For private circulation only Real Estate News Letter 6th April – 12th April 2015 CONTENTS 1. Snapshot 2. Interest Rates 3. Infrastructure 4. Industry News 5. Private Equity News 6. Regulatory Buzz 7. Public Markets 8. Land 9. Residential 10. Commercial/ Retail 11. Township 12. SEZ 13. Hospitality 14. Input Cost Snapshot WPI-inflation data (primary articles) 8.0% 6.8% Per cent 6.0% 3.7% 3.3% 4.0% 2.2% 2.0% 2.0% 1.4% 0.8% 0.0% -1.0% -2.0% Jul/14 Aug/14 Sep/14 Oct/14 Nov/14 Dec/14 Jan/15 Feb/15 Note : Data indicates inflation over previous year’s month Source : Ministry of Commerce and Industry Trends of FII in equity markets Rs billion 96 100 85 75 56 47 44 50 38 34 50 53 35 25 06/Apr 07/Apr 08/Apr 09/Apr Buy 10/Apr sell Source : NSE 7.0 Trends in Nifty and CNX realty index per cent 6.72 6.0 5.0 4.0 3.0 2.0 1.13 1.0 0.0 0.7 0.63 0.9 -1.0 -1.7 -0.8 0.62 0.02 -2.0 06/Apr 07/Apr Nifty Source : NSE 08/Apr 09/Apr CNX REALTY 10/Apr Interest Rates Banks heed RBI call to cut interest rates State Bank of India (SBI), ICICI Bank Ltd and HDFC Bank Ltd lowered borrowing costs on Tuesday and more banks looked set to follow suit, heeding a call by Reserve Bank of India (RBI) governor Raghuram Rajan. SBI, the country’s largest lender, and HDFC Bank cut their base lending rate 15 basis points, or bps, (or 0.15 percentage points) each and ICICI Bank lowered it by 25 basis points. Earlier on Tuesday, RBI, in its monetary policy review, kept the policy rate unchanged at 7.5%, but mentioned that it was still waiting for its two interest rate cuts this year, by 0.25 percentage points each in January and March, to be passed on by banks to their clients. The tone of RBI’s policy was dovish and accommodative, but by forecasting 5.8% inflation in January 2016, the central bank may have effectively signalled the limits of its monetary easing drive. Adding a 1.5% real interest rate to the inflation, the central bank can cut the policy rate by a maximum of 0.25 percentage points more. Economists and bond markets seem to concur. The bond markets sensed the limited room for further rate action. Yields on 10-year bonds rose to 7.79% from 7.726% before the policy. The Sensex, the benchmark equity index of the BSE, barely budged at 28,516.59 points. The BSE Bankex, a sub-index of bank shares, lost 0.71% to close at 21,206.19 points. Transmitting cuts To push banks into reducing their lending rates soon after a policy rate cut, the central bank proposed changing the way they calculate their minimum lending rate, or base rate. Earlier, banks used to calculate base rate on the average cost of deposit basis but banks are now being encouraged to calculate the base rate taking into account the marginal cost of funds. With every policy rate action, bonds and money market rates move. Banks also lower deposit rates in the shorter tenure and thus the incremental cost of deposits for banks falls. However, the same fall in cost gets nullified when averaged out with longer tenure and older deposits. “Credit growth is tepid, banks are sitting on money and their marginal cost of funding has fallen. The notion it hasn’t fallen is nonsense. It has fallen, they can borrow at the margin today at 7.5%. There is plenty of liquidity in the markets,” said Rajan, lambasting banks for saying that their cost of funds has not dropped enough for them to reduce lending rates. “The methodology doesn’t seem to stand in the way of banks raising base rate when interest rates (policy rates) are raised. It only seems to come in the way when interest rates are cut,” Rajan added. Bankers remained non-committal in an interaction with the media at RBI headquarters in the afternoon and repeated reasons behind their decision not to cut rates so far. By the evening though, things had changed and three top lenders—SBI, ICICI Bank and HDFC Bank—cut rates. SBI’s and ICICI Bank’s rate reduction is effective from 10 April, while the cut by HDFC Bank comes into effect from 13 April. “Basically, we saw it as a rate easing cycle and we wanted to give a fillip to the recovery and boost the credit growth a bit. So we thought it was appropriate to cut our lending rates,” said Arundhati Bhattacharya, SBI chairperson. With three of the largest lenders reducing rates, others will most likely follow, bringing relief to borrowers. Depositors, however, will get lower interest on their deposits as banks have matched the cut in lending rates with a cut in deposit rates as a way to maintain their margins. Live Mint,08 April ‘2015,Mumbai Infrastructure Mumbai Metro III work will start by 2016: Ashwini Bhide Political parties and NGOs are up in arms against the implementation of the Mumbai Metro Phase-III corridor, fearing it will destroy the green cover and make some residents homeless. In an interview with Sanjay Jog, Mumbai Metro Rail Corporation MD Ashwini Bhide spoke on the challenges facing the project. Edited excerpts: Mounting opposition has cast a shadow over the proposed Colaba-Bandra-SEEPZ corridor. Will it delay the project? Although there has been a big debate on a couple of issues concerning the project over the past few weeks, I do not see any uncertainty. The project is a must for the city of Mumbai and we are committed to execute it in time. The tendering process for the civil works is in progress. We are pretty sure that all the issues will be satisfactorily addressed before the contractors are in place and the actual work starts in early 2016. Now the government has announced to form a committee to look for an alternative site for a car depot due to opposition for Aarey colony. Do you expect realignment of the route or a new site? The scope of the committee appointed by the state government includes reassessment of alternative sites suggested for the car depot. It does not necessarily entail change of alignment of the entire corridor. I must mention here that locating the car depot at Aarey was a conscious decision by the state government after assessing the merits and demerits of various options. When do you think would the Metro-III project start, as the government has projected its completion by 201920? Will it go the Metro-II way? In case of Metro-II, there were legal hurdles in conducting car depot operations at the land within the ambit of coastal zone regulation (CRZ) notification. In the current case, we are well within the legal framework. The land at Aery is neither in CRZ nor forest land. Tree cutting is legally permitted within the framework of the Protection of Trees Act. The 30-hectare land needed for the depot accounts for only 2.33 per cent of the land belonging to the Aery colony and 0.25 per cent of the total green cover in that area known as the green lungs of Mumbai. Nevertheless, the concerns of environmentalists will be seriously looked into by the committee. I expect the actual construction to start early next calendar year. The proposed corridor is underground. Is it feasible in a city like Mumbai? Do you think the project can be completed in a time-bound manner? Underground Metro in the city like Mumbai is absolutely feasible. Mumbai is located in the Deccan trap with very good quality basalt rock. Tunnelling at 20 to 25 m below the ground in a rock like this with tunnel boring machines is very safe. The technology is tried and tested across the globe as well as in India. The stations will be done by using cut-andcover method as well as the new Australian tunnelling method. Experienced contractors and general consultants are being deployed for the project. Safety and disciplined construction activities will be given the top priority. Can you provide details with regard to the rehabilitation of project-affected families, especially from Girgaon and Kalbadevi, and also other hutments? Political parties and residents are not yet convinced. Do you hope to bring them on board? Doubts being raised at this moment largely pertain to rehabilitation, open spaces and the car depot location. We have already started communicating directly with the people, with correct information and with a view to clearing their doubts. They are being assured that their concerns have already been factored in while designing the project. Our rehabilitation policy has been publicly announced. Detailed planning will be undertaken to ensure that the legal occupants of private lands are rehabilitated in the same area. We need to rehabilitate approximately 1,750 slum structures by giving alternative