Real Estate market in India and Unitech's Coup!

Last updated on: June 4, 2006 at 12:53 pm by Desh Kapoor

Real Estate market in India and Unitech's Coup! 2006-06-04T12:53:00-05:00 Desh Kapoor

LOGO Patheos Explore the world's faith through different perspectives on religion and spirituality! Patheos has the views of the prevalent religions and spiritualities of the world.

Unitech has bought 345 acres of prime land in Noida for a staggering Rs 15.82 billion. This is fairly bold when you consider the total size of Unitech itself is Rs 16 billion! For this deal they beat the No. 1 DLF to the post. The major plus of this land is that it is just 15 minutes from the posh Maharani Bagh in New Delhi. They will make 4000 top-of-the-line apartments at Rs 2 crore each!

Although the markets in India – specially the real estate – seem to be booming, it might be a speculative bubble. As one analysts said that only 25-30% of the residential property is inhabited – the rest is part of the speculation activity. Almost 75-80% of Unitech’s invetsment is hitherto in residential type properties – which might create issues for it in future if the market tanks. However, since the builder can finance 50% of the project cost through advances from the future residents, the IRR is twice that of Commercial Property!

Unitech is however build “land banks” across the country – with a total of 8000 acres across Gurgaon, NOIDA, Kolkatta, Kochi, Hyderabad, and Chennai!

Unitech is also aggressively entering other areas of the realty market. It is setting up two amusement parks in Rohini and NOIDA. It is going to franchise the Cartoon characters from Cartoon Network and Pogo. It is also planning to set up Marriott’s Courtyard brand of hotels across the country. It will require Rs 700 crores of investment.

The group plans to use Realty Funds in the US. Why? This is why:

Using realty funds to raise money is standard practice in the US. The advantage is that you can draw the money only when you require it, and the payback time is after seven years. In case of public equity, you need to service the entire money you have raised from day one.

The property market in the country is zooming and booming! The builders all over the country are busy buying up land in unprecented numbers. Here is a list of who is buying what:

The Sahara group owns 19,000 acres across the country. Of this, a sizeable amount is held by the highly touted Amby Valley project on Mumbai’s outskirts, where it has over 8,000 acres of land. The company is selling luxury apartments and chalets in this space.

DLF has a land bank, which is in various stages of acquisitions of over 4,270 acres of land. And it is valued at over Rs 80,000 crore (Rs 800 billion).

Unitech has built a land bank of over 8,000 acres across the country, which is valued between 75-125 per cent of DLF’s valuation.

Delhi-based Ansal has built a land bank of over 4,000 acres, which includes Gurgaon, Ghaziabad, Lucknow, Karnal, Meerut and Agra. It expects the land bank at current prices to have a value of Rs 10,000 crore.

The Vatika group has been the new kid on the block in Gurgaon, and has a land bank of 3,000 acres, of which a third is in Gurgaon and the rest in Jaipur and Sohna.

Industry estimates suggest the Hiranandani group has 4,000-5,000 acres across the country. In terms of value that could be pretty high.

Mumbai-based Housing Development and Infrastructure, which struck a deal with the Adanis for developing 48 acres in Mumbai’s Bandra-Kurla complex for Rs 2,250 crore (Rs 22.5 billion), has enough land to create 40 million square feet of space.

The big boys in the south include Brigade, RMZ, Mantri and Sobha Builders. According to industry experts, the prominent developers in Bangalore together control 2,000-3,000 acres.

Business

India

Previous Post

June 3, 2006

Brain Drain or Brain in a Drain??

Next Post

June 4, 2006 Enemy

Browse Our Archives

Select a Category Aarti Achievement and Leadership AfPak Africa Annual and Year-end Asia Audio Australia Behavioural Sciences Bhagwad Gita Bhagwad Gita Blogging Blogs Business Business Intelligence Business Strategy Cannes Careers Chanakya China Conservation Corruption Creative Daily Links Desh Poems Development & Welfare Devotional Audio Devotional Songs Drama Earth Economics Education Entertainment Environment Europe Everyday Quotes Featured Articles Featured Songs Finance Flickr Pictures Food Geo-Political Global Warming Globalization Health & Medicine Hinduism Historic History Humour India Indian Culture Indian music Indian Weddings Israel Issues Legal Link Love Minorities Misc Motivation and Personal Development Movie Lists Movie Reviews Movies Mumbai terror attacks Natural Disasters Nature News Outsourcing Pakistan Parenting Personal Philosophy Poetry Politics Poverty Quotes Recipe Regular Blog Post Relationships Religion Religious/Spiritual Audio Sciences Showcase Slideshow South Asia Special Stories Spiritual Quotes Spirituality Sports Stories Strategy Technology Technology Terrorism Travel Uncategorized US Video Women Women_s Rights Worship Yoga

Select a Month December 2015 November 2015 October 2015 September 2015 August 2015 June 2015 April 2015 March 2015 February 2015 September 2014 August 2014 January 2014 November 2013 October 2013 September 2013 August 2013 July 2013 June 2013 April 2013 March 2013 February 2013 January 2013 December 2012 November 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2011 April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 October 2010 September 2010 August 2010 July 2010 June 2010 May 2010 April 2010 March 2010 February 2010 January 2010 December 2009 November 2009 October 2009 September 2009 August 2009 July 2009 June 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008 November 2008 October 2008 September 2008 August 2008 July 2008 June 2008 May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007 April 2007 March 2007 February 2007 January 2007 December 2006 November 2006 October 2006 September 2006 August 2006 July 2006 June 2006 May 2006 April 2006 March 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005

TAKE THE

Religious Wisdom Quiz

Who said, "Do you not know that your bodies are temples of the Holy Spirit"?

Select your answer to see how you score.

Jesus Paul Peter James