding, deep-pocketed customers something more.

Here is how they do it.

Less is more
“It’s not about selling a commodity like other homes, but a lifestyle,” declares Anuj Puri, chairman of property consulting firm, Jones Lang LaSalle Meghraj. Adds Pranay Vakil, chairman, Knight Frank, “You will almost never find large-scale advertisements for luxury homes. Publicity is done mainly through word-of-mouth or by select property consultancies.” The subtle approach helps the developer discourage window shoppers and zero in on the serious buyer.

Typically, new luxury housing projects target top-level professionals and executives. Which means developers need to speak to them in their language. It may be a while before Indian property developers take prospective buyers to site visits in stretch limos but, meanwhile, they aren’t holding back in organising the kind of dos that will appeal to their target clientele.

The Lodha group, which builds high-end apartments in Mumbai, uses events as a marketing strategy. Rather than hard sell the group’s exclusive projects, select sets of prospective buyers are invited to events like art appreciation or wine and cheese sessions.

The return on investment is intangible, but substantial: even if only 10-20 per cent of the invitees follow through and become customers, the remaining 80-90 per cent become worthwhile word-of-mouth ambassadors.

“Events create a complete experience for prospective customers. It helps them understand our products better,” says Abhisheck Lodha, director, Lodha Developers.

The Unitech group also opted for the subtle approach when it launched Grande, a 5,400 luxury apartment project in Noida, near Delhi. Instead of the usual brochures and flyers with covered with floor plans and details of proposed amenities, it created a two-part “book”.

While book 1 is all about luxury, lifestyle, safety and the thought behind a township centred on a golf course, the other book provides the specifications of the apartments, the project layout and other details.

R Nagraju “You cannot sell luxury products with simple brochures,” says R Nagraju, general manager, corporate planning and strategy, Unitech. He does not divulge details on the number of books in circulation or conversion rates.

As for marketing costs, each flat in the Grande development will sell for over Rs 2 crore; realty consultants believe the coffee-table brochures will account for less than 1 per cent of sales.

Not that advertising isn’t an option. But many developers believe an exclusive print campaign in niche publications may fit the bill better than broadbased television commercials.

Nitesh Estates Vice President, marketing, Ashok Ganguly points out that his company advertises its Bangalore-based Canary Wharf project in select magazines as well as in-flight publications on certain domestic and international airlines.

“This kind of advertising has given quality visibility with quality audience. The ads cater to intellectual mind space of prospective consumers and translating their aspirations into reality,” says Ganguly.

Perhaps the most in-your-face marketing initiative was a couple of years ago for Sahara Group’s Aamby Valley.

Television commercials, hoardings and full-colour advertisements featured celebrity brand ambassadors like Amitabh Bachchan, Aishwarya Rai, Boris Becker and Anna Kournikova, promoting the township in in Lonavla, Maharashtra.

But that’s a one-off case, say experts. You won’t find too many multi-media campaigns for top-end housing projects. In fact, you won’t find them listed with your neighbourhood broker, either — a portfolio manager is a better bet for promoting these properties. Which is why building a strong network is the prime focus of developers.

“We do a network campaign in three ways; through top end portfolio managers, housing finance companies and through customer reference,” says Ramashraya Yadav, head, finance and strategies, Orbit Corporation, the Mumbai-based developers of Villa Orb. That’s an 18-storey, eight-apartment building on Mumbai’s Nepeansea Road, each of which will sell at upward of Rs 42 crore.

Others are developing “dealer” networks. “We have a network of 850 franchisees and dealers. We also participate in exhibitions both domestically and internationally to reach our target audience,” says Bipin Agarwal, executive director, Omaxe, a Delhi-based developer.

Space splurge
What is a luxury home buyer looking for? Most property dealers still can’t answer that with certainty, but they are taking no chances. They offer apartments and villas and exclusive floors that come fully loaded with every conceivable modcon and round-the-clock security.

But what swings the deal for most high networth individuals is knowing who their neighbours will be and whether their privacy is adequately protected or not.

“If you sell one flat to a managing director, you cannot sell remaining flats to lesser ranked executives,” agrees Raminder Grover, managing director, Sandalwood High Street Residential, a subsidiary of Jones Lang LaSalle Meghraj. Which is where the pre-purchase screening interviews come in.

To make doubly sure the privacy angle is covered, builders offer more space. Even in prime, heart of town locations, luxury homebuilders offer fewer flats. On Nepeansea Road, Villa Orb and Lodha’s Solitaire offer just eight apartments each. In Bangalore, the Canary Wharf project — located close to the commercial heart of Brigade Road and MG Road — will host only eight exclusive buyers.

Niranjan Hiranandani “Luxury home buyers need space that’s more than utilitarian, like bigger parking space, wider lobbies and so on,” says Niranjan Hiranandani, managing director, Hiranandani Constructions, a leading Mumbai developer.

That’s in the “town” houses. Space is not so much at a premium in the suburbs, so developers play another trump card — they create “destinations”. Taking a second look at the concept of luxury homes, developers are offering concept-based living options, often engaging foreign architects for the purpose.