accommodation at nearby colonies as per the Mumbai Urban Transport Infrastructure Policy. We also need to rehabilitate about 777 legal occupants of private buildings. About 650 families from 26 buildings in Girgaon and Kalabadevi area also form part of this requirement. We intend to rehabilitate these families in the same area after fulfilling the requirements for the stations. We are in the process of appointing a consultant under the guidance of the state government. We assure that unless we work out a systematic plan for residents’ in situ rehabilitation with necessary approvals, no building will be demolished and no family will be evicted. Business Standard,06 April ‘2015,Mumbai CCEA approves highway projects worth Rs 9,500 crore The government today approved three highway projects worth Rs 9,500 crore in Tamil Nadu and Uttar Pradesh, including those connecting Varanasi -- the Lok Sabha constituency of Prime Minister Narendra Modi. In total..the CCEA today approved the strengthening and widening of 455 kms of National Highways with a total capital cost of about Rs 9,500 crore," an official statement said. The Cabinet Committee on Economic Affairs (CCEA) approved the four-laning of the Sultanpur-Varanasi section of National Highway-56 in Uttar Pradesh with a total cost of around Rs 3,800 crore, it said. "This will substantially upgrade Varanasi's connectivity to Lucknow and other parts of Central Uttar Pradesh," it said. The second project relates to four-laning of the Varanasi to Ghazipur, Gorakhpur and further to Nepal section of National Highway-29 in UP. This is likely to improve regional connectivity and facilitate improved movement of people and goods in the region and across the border. "The four laning of this 200 kms will have a total capital cost of approximately Rs 4,400 crore," it said. The third project relates to four laning/two laning of the MaduraiRamanathapuram section of National Highway-49 in Tamil Nadu. "This work will be under the National Highways Development Project (NHDP) Phase-III for a total length of 115 kms with a total capital cost of about Rs 1,400 crore," it said. The project is likely to be completed in two and half years from the date of award. The pro-active steps will also strengthen the national highways network across the country, especially in regions where there has been a chronic shortfall. The Economic Times,08 April ‘2015,New Delhi Industry News Uber-rich buying luxury apartments in Bandra-Kurla Complex Bandra-Kurla Complex (BKC), one of Mumbai's leading commercial business districts, is now also an enclave where industrialists, high-net worth individuals and some of the biggest names in the corporate world have booked luxury apartments.Property market sources said they have paid between Rs 30 crore to Rs 55 crore for uber-luxury apartments in the BKC. Some of the high-end residential projects here command as much as Rs 55,000 a sq ft. Among those who have booked duplexes here are industrialist Gautam Adani, former Citigroup head Vikram Pandit, Deutsche Bank co-chief executive officer of Asia/Pacific, Gunit Chadha, chairman of JM Financial Nimesh Kampani, Harsh Mariwala of Marico, Jalaj Dani of Asian Paints, Kishore Lulla of Eros International and Ashok Wadhwa of Ambit Holdings. It is also learned that the family of Hitesh Patel, the Surat-based diamond merchant who was the highest bidder for PM Narendra Modi's suit for Rs 4.31 crore, booked an apartment in BKC. Pramit Jhaveri, CEO of Citi India, and Mickey Doshi, MD and country head at Credit Suisse, are among those who have duplexes here. "Most of these ultra high-net worth individuals have bought these luxury pads, not as an investment, but to stay here because of the BKC's strategic location,'' said sources. These are all duplexes in Signature Island, among the three residential projects built by developer Sunteck Realty in the BKC's G Block. These apartments come in two sizes, the bigger ones are 11,000 sq ft while the smaller ones are about 7,000 sq ft. BKC currently has just three residential projects adding up to 220 units. "Most people who work in BKC commute from far-flung suburban areas or central and south Mumbai. In terms of time taken to travel, it can easily mean one to two hours of commute during rush hour. The need to develop high-end homes in BKC and also develop it as a residential destination is imperative. Developers have currently not tapped the full residential demand of the area,'' it said. The report said BKC, once developed as a formidable residential address, can also serve as an alternative to sub-markets such as Worli and Bandra. ``Its central location and proximity to both north and south of Mumbai can draw in crowds and hence help ease urbanization pressure on the mentioned sub-markets.'' The Economic Times,06 April ‘2015,Mumbai Cabinet nod for smart cities soon, roll-out next month: Venkaiah Naidu Urban development minister M. Venkaiah Naidu on Monday said the Cabinet is likely to clear the government’s flagship smart city project soon and it will be rolled out from next month. “The Expenditure Finance Committee has cleared it. It is likely to go to the Cabinet any time this month,” Naidu said at an event organised by CII. “This thing will be approved and it will be rolled from the next month onwards and then the competition, race will start ... cities must qualify themselves (by standards, sanitation, revenue, infrastructure) and once that is done then I will be coming to you (industry) and you will be coming to me and then we have a system, we have open offer,” he said. The Centre will be a facilitator with regard to smart cities and government will do the hand holding, he told the industry promising all support in implementation of projects they identify. Lot of companies are showing interest because now the government has allowed foreign direct investment (FDI), he added. As far as housing for all is concerned, Naidu said the Cabinet has approved it earlier but there was a need for comprehensive housing policy for both urban and rural segments. ‘Housing for All’ scheme targets construction of houses for all by 2022. “Both ministers (urban development and rural development) sat together and then gave inputs to finance ministry and now finance ministry is considering it,” he said. Live Mint,07 April ‘2015,New Delhi Industry News PM Narendra Modi govt amends bill to stamp out ‘black money’ in real estate PM Narendra Modi led union cabinet widened the reach of a bill on Tuesday to regulate the real estate sector and curb undeclared “black money” in property markets that costs the exchequer billions of dollars in lost taxable income. The decision by Prime Minister Narendra Modi’s government to amend the bill, which was submitted by the previous government in 2013 but not passed by the Rajya Sabha, aims to boost investor confidence and stamp out illegal practices in the real estate sector. “The bill seeks to ensure accountability and transparency, which will in turn enable the real estate sector to access capital and financial markets essential for its long-term growth,” the government said in a statement. The amendments approved by the cabinet will bring tougher regulation to consumer protection rules to commercial as well as residential real estate. Vendors in India’s real estate market often demand part payment in illicit cash, making many ordinary people party to corruption and excluding some of the emerging middle class from the market. The new set of laws will allow buyers to approach consumer forums in case of disputes with real estate developers, who will have to disclose all information about the project and comply with funding rules, an official said after the cabinet meeting. The Financial Express,09 April ‘2015,New Delhi Smart cities are the future: Venkaiah Naidu Smart cities are not showpieces but the future of the country as growing urbanisation is a fact of life, according to Urban Development Minister M. Venkaiah Naidu. He was speaking here on Wednesday at a seminar on the future of Visakhapatnam as a smart city, organised by the Vizagpatanam Chamber of Commerce and Industry and the Visakha Smart City Forum. He said smart city had become a buzz word, but it should be understood in its proper perspective. "Smart (efficient) governance, sanitation, a pollutionfree environment, an efficient public transport system and quality civic amenities make life in smart cities