Chennai real estate has suffered a major jolt as three of its leading builders, DLF, Hirco and Hiranandani, have been removed from the builders’ body, the Confederation of Real Estate Developers’ Association of India (CREDAI ). Yet another major builder, Vijay Shanthi, has opted out of CREDAI membership on its own. Trouble is brewing in CREDAI’s Karnataka unit too, where four builders have been expelled.
By: Sameer Gholve, Manager – Capital Markets, Jones Lang LaSalle…
Ravi Sinha: To sum up the discussion, what kind of funding do you see emerging in the coming year?
It is a highly disappointing budget. The Finance Minister has miserably failed in highlighting the importance the role of Housing in economy, employment generation, apart from the very need of housing. The announcements on ECB for affordable housing is a minor respite but still meaningless.
Residential property buyer sentiments in Hyderabad have improved considerably over the last three quarters. There has been a gradual but certain increase in residential demand and absorption. That said, the market is still a long way from touching the 2007- 2008 levels.
Hyderabad continues to be a favoured destination for investments due to its unique infrastructure, and real estate prospects are promising despite the Telangana agitation.
The implementation of the revised DTC will have strong implications on SEZs. The industry requires clarity on the issues that may emerge, and how businesses would be promoted in Special Economic Zones.
With benefits under STPI scheme gone and deadline to fully avail SEZ benefits set for March 2014, demand for SEZ space is expected to witness some momentum in 2012.
One of the biggest problems afflicting the sector is its high level of debt. The debt load of 11 listed real estate companies stands at Rs.38,500 crore.
DLF has informed the Bombay Stock Exchange that it has received the first tranche of Rs.200 crore from IDFC, which is in the process of acquiring 100% shareholding in a JV company of DLF called Galaxy Mercantile.