The result is residences in golf courses (Jaypee in Noida), green areas (Omaxe’s The Forest in Noida), and spas (MetroCorp’s Nirvana in Bangalore), among others.

While the Omaxe project is located close to 325 acres of reserve forest, the project’s expected price of Rs 3 crore a unit is also attributed to the lavish landscaping within the project area.

Casa Estebana, developed by Koncept Ambience on the outskirts of Hyderabad, differentiates itself through Spanish style houses, while two projects in Noida (one by Jaypee and the other by Unitech) offers courses designed by golfing legend Greg Norman.

Developers are also offering upscale homes in smaller towns. There are two very good reasons for that. There’s very little competition from other builders and there’s significant untapped demand — not just from locals but also “townies” looking for a second, or holiday home.

Which is why DLF is planning a 115-acre ski village near Manali, Himachal Pradesh, which will also offer its villa residents kayaking, paragliding and other sport options. There’s a villa project coming up at Rishikesh as well — complete with swimming pool filled with Ganga water, a selling point, apparently.

High “net” worth
Projects like those are particularly appealing to prosperous, non-resident Indians. As most companies are finding, NRI demand accounts for anywhere between 15 and 25 per cent of all luxury home sales. Sales pitches in person to this influential and affluent customer group is difficult, which is why most builders are fine-tuning their online strategies.

That includes CRM programmes, quick follow-through on enquiries and targeted advertising. Virtual, 3-D tours and web walk-throughs are also an increasingly favoured option — Unitech and Orbit both offer the facility. Online interviews aren’t being considered, though.

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Interest rates likely to fall in coming weeks

NEW DELHI: Interest rates are expected to fall over the next few weeks after finance minister P Chidambaram on Friday expressed his "wish" that lending and deposit rates be cut by 50 basis points.

He also issued an "advisory" to chiefs of PSU banks to focus on lending to the consumer goods sector — both durables and non-durables — in a bid to prop up consumption and production, which have been dropping for the last few months.

"It is important to focus on both investment and consumption... There has been some sluggishness and that is why this advisory," Chidambaram said after meeting chiefs of public sector banks.

While the advisory is expected to make car loans and financing for purchase of consumer goods cheaper, what happens to home loan rates was unclear. Though the minister indicated that the need to moderate home loan flows was no longer required, he was not as candid on the issue. But the overall message was clear: interest rates need to dip.

"If monetary policy is also supportive, it is possible to look forward to stable, and perhaps some moderation, in interest rates," he said ahead of RBI's quarterly policy review.

With public sector banks, which account for nearly 7% of the market, cutting rates, private players would have little option but to follow suit.

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Rents hit the roof in Hyderabad

HYDERABAD: House rents have seen a steep hike in the surrounding areas of Hi-Tec City. This is most visible in Madhapur, which has seen an almost 100 per cent rise in just one year.

Till last year rents in this part of the city were comparable to other residential areas in the city. But the last quarter of the year saw the rent graph heading north at a furious pace.

This phenomenon is not limited only to Hi-Tec City but also in most residential colonies in the Serilingampally circle of GHMC where rents have doubled in the last two to three months. In areas like Maszid Banda, which is three kilometres away from the Kothaguda-Gachibowli road, house rents have doubled in the last one year.

"In January 2006, a two-room house was rented out for Rs 1,800 per month. By August 2007, the rent had gone up to Rs 2,500. Just four months later, in January, 2008, the rent of two-room houses have skyrocketed to Rs 3,500," said Anand Bhattacharya, associate analyst at Datamonitor Plc.

Most of the tenants in these areas are software company employees who see no other option but to accept the hike. "In all the surrounding areas of Hi-Tec City the situation is the same. We don't feel the pinch as the rent is usually shared by roommates and corporate salaries are also reasonably high," Anand said.

He does not want to move out of this area as it is only a 15-minute drive to his work place. "The roads are wider and there are no traffic jams here."

At Guttala Begumpet in Madhapur, one has to shell out Rs 12,500 for a two-bedroom flat. "In February, 2006, a similar flat was available for Rs 6,500," said Prasheel Bhanpur, who works as a corporate communications specialist in Maytas Infra Limited.

"It costs Rs 6,500 for even a single room with attached bathroom. The rent for such a room would not have been more than Rs 3,000 only a year back," Prasheel said.

Residents link the increase in rents to the opening of two new restaurants and supermarket in the locality. "Two new restaurants and a supermarket have come up at the Kothaguda junction. Two petrol pumps have been opened at Gulmohar Park and Lingampally railway station," says S Bhaskar Yadav, who owns two houses in Kondapur. Earlier, not many people were keen on living in areas like Maszid Banda, Sudarshan Colony and Alind Colony. But now there is no need to even put up a 'to let' board, as software employees are willing to pay as much as Rs 12,000 for a two-bedroom flat in a new building with three months rent in advance, Yadav said.

GHMC collects Rs 10 per square metre as property tax at Madhapur and Kondapur and surrounding colonies. "If the house owner himself occupies the house, 30 per cent of the total tax will be waived. If the house is rented out there will be no exemption," said deputy commissioner, Serilingampally-I GHMC, P Nagamani. There is no rent control mechanism under GHMC's purview, Nagamani added.

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