comfortable. But building such cities is easier said than done. Political will, admistrative skill, and participation of citizens were required to build such cities. Funds can be found," he said. He said Visakhapatnam would be developed as a smart city along with Ajmer and Allahabad with the technical assistance of the US. He said the Centre was also committed to helping Andhra Pradesh in offering assistance in building the new capital at Amaravati. "The DPR for Vijayawada metro rail is ready and the one for Vizag metro is getting ready. We will give assistance for the projects," he said. He said while the NDA Government was giving all help to the State in its reconstruction efforts after the bifurcation, Congressmen like Jairam Ramesh were making funny statements regarding special status to the State. "He is accusing us of betraying the State. One wonders why the Congress Government did not deem it fit to include special status for AP in the bifurcation bill if they were so concerned about the welfare of the Andhra people," he remarked. The Hindu Business Line,09 April ‘2015 Government aims to make Gurgaon a smart city in six months The government aims to turn Gurgaon into a socalled smart city by the end of this year and wants it to be a model for other such projects in the rest of the country, energy minister Piyush Goyal said on Wednesday. Personally I would love to see it happen in six months,” Goyal told in an international conference, Gridtech 2015, on wedensday organized by Power Grid Corporation of India Limited (PGCIL). It will certainly be achieved by the end of the year, the minister averred. The conference was accompanied by an exhibition of various power projects with participants across India Industry News and 40 other countries. It showcased a model smart city, which was lauded by Goyal as he urged the company and private investors to chalk out a plan to convert Gurgaon into a “pilot showcase” for the government’s smart city initiative. The National Democratic Alliance (NDA) government had last year declared its mission to create 100 smart cities with better technology, superior management and modern governance. The project is likely to be rolled out this month after extensive consultations with stakeholders. Goyal stressed the need to improve the distribution and transmission of power with the objective of last mile connectivity to homes. He asked PGCIL to create an “ambitious grid programme” by 2019 which would take care of the demand for the next 10-15 years. Out of the $50 billion that the government plans to invest in grids, $18 billion is expected to be generated from two schemes in this sector. “We are looking at at least $18 billion support through Deen Dayal Upadhyaya Gram Jyoti Yojna for rural India and Integrated Power Development Scheme for urban India,” said Goyal. While India has an installed power generation capacity of 255,012.79 megawatts (MW), its national grid has an inter-regional power transfer capacity of about 46,450MW, which the government plans to increase to 72,250MW by 2017. Live Mint,09 April ‘2015,New Delhi Can GIFT City be India’s Hong Kong? This Friday, all roads will lead to Gujarat International Finance Tec-City Co. Ltd, also known as GIFT City. Finance minister Arun Jaitley will unveil rules for international financial services centres (IFSCs) at Gandhinagar on 10 April. He will be accompanied by financial regulators and top bureaucrats. The show of strength reflects the government’s support for the project. It appears provisions of the Foreign Exchange management Act (Fema) will not apply to firms residing in the new city. Some expect Jaitley to back this up by announcing tax concessions that will apply only to firms that operate within it. This sounds similar to the one country, two systems of China and Hong Kong, and it is. Can GIFT City be India’s Hong Kong? The financial industry in Hong Kong has been boosted in the past few weeks after China further opened up the Shanghai-Hong Kong Stock Connect that allows investors in each of these markets to trade on the other. Inflows into Hong Kong have ballooned after mutual funds were also allowed to use the channel. If firms in India are allowed to move capital easily to and from GIFT City, the new project will get a great boost. After all, which Indian financial firm wouldn’t want to take advantage of the tax and other concessions on offer? However, the government doesn’t seem to take this approach. Based on the guidelines the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) have released, the same Fema restrictions will apply on Indian residents with regards to their transactions in GIFT City as in any other overseas jurisdiction. All financial transactions in GIFT City will be in nonrupee denominated securities. Why even raise the question then? This is because Indian firms will be the most natural participants in the GIFT City story, although the idea was mooted originally to attract overseas participants. If financial services in the new city don’t pick up, there will always be the temptation to ease restrictions to attract participants, which could perhaps result in a window opening for Indian firms and individuals to participate more freely than they are currently permitted. But as pointed out earlier in these pages (Why not promote international finance at Mumbai?), such an approach will hurt India’s existing financial markets in Mumbai. As things stand, building a robust market mainly from participation by global firms looks like an uphill task. Take for instance the dollar-rupee futures market. Officials from GIFT City have often said India’s loss of market share in this product can be won back with its launch of a dollar-settled version of it. The central bank has been wary of the development of exchange-traded currency markets. Indian firms who were using overseas exchangetraded currency markets are known to have been told Industry News off by the central bank, and Financial Technologies (India) Ltd had been forced to reduce its stake in a Dubai exchange offering a dollar-rupee futures contract. Given the central bank’s unease, global firms may prefer to take their orders to overseas destinations, including the fairly liquid non-deliverable forwards market. Likewise, one of the main reasons global investors love using participatory notes is that it allows them to enter into customised over-the-counter (OTC) derivatives contracts with overseas brokerages. Sebi’s IFSC guidelines are silent on whether OTC derivatives will be permitted. It’s presumed that provisions of the Securities Contracts (Regulation) Act will apply, unless there are specific exemptions for IFSCs, thereby meaning that financial firms may still be unable to offer products they can’t offer in the main shore markets. In order to attract financial market professionals to set up base in the new city, the government will need to provide not only concessions, but also freedom in areas such as product innovations, just as they are used to in international markets. Besides, the new jurisdiction must also have a robust legal system. This is not to dismiss the potential of a well-managed IFSC. However, creating a Hong Kong or Singapore will involve some pragmatic choices and, in the worst case, may involve sacrificing existing markets in Mumbai. Live Mint,10 April ‘2015 Farmers move SC against Land Bill The Government's urgency to re-promulgate the Land Acquisition Ordinance has been called in question by a group of farmers and rural land holders in the Supreme Court on Thursday.In a petition filed by four organisations claiming to be farmer fronts, questions have been raised over the manner in which the law relating to acquisition of farmer lands was deliberately introduced through the Ordinance route by disallowing a debate on the Bill in this regard pending with Rajya Sabha, where the Government does not enjoy a majority.Interestingly, the petition attacks the Ordinance only on the manner of its introduction and reserved rights to challenge it on merits at a subsequent stage. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance 2015 was first promulgated on December 31 and again on April 3 recently. The petition, settled by senior advocate Indira Jaising, highlighted how the case presented a gross abuse of Article 123 which provides President power to promulgate Ordinance when Parliament is in recess. The Ordinance was to lapse on April 5. The Government was aware that the law must get cleared in the present Parliament Session extending from February 23 to May 8 with a recess of one month in between. After the Lok Sabha cleared the Bill on March 10, the Bill was to come up for discussion in Rajya Sabha. But before this could be done, the Rajya Sabha was prorogued on March 28. On April 8, the Parliamentary Bulletin for the remaining Session curtailed the length of Rajya Sabha Session by three days by making it to begin from April 23. The petitioners - Delhi Grameen Samaj, Bhartiya Kisan Union, Gram Sewa Samiti, and Chogama Vikas Kalyan Samiti - suggested that such "Ordinance Raj" is impermissible and an affront to the purpose intended under Article 123. The action by executive to re-promulgate an Ordinance with Parliament in session amounted to usurping the law making power of the Parliament. Hinting at a possible political design, the petition said "Merely because it (Government) does not have numbers in the Rajya Sabha, the executive cannot be permitted to continue the law making exercise by way of an Ordinance." The Pioneer,10 April ‘2015,New Delhi Private Equity News Realty PE firms to double investments this fiscal The improving economy and business sentiment seem to be whetting the appetite of private equity players for a larger role play. Realty-focused PE firms are looking to double their investments this financial year. For instance, real estate-focused private equity firm ASK Property Investment Advisors has committed to invest about ₹1,000 crore this financial year. This is exactly double of the ₹500 crore, the firm had earmarked for last year. “We didn’t commit too much money last financial year, while most of our commitments came during the last quarter of the year, as the direction of the market went from bad to worse. We were waiting for the markets to show more distress and give us money for money deals,” said Amit Bhagat, CEO and Managing Director, ASK Property. In this financial year, the company will continue to invest in residential projects with focus on Bengaluru, Pune, Chennai, Mumbai and National Capital Region (NCR). Milestone Capital Advisors, which invested about ₹500 crore in FY15 across commercial and residential, intends to deploy about ₹800-1,000 crore this year. “The real estate sector is definitely looking up this year, and deployments would depend on the apetite in the market. Both residential and commercial sectors would continue to post growth in this year and there is a lot of interest among high networth individuals to invest in the sector,” said Rubi Arya, Vice-Chairman and Director, Milestone Capital Advisors. For the real estate sector, the high demand continues to flood from the metros, while growth is also coming in from tier-I and -II cities, she added. “Some markets are very interesting such as NCR and Mumbai, and funds are optimistic, even though pricing is still not attractive. In the last 12 months, investors were looking at fresh asset creation rather than refinancing, which was the norm till now,” Ashish Singh, Managing Director (real estate investment), Standard Chartered Private Equity Advisory. “This year, a lot of fund creation is also expected to happen, and with many preferring equity rather than debt structures,” Standard Chartered’s Singh said. ASK Property, which launched a ₹1,500-crore fund last year, will also look at raising funds from offshore markets, Bhagat said, declining to disclose the details of the funds. On its part, Milestone Capital will also do more funds, while many exits are also expected this year. The Hindu Business Line,06 April ‘2015,Mumbai Century Real Estate raises Rs165 crore Century Real Estate has borrowed Rs.165 crore by selling non-convertible debentures (NCDs) and deferred its plans to raise Rs.1,000 crore through an initial public offering (IPO), two people familiar with the development said. Bengaluru-based Century, which has one of the largest land banks in south India, will use the money to develop two projects in the city—Century Ethos, a residential development at Bellary Road, and Century Eden, a plotted development at Doddaballapur. Ethos homes cost Rs.2.5 crore onwards, while Eden plots are priced at Rs.17 lakh onwards. A spokesman for Edelweiss Financial Services Ltd, whose non-banking financial company ECL Finance lent the money, said the money was given as working capital for a couple of projects. “Given the current scenario, when property sales are low, developers are looking to raise cheaper debt or quasi debt through such structured transactions,” said Chintan Patel, partner, transactions and restructuring, real estate and hospitality, KPMG India. NCDs, which offer flexibility and freedom, are a preferred route for developers to raise money, Patel added. Last year, Century had spoken of plans to raise Rs.1,000 crore through an IPO, of which Rs.500 crore would be used to retire debt, while the rest would be used for growth. The company had started the process of appointing bankers, but did not finalise any. This would be the second time Century is postponing its IPO plan, after the initial attempt in Private Equity News 2007, when many developers went public. Century executive director (finance and accounts) Mahesh Prabhu had said in an interview in July last year that the time wasn’t right for the company in 2007, and that there was a lot of consolidation that remained to be done. That seems to be the problem this time around as well. “Century has decided to postpone the plan to go for an IPO plan at least by a year, after discussions with bankers and advisers. Meanwhile, the company will raise money through NCDs,” said one of the people mentioned above who didn’t wish to be named. Unlike the IPOs of 2007, when bankers attached much value to land banks, this isn’t the case any more. “Bankers’ view is to not give much value to land assets but to project cash flows instead. Projects that will bring cashflows within a five-year horizon are considered valuable in terms of IPO valuation, but not beyond that timeframe,” the person cited above said. “Century has decided to focus on project launches over the next year so that good sales come in and then the company is ready for an IPO.” Live Mint,06 April ‘2015,New Delhi Amplus Realty exits Assetz's Bangalore project Lumos with 2x Real estate-focused private equity firm Amplus Capital Advisors has exited its over two-year-old investment in a residential project of Singapore-headquartered real estate developer Assetz Property for an undisclosed amount, the company said in a statement.The investment had gone in a residential project called Lumos back in November, 2012. The project is located at West Bangalore and offers 138 units across 3BHK and duplex apartments. It is slated for completion in 2016. The firm did not share the investment or exit value but said it has clocked an internal rate of return (IRR) of over 35 per cent and a multiple of 2x on its investment. Anuranjan Mohnot, chief executive officer, Amplus Capital Advisors, said, “Bengaluru continues to be a key market for our investments. Since inception, the fund has committed investment in five projects across Bengaluru.” Recently, the PE firm invested Rs 36.8 crore to back an upcoming residential project of another Bangalore-based developer Jain Heights. The investment went to a special purpose vehicle (SPV) to purchase land. Assetz Property has given back-to-back exits to its investors in the recent past. Segregated Funds Group, the private equity arm of real estate consultancy firm JLL, recently partly exited its first investment through its maiden in a residential project of the developer. It had clocked an IRR of 30 per cent. Another real estate private equity firm Avenue Venture Partners recently exited its two-year-old investment in a project of the developer clocking an IRR of 33 per cent in a span of two years. Assetz has so far completed seven private equity exits/part-exits including the exit given to Amplus Realty. The developer has a project portfolio of 3 million sq ft under construction, 1.2 million sq ft to be completed in the next 12 months and completed and delivered projects covering 3.5 million sq ft. It recently raised Rs 720 crore from Asia-focused investment firm Equis Funds Group for infrastructure developments of mid-income housing projects.Amplus is currently deploying funds from its maiden fund and is giving the finishing touches to its plan to raise an offshore fund. The PE fund focuses on city centric high-end or mid-market residential development projects across cities in India. VCCircle April 6,2015 Piramal in talks to raise $300-m offshore fund Piramal Fund Management (PFM), part of the Ajay Piramal-owned Piramal Group, is in early talks with sovereign and pension funds to raise a $300-350 million (up to Rs 2,200 crore) offshore fund on the private equity (PE) platform. This is separate from the $150 million that Piramal is in the process of raising from overseas limited partners (LP) as part of its offshore fund-raising. Of the $150 million, the company has already raised $50 million from LPs. Private Equity News Khushru Jijina, managing director, Piramal Fund Management, told Fe that the strategy will ensure capital availability for a longer duration as he was expecting a revival in demand for equity investments by realty developers. “We are looking at this mainly for having long term 8-10 year money,” Jijina said. In February 2014, Piramal signed a joint venture for $500 million with Canada Pension Plan Investment Board (CPPIB) to offer rupee debt funding to residential projects in Mumbai, Delhi, the National Capital Region, Chennai, Pune and Bangalore. Both the entities made an initial commitment of $250 million each. In FY15, 85% of PFM’s loan book was committed as debt and equity investments were in the range of 1015%. PFM closed FY15 with a loan book of Rs 4,400 crore, which grew more than two-fold from Rs 1,900 crore in FY14. However, Jijina said the firm expects the portion of equity investments to rise up to 40% in FY16.Originally, Indiareit, as the PE platform of Piramal was called, had a target of raising $500 million through an offshore fund. The target was later pruned to $350 million and thereafter to $250 million in the early part of 2014. It was again cut to $150 million in the latter half of last year.Foreign investors’s apathy towards India has seen little overseas money getting raised by Indiafocused real estate funds in the last few years.Economic uncertainties, policy paralysis, few exits and a weakening rupee kept overseas investors at bay. Meanwhile, during the year, Piramal plans to raise its second redevelopment fund worth Rs 500 crore, Mumbai Redevelopment Fund II, from domestic investors, as it did in its first redevelopment fund raised in 2013. PFM is the integrated entity formed last year after Piramal Enterprises’ financial services arm, Piramal Capital, combined Indiareit and its real estate and allied sectors’ focused NBFC under a single vertical. This entity is now mandated to invest in real estate across the capital spectrum through private equity, structured/mezzanine equity, structured debt, senior secured debt and construction finance. The Financial Express,07 April ‘2015,Mumbai Motilal Oswal AMC launches offshore hedge fund, to raise $100M by December Motilal Oswal Asset Management Company Ltd (MOAMC) has launched an offshore hedge fund christened India Zen Fund through its Mauritius domiciled investment management company Motilal Oswal Asset Management (Mauritius) Pvt Ltd, according to a press release. It aims to raise $100 million by December 2015. India Zen Fund, a longonly-bottoms-up approach equity fund, would specialise in investing in Indian mid-cap securities with a private equity style diligence approach, it said. “Currently we are selectively looking only to raise the initial seed monies from certain large global asset allocators based out of US and Europe and are already in discussions with a few investor groups. The fund is targeted towards global institutional investors like pension funds, endowments, family offices that are looking for steady returns over a longer period of time,” said Ankit Bengani, head – international business, Motilal Oswal Asset Management Ltd. The fund will invest in companies having a market capitalisation between $100 million and $3.5 billion and would seek to build a concentrated portfolio of maximum 20 stocks with a buy-and-hold strategy, the company said in the release. MOAMC, the investment manager to Motilal Oswal Mutual Fund, was incorporated on November 14, 2008. It is a fullyowned subsidiary of Motilal Oswal Securities Ltd. Its total assets under management (AUM) are a little over $900 million across different products as on March 31, 2015. VCCircle, 09 April ‘2015,New Delhi Regulatory Buzz No circle rate hike in Gurgaon, govt hopes for realty revival The Haryana government has decided not to increase circle rates in Gurgaon for 2015-16, hoping it will help revive activity in the realty market that has been flat for a while. It's the first time in six years, since the 2009-10 fiscal, that circle rates the minimum registration price of a property has not been hiked. District revenue officer Ajit Singh said, "Circle rates are already quite high in urban areas. It was decided to keep the rate unchanged to invite more homebuyers to the city." A committee comprising revenue department officials and headed by the deputy commissioner had recommended to the state government that circle rates in Gurgaon should not be increased. Usually, circle rates appreciate 10-15% every year. Realty watchers said this would encourage people to invest in Gurgaon. Developers, too, welcomed the decision. Rajesh K Gouri, vice-president (marketing and sales), Homestead, said, "The real estate market is going through a sluggish phase. If circle rates were to be hiked, it would have further affected activity in this sector. This move will help the market recover. Increasing rates would have resulted in revenue gains but transactions would have come down. It would also result in buyers avoiding registrations." The circle rate for agricultural land in some villages have been increased, the revenue officer said. Times of India , 05 April 2015 Govt approves regulator for realty sector The Union government has finally approved the setting up of a regulator to protect homebuyers and improve the credibility of the real estate sector in a move towards ridding India of the tag of being one of the world’s least transparent property markets. The cabinet on Tuesday approved the amendments to the Real Estate (Regulation and Development) bill, 2013, to create a uniform mechanism across the country. regulatory “On becoming an Act, the Real Estate (Regulation and Development) legislation is expected to give a boost to the ‘Housing for All by 2022’ mission by enabling increased flow of investments through enhanced transparency, accountability and standardization,” the ministry of housing and urban poverty alleviation said in a statement. The cabinet has extended the applicability of the bill to commercial real estate as well. In order to ensure that customer advances are used only for project construction, promoters will also be required to deposit 50% of the amount collected from homebuyers in a separate account with a scheduled bank within a period of 15 days. Ongoing projects that have not received completion certificates have been brought under the purview of the bill, and such projects will need to be registered with the regulator within three months. Promoters will not be allowed to change plans and structural designs of a project without the consent of two-thirds of consumers. This will also curb the practice of setting unrealistic targets by developers and make them more reasonable in terms of project execution and delivery. Among the other new stipulations approved by the cabinet, states have to make rules within one year and put in place a web-based online system for submitting applications for registration of projects, and the regulator has to decide cases within 60 days. Real estate developers, both in the residential and commercial sectors, will be required to register their projects with the regulatory authority. Promoters will have to disclose all information regarding ownership, project plan and layout, development schedule, land status, status of statutory approvals, proforma agreements, names and addresses of real estate agents, contractors, architects, structural engineers and so on. Regulatory Buzz Penal provisions include payment of 10% of project cost for non-registration and payment of another 10% of project cost or three years of imprisonment or both if still not complied with. For wrong disclosure of information or for failing to comply with the disclosure norms and requirements, a penalty equal to 5% of the project cost will be imposed. Regulatory authorities can also cancel registration in case of persistent violations. Real estate agents will also be punished for non-compliance of the orders of the regulatory authority and appellate tribunals to be set under the proposed law. For fasttrack dispute settlement, one or more adjudicating officers will be appointed to settle disputes and impose compensation and interest. Live Mint,08 April ‘2015,Bangalore Vacate flats, court tells 21 housing society residents opposing redevpt The Bombay HC has ordered 21 flat owners of a housing society in Oshiwara to vacate their apartments in 60 days to make way for the redevelopment of the building. Justice S C Gupte said that if the families refusing to vacate within the stipulated time, a court receiver would be appointed to take possession of the flats and even seek police assistance if needed. The court was hearing an application filed by Supreme Mega Constructions, which had been appointed by Symphony housing society in Oshiwara to carry out redevelopment of its property. The court rejected the plea of the 21 residents who had refused to move out, citing some clauses in the development agreement. "The balance of convenience is in favour of the (developer), the society and its overwhelming majority of members who want the building to be reconstructed," said the judge. The HC pointed out that the builder had spent substantial sums to start the project—it had paid Rs 1 crore towards conveyance of the land and existing building, Rs 50 lakh to the society towards security deposit and over Rs.5.31 crore to the society members towards various compensations and spent various sums for preparing and having the plans of the new building approved. "The (opposing flat owners) do not oppose the redevelopment, but merely have reservations about certain clauses of the development agreement and the permanent alternative accommodation agreements," added the court. Symphony society is spread over 2,997 square metres and its 68 residents own the 72 flats and 19 garages in the building. Society members had agreed to redevelop its property and appointed the developer in 2011. Around 64 members signed and approved the development agreement. The builder moved the HC after the 21 members refused to comply. The opposing residents disputed that the agreements had been approved in the special general meeting and produced video recordings claiming that the records of the meeting were fabricated. They alleged that the development agreement was not in accordance with the tender conditions and that conditions had been violated. "Merely on the basis of a purported video CD of the proceedings of SGM, the recorded minutes of the meeting, which the society stands by,0 cannot be disregarded at this interim stage," said the judge. The Times of India,08 April ‘2015,Mumbai Public Markets DLF to cut debt by Rs 2,800 crore by March next year: Crisil Realty major DLF will reduce its net debt to about Rs 17,500 crore by March 2016, from Rs 20,300 crore at the end of 2014, as company plans to raise funds through various routes to cut borrowings, rating agency Crisil has said. The rating agency removed its 'negative watch' from DLF's bank facilities and debt instruments, following the Securities Appellate Tribunal (SAT) order last month quashing the 3 year market ban imposed on DLF by markets regulator Sebi. Crisil had placed its DLF ratings on "watch with negative implications" in October 2014 following the Sebi order. However, the rating outlook on the long term facilities remains 'Negative'," Crisil said in a note filed by DLF to the stock exchanges.The 'negative' outlook is because of high debt level, weak operating cash flow and residual uncertainty over regulatory issues, the rating agency added. Crisil, however, said that SAT's favourable order would enable DLF access capital markets and would support its financial flexibility. "DLF plans to raise over Rs 2,500 crore through fresh issue of equity shares and real estate investment trusts (REITs) over the medium term," Crisil said. The agency believes that "DLF will reduce its debt (net of liquidity) to around Rs 175 billion as on March 31, 2016 from Rs 203 billion as on December 31, 2014". DLF had a net debt of Rs 20,336 crore at the end of third quarter of 2014-15 fiscal.Crisil said it would continue to monitor progress of DLF's debt reduction plan, improvement in operating cash flows and outcome of regulatory issues.DLF is the country's largest real estate firm with a land bank of about 300 million sq ft, of which about 50 million sq ft is under construction. The company has a rental income of over Rs 2,000 crore annually. The Economic Times,10 April ‘2015,New Delhi Land Ascendas Close to Buying Nerolac's Chennai Land Rane Group sells Chennai land parcel Indian property trust of S'pore fund emerges frontrunner for deal that is valued at Rs 440 cr; other bidders include RMZ & a Chennai developer .Ascendas India Trust (a-iTrust), an Indian property trust managed by Singapore-based Ascendas Property Fund Trustee, is close to buying 15.86 acres of land from Kansai Nerolac Paints in Chennai in a deal valued at Rs. 440 crores. The Nerolac had used the land in Perungudi on the Old Mahabalipuram Road to house its manufacturing operations at one of total five such factories across the country, people familiar with the development said. The company had shifted its manufacturing base to Hosur near Bengaluru after the unit closed down over a decade ago. Auto components maker Rane Group has sold a sixacre land parcel in Chennai for ₹75-80 crore, according to sources. Casa Grande, a city-based developer, recently acquired the land parcel located in the southern part of the city on the Grand Southern Trunk Road. The price at about ₹12.5 crore an acre is an attractive value under the current slow market conditions in the predominantly middle-income residential area, according to experts. Casa Grande is looking at residential development along with some commercial space, say sources in the know. The components maker has also put a four-acre plot in Velachery in south Chennai on the block. It had called for bids through an international property consultant last year, but the bidders had not matched its price expectations. “The land falls under industrial zone.Ascendas is the highest bidder as the base Rs. 430 crore,“ said one of the persons, who did not wish to be identified. “Ascendas continuous ly reviews and assesses potential new acquisi tions in line with its stated growth strategy in India. We do not com ment on market specula tion and will, at the ap propriate juncture, announce any material an Ascendas spokesper development,“ an Ascendas spokesperson said in an email response. Other builders, who were in the race for his deal, include RMZ and a Chennaibased local developer. “The highest bid der is expected to submit the money by Friday . The property is likely to be bought by Ascendas unless another bidder submits a higher bid,“ said another person. Ascendas is planning to build a mixed development project, including IT and residential components on this plot. Sources say Casa Grande is in advanced stage of talks with a large infrastructure company for buying a six-acre property at Manapakkam, another southern suburb of the city. There has been a spate of land deals in the city with the corporate sector cashing in on the high land valuations. Recently, two companies in the Murugappa Group sold residential property in Kotturpuram for about ₹147 crore. On the Old Mahabalipuram Road, popularly referred to as an IT corridor, a 20-acre plot was sold in three separate deals at ₹12 crore to ₹18 crore an acre. Towards the end of last year, Binny Ltd announced plans for joint development of 70 acres in North Chennai, while the company’s promoters sold 12 acres for over ₹266 crore in a western suburb. The Hindu Business Line,09 April ‘2015,Chennai Nerolac Paints is a subsidiary of Japanbased Kansai Paint which is engaged in industrial, powder and automotive coating business. The Mumbaiheadquartered company is the largest industrial paint company and second-largest decorative paint company in the country. The Economic Times,07 April ‘2015,Mumbai Residential RPS launches ‘Plateau Greens The RPS Group recently unveiled low-rise ‘Plateau Greens Residencies’ for home-buyers in the Delhi/ NCR region. In a bid to cater to the needs of all categories of buyers, particularly those currently living in a rental accommodation, RPS has come out with a buying scheme which allows those booking a flat in the project to move into a rental-free accommodation in their already developed projects namely — Savana/ Palms in RPS City (Faridabad) till they get possession. Giving details of this unique scheme, Pradeep Seth, Group CEO said, “Having booked their flat, buyers often get over burdened as they have to pay EMIs over and above their house rent. With our ‘Book a Home to Move-in a Home’ scheme, we are easing the financial burden of our customers by offering them a rental-free accommodation. RPS Plateau Greens Residencies offers a total of 140 low-rise units with lifts, 24-hour 3-tier security with state-of-the-art surveillance systems etc. The project is strategically located in the heart of the NCR on National Highway-2, Mathura Road, (at the tip of South Delhi). The apartments are priced at Rs65lakh. The Tribune,06 April ‘2015,New Delhi M3M launches 'beach inspired' luxury project in Gurgaon NCR-based real estate player M3M India on Thursday launched a luxury project 'M3M Marina' to be built in Gurgaon. The project, based on a nautical theme, will have 914 housing units spread across high rise residential towers. The total cost of the project is Rs 1,500 crore, the company said. It will be designed like a sea-side Marina to give the buyer a feeling of living by the bay. Pankaj Bansal, Director-M3M India, said, “M3M Marina is developed to cater to urban upmarket residents with a taste for the high life.“ The project also houses recreational facilities for kids like parks, a cricket pitch, bicycle track, tennis court, library and banquet area, music hall and a squash court as well. The Hindu Business Line,10 April ‘2015,New Delhi Commercial/ Retail No news in this section for the week Township Second phase of Palava City project to commence soon Palava City, the integrated smart city being developed by the Lodha group, is set to complete the phase one project by December as it plans to commence works on the development of phase two spread over 900 acres. Shaishav Dharia, Development Director of Lodha Group, said, “The phase one of the project, which has thus far seen total investment of Rs. 6,000 crore (about $1 billion) is expected to completed by December this year. The phase one spread over 250 acres with over 1,900 houses would be fully completed. This is part of the 4,500-acre Palava City project taken up by the Group.” Speaking to Business Line on the sidelines of an event hosted here on Smart Cities, Dharia said the second phase would be completed over the next 10 years and will have more than 60,000 housing units and about 5 million sq.ft of commercial space. It is programmed for investments to go up Rs. 25,000 crore. “We have been rated amongst three smart cities which have come up and in Palava City more than 5,000 families have been already living and experiencing a smart city environment supported by technology solutions provided by IBM, GE among others. The land acquired by the Lodha group in late 1990 is one of the biggest such projects in the country and close to a metropolitan city and proposed new international airport,” he explained. Mentioning about the Modi Government push to the smart city projects, he felt that over the next year or so, various elements and modalities for smart city projects would come together, which would enable integrated development of new cities. But the biggest issue is to get a land of this size at one place to develop a smart city, he felt. With the smart city concept and discussions around it gathering pace, he felt that a project like that of Palava City could potentially serve as a template for other projects. The Hindu Business Line,10 April ‘2015 SEZ SEZs see up to Rs 2,500-cr boost from trade policy foregone might exceed Rs 2,000 crore to Rs 2,500 crore if subsidies are calculated based on 5 per cent of duty scrips. The government is likely to forego revenue to the tune of Rs 500-2,500 crore by way of incentives given under Merchandise Exports From India Scheme (MEIS) and Services Exports From India scheme (SEIS) to units located inside special economic zones (SEZs) under the new Foreign Trade Policy (FTP) 2015-2020. The Foreign Trade Policy 2015-2020, unveiled on April 1, gave a breather to ailing SEZ units by bringing them under the newly introduced MEIS and SEIS incentive programmes. However, according to experts, this will mean an additional revenue impact on the government, which is already reeling under resource constraints, over and above the existing quantum of revenue foregone. Currently, there are 199 operational SEZs having 3,937 units located in them. The total exports achieved by these units stood at Rs 3,48,584 crore during April-December 2014-2015, according to latest data from the Ministry of Commerce and Industry. “The tax burden is going to be substantial. It is going to be more for goods exports compared to services,” said P C Nambiar, chairman, Export Promotion Council for EOUs and SEZs (EPCES). However, the industry feels that the increase in subsidy outgo will not be much of a concern for the present government. “Increase in the subsidy bill should not be a major concern as Indian exporters are at a disadvantage on many fronts vis-àvis their competitors from other countries. These incentives are to offset infrastructural inefficiencies and other cost disadvantages,” said Ajay Shriram, president, Confederation of Indian Industry (CII). Under the two new schemes – MEIS and SEIS – exporters will be allowed rewards for export of goods given as a percentage of realised free-on-board (FOB) value. The rate of these rewards, given in the form of duty scrips, will be 2-5 per cent. Similarly, under the Served From India Scheme (SFIS), the rate of rewards will be 3-5 per cent. These sops or duty scrips were not given to SEZ units earlier. “As a result of benefits given under both the schemes (MEIS and SEIS), the revenue forgone will be in the range of Rs 500-2,500 crore in a financial year,” said an official on condition of anonymity. The actual revenue forgone by the government on account of tax incentives for export profits of SEZ units in the financial year 2013-2014 stood at Rs 17,036 crore, higher than the projected revenue impact of Rs 14,992 crore. In financial year 2014-2015, it is estimated that total revenue foregone on account of sops given to SEZ units would reach Rs 18,393.70 crore. According to the finance ministry, the actual impact is going to be “even higher”, said the statement on revenue forgone. According to Amit Kumar Sarkar, partner, Grant Thornton India LLP, the revenue Minister of state (independent charge) for commerce and industry Nirmala Sitharaman has said the proposal to remove minimum alternate tax (MAT) and dividend distribution tax (DDT) on SEZ developers and units is still lying with the finance ministry. “It is suggested that the rate of MAT should be reduced to its original rate of 7.5 per cent, which can be done through a notification, so that the government gets revenue in time and the SEZs are able to set off the advance tax MAT paid within the stipulated period. Reduction or removal of MAT will help in growth of SEZs. For reduction of tax rate, no approval of Parliament is required,” Nambiar said. According to Sarkar, the incentives given to SEZ units under the new FTP are not lucrative enough for investors to stay invested in SEZs despite the fact that SEZs are entitled to duty-free imports and income tax benefits. Although the government has maintained that both MEIS and SEIS benefits will be given to SEZ units, the policy fine print states that these are eligible for SEIS incentives, according to the ineligible categories under section 3.09 II (e). Hence, if only the MEIS incentives are taken into account then the total export subsidy burden of the government is expected to be benign. “The MEIS burden will not be much as the petroleum sector, which contributes to sizeable exports of SEZs, besides IT and ITeS, will be outside the purview of MEIS. By a rough estimate, the burden on the SEZ exchequer on account of MEIS benefits to SEZs is expected to be between Rs 500 crore and Rs 600 crore,” said Ajay Sahai, CEO and director general, Federation of Indian Export Organisations. SEZs contribute almost 25 per cent of the country’s total exports. Total exports from SEZs stood at Rs 3,48,584 crore during April-December 2014-15, declining 7.61 per cent from the corresponding period in 2013-14. In 2013-14, exports from SEZs stood at Rs 4,94,077 crore. After cancelling almost 67 SEZs, the SEZs that have received formal approvals so far are 436, of which 347 are notified and will be operational soon. Business Standard,06 April ‘2015,New Delhi Kandla Port Trust plans 5K-hectare SEZ India’s leading port authority Kandla Port Trust (KPT) plans to develop a Port-based Multi-Product Special Economic Zone (PBMPSEZ) in an area of 5,000 hectares in Kandla and Tuna. Of the 5,000 hectares, 3,600 hectares would be located at Kandla and 1,400 hectares at Tuna port, near Kandla. “We seek to develop a Renewable Energy Park covering an area of 1,000 ha. The remaining 2600 ha land would be used by green, non-polluting manufacturing industries. On the other hand, the Tuna region would focus on establishing a ship-building and repair facility along with several ancillary units to support the activity,” KPT Chairman Ravi Parmar stated in a press communique on Monday. To be set up next to Kandla Port, the project has already received Formal Approval from the Ministry of Commerce and Industry, and is likely to be one of the biggest port-based SEZs by public sector in the country. The proposed PBMPSEZ is in addition to existing 310hectare Port of Kandla Special Economic Zone (KASEZ). KASEZ was the first special economic zone to be established in India and Asia in 1965. Kandla is also the first Export Processing Zone in India. The Port of Kandla is India's hub for exporting grains and importing oil and one of the highest-earning ports in the country. Kandla Port has retained its top position among the country’s Major Ports for the six consecutive years in a row, attaining 87.005 million tonnes mark in 2013-14, utilising 90 per cent of its cargo handling capacity of 96.62 million tonnes. Major imports from Kandla include petroleum, chemicals, iron and steel, and iron machinery. It also handles salt, textiles and grain. On the other hand, Tuna Port is run and managed by KPT. It is being developed as a satellite port and is crucial for Kandla Port’s survival in wake of stiff competition from the newly-developed privately-owned Mundra Port, run by the Adani Group. Tuna Port is the second port after Vadinar Port to be developed by KPT. On the SEZ front, Kanlda Port has already floated Global Expression of Interest for the proposed SEZ project and received more than 25 EOIs from leading players in renewable energy, desalination plant and free trade warehousing zone. As per the website of the Ministry of Commerce and Industry, India has 199 operational SEZs, of which, 17 are located in Gujarat. Deccan Herald,07 April ‘2015,Ahmedabad Hospitality Carlson Rezidor to add over 50 hotels in India in 5 years On an ambitious expansion spree, global hospitality major Carlson Rezidor Hotel Group plans to have over 170 hotels across the country within 5 years under its various brands, including Radisson and Park Inn. The company has set a target of having a hotel in every major city in India with a landmark property in every state capital."We plan to extend the number of our hotels in India to over 170 within next five years. We currently have 117 Carlson Rezidor hotels in operation and under development across 45 cities in India," Carlson Rezidor Hotel Group South Asia Chief Executive Officer Raj Rana told PTI. The company has established a nationwide presence that has been built upon a deep understanding of this key market and it will further extend it's brands and geographic presence, he added. Commenting on the company's ambition in India, Rana said: "We intend to have a hotel in every major city in India with landmark hotels in every state capital." The hospitality chain plans to continue to work with existing strategic partners as well as forge new partnerships to develop scalable opportunities for growth, Carlson Rezidor said, adding that it intends to grow its India platform by way of management, selective franchising and conversions. For the rest of 2015, Carlson Rezidor expects to open eight to nine hotels and sign 12-15 new hotels in cities throughout India," it added. The company's current brand portfolio in India includes brands such as Radisson Blu, Radisson, Park Plaza, Park Inn by Radisson and Country Inns & Suites By Carlson brands. As part of its growth strategy in India, Carlson Rezidor is broadening its brand presence with the introduction of Radisson Red and Quorvus Collection, the company said in a statement. While Radisson Red is an upscale lifestyle elect brand Quorvus Collection is a luxury brand. Carlson Rezidor Hotel Group's current portfolio includes more than 1,350 hotels in operation and under development with a footprint spanning over 105 countries and territories. It owns global brands such as Quorvus Collection, Radisson Blu, Radisson, Radisson Red, Park Plaza, Park Inn by Radisson and Country Inns & Suites By Carlson. The Economic Times,07 April ‘2015,New Delhi Marriott set to open 52 hotels in 4-5 years Marriott International Inc, one of the world’s largest hotel chains, is set to add 52 properties in India over the next five years to cater to the burgeoning demand for quality hotel stay. Through its partners, the USbased company is adding 10,000 rooms to its existing 7,000 rooms. Arne M Sorenson, president and Chief Executive Officer (CEO) of Marriott International, said: “Today, 57 per cent of our guests in India are Indians compared to 35 per cent five-to-six years ago. Today, we have 28 properties in India, but we would like to have a few hundred. We see many more opportunities. The past few years have been tough, but there is enormous potential to grow here”. Sorenson was in the city to officially open Mumbai's second JW Marriott. Marriott has one of the biggest basket of brands amongst the large hotel chains. Of the company’s 19 global brands, seven are already present in India. To complement JW Marriott and Ritz Carlton, there are plans to bring BVLGARI, its most expensive brand, to the Indian market. “We only have half-a-dozen BVLGARI properties around the world and one is coming up in the Maldives. These are smaller properties compared to, say, a Ritz Carlton. There are four-five cities in India which can support a true luxury brand such as BVLGARI,” added Sorenson. In the past five to six years, Marriott has added five brands to its kitty. These brands, which include Moxy and Autograph Collection, form a part of the Lifestyle Collection. According to Sorenson, some of these brands have a better prospect in India than China. “In China, they still follow traditional luxury. That is why India has a better position to host such lifestyle brands,” added Sorenson. Hospitality One of the other brands that will get a boost is the upmarket brand Fairfield. With one property operational in Bengaluru, 15 more are under development. Against the management route followed by the company in all its brands, Marriott has invested $30 million to set up Fairfield properties, which will be built through a joint venture with SAMHI Hotels. Marriott controls 26 per cent of stake in the joint venture. In addition, premium brand Ritz Carlton, which has one operational property in Bengaluru, has two properties (one each in Mumbai and Delhi) under development. Courtyard by Marriott has 12 operational properties and 18 are under development. Five years ago, Marriott had declared plans to have 100 properties by 2015 with an intermediate target of reaching 41 properties by 2013. Sorenson agrees there has been a delay. “In a city like Mumbai, it takes 70-100 permits to open a new property compared to six in Singapore. This leads to cost overruns and delays,” added Sorenson. Marriott is not the only company which is running behind schedule. Starwood, Hilton, Intercontinental, Jumeirah, Four Seasons and Hyatt, to name a few, are unable to keep pace with their earlier announcements. Business Standard,10 April ‘2015,Mumbai Input Cost No news in this section for the week Disclaimer The information carried by the articles in this newsletter has been gathered from various reports published in newspapers and magazines. ASK Property Investment Advisors has reproduced the articles and reports verbatim. 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