Number of migrant labourers down, construction sector hit - Indian Express

http://m.indianexpress.com/news/Number-of-migrant-labourers-down--construction-sector-hit/923145/

Number of migrant labourers down, construction sector hit - Indian Express Mobile

The migration from Bihar, Uttar Pradesh and Rajasth an to the city seems to be on decline as the construction industry is reeling under a severe shortage of manpower that traditionally comes from these states. Owing to this, the rates of skilled and unskilled labour has gone up by Rs 50-100 per day compared to the daily wages charged nearly a year back.

The officials of Confederation of Real Estate Developers Association of India (CREDIA) said that the rates of both skilled and unskilled manpower have increased with the carpenters and masons now charging between Rs 450-600 while the labourers charging Rs 250-300 a day. The businessmen associated with real estate industry said the shortage of manpower is around 20-25 per cent against the per day requirement of nearly 30,000 people in the city.

“The shortage is due to the decline in the number of workers from UP, Bihar and Gujrat. This is because now these states are also witnessing development,” said JP Shroff, member of management committee of CREDAI. Some independent real-estate companies also pointed out the decline in migration as a reason for the shortage of manpower.

Ranjit More, Managing Director of Universal Group, said the shortage in manpower is being met by raising the skilled manpower through in-house training. “We are facing manpower shortage at a number of projects that are going on in different parts of the state. We are being helped by people from other business streams in the company to train the manpower to operate machines which are now being used in place of manual labour,” said More.

While the developers are trying to meet the shortage by using machines, as a long term initiative training programmes are being offered by industry body like CREDAI and some institutes to help meet the gap. “We have raised a trained manpower of 1,600 people and the training in different skills is being offered at the sites. The training is currently going on at 11-12 sites,” said Shroff.

President of Maharashtra-Pune Metro chapter of Confederation of Real Estate Developers Association of India (CREDIA), Satish Magar, said, “Mechanisation is increasingly becoming common to deal with the labour shortage. The machinery like concrete mixers and lifts are being used by the developers to reduce the dependence on labour.”

Real estate developers however say despite initiatives like mechanisation and on-site training the projects are getting delayed. Director of B U Bhandari Landmarks, a real estate company, Anuj Bhandari, said, “The estimated time for the completion of projects is getting delayed. The work that is being done has now become more expensive due to the labour shortage.”

Due to the manpower shortage, the training institutes like the Ideal Construction Practices are offering training programmes on raising the manpower. Founder of Ideal Construction Practices, R B Chaphalkar, said, “From March we are starting 21-lecture course on the supervision of building constructions. The course will train people in undertaking the supervision of the construction works. We have created all the facilities at our training centre at Dhayani in the city to train the people in the supervisory work.”

Arun Gupta

FDI in India up 31% to $27.5 bn in 2011 Mar 11, 2012

Ihttp://www.firstpost.com/economy/fdi-in-india-up-31-to-27-5-bn-in-2011-240321.html

Firstpost

FDI in India up 31% to $27.5 bn in 2011
Mar 11, 2012

#Business/Finance #FDI #NewsTracker
New Delhi: Foreign direc

t investment (FDI) in India went up by 31 percent to $27.5 billion last year, notwithstanding uncertain economic environment globally. FDI inflows in 2010 totalled $21 billion.

FDI inflows in 2010 totalled $21 billion. AFP

The sectors that attracted maximum FDI last year include services (financial and non-financial), telecom, housing and real estate, and construction and power, according to the industry ministry’s latest data.

Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE are the major investors in India.

Experts said, meanwhile, that the government should further streamline policies and make the environment more conducive to FDI.

“The government should allow 100 percent FDI in sectors like domestic airlines and insurance sector to boost inflows and generate employment,” Ficci Secretary General Rajiv Kumar said.

During April-December, FDI moved up 51 percent to $24.18 billion, from $16.03 billion in the same period of the previous year.

FDI inflows totalled $19.42 billion in 2010-11 financial year, down from $25.83 billion in 2009-10.

To boost FDI inflows, the government has liberalised the FDI regime, allowing overseas investment in bee-keeping and share-pledging for raising external debt. Besides, 100 percent foreign investment has been allowed in single-brand retail sector.

Besides, the conditions for FDI in construction of old-age homes and educational institutions have been eased.

PTI

Please enable JavaScript to view the comments powered by Disqus. Arun Gupta

Realty sector returns in India at an all-time high

http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/business/2012/March/business_March183.xml

Business : Realty sector returns in India at an all-time high

DUBAI — India’s real estate sector is poised to record continued strong growth given the robust state of the country’s economy, which is projected to grow 8.5 per cent in the current fiscal.

“Investing in Indian real estate is sure to give investors a rewarding deal as the returns are at an all-time high,” said M.I. Sait, managing director of Mindscape Exhibitions Pvt, which is organising the Times Realty India 2012 exhibition which is to run at JW Marriott Hotel Deira on Friday and Saturday.

At the two-day event, a wide range of Indian properties will be showcased. Sait said the real estate sector has attracted increased flow of foreign investors.

He said the Central Statistics Office, Ministry of Statistics and Programmed Implementation, has estimated an 8.5 per cent gross domestic product growth for 2011- 2012, against the initial projection of 8.6 per cent.

“This means the Indian realty has outperformed the primary investment sectors. The market witnessed stability with virtually no change in the rentals over the year as the malls located in the central districts continued to operate with high occupancy levels.”

Sait said the second half of 2012 is expected to witness an additional space supply of approximately three million square feet.

According to property experts, investment in residential property projects is currently preferred by investors, since the demand for homes in the metros and Tier II cities is virtually limitless.

Commercial and retail spaces also present potentially lucrative investment propositions, especially in the larger cities, they said. They argue that residential property investment is comparatively low risk, while retail is a moderate risk/returns option. “However, capital values are higher in commercial and retail spaces, so they represent larger investments. Moreover, it is more difficult to exit in the case of commercial spaces,” they said.

The Tier I cities of Mumbai and Delhi and Tier II cities such as Bangalore, Pune and Chennai are seeing the highest demand by investors. In broad terms, the configurations in greatest demand are one and two bedroom flats in the central areas as well as the suburbs, while three bedroom flats in good township projects on the outskirts are also a good option, they said.

Credai Kerala, the south Indian state chapter of the Confederation of Real Estate Developers’ Associations of India, the apex body of organised real estate developers representing over 6000 developers, will be part of the property show.

M.V. Antony, President, and John Thomas, secretary of Credai Kerala, said under it leading builders from the state would be showcasing their projects at the Dubai event. “Kerala is in a phase of development and progress. Important developments are happening in Kochi, the commercial capital of Kerala — the metro rail, Vallarpadam Transshipment Terminal, the Smart city to name a few. Not far behind are the other leading cities of Kerala — Trivandrum, Kozhikode and Kannur,” they said.

“The Vizhinjam International Seaport project in Trivandrum and the upcoming cyber park project in Kozhikode given a further big boost to the property sector in those tow cities. Kannur is also fast developing with an international Airport underway,” they said.

issacjohn@khaleejtimes.com

54,000 new properties in Pimpri-Chinchwad in 3 years

http://m.timesofindia.com/city/pune/54000-new-properties-in-Pimpri-Chinchwad-in-3-years/articleshow/12117254.cms

54,000 new properties in Pimpri-Chinchwad in 3 years - The Times of India on Mobile

PUNE: A total of 54,000 new properties have come up in Pimpri Chinchwad city in the past three years as per the records of the Pimpri Chinchwad Municipal Corporation (PCMC)"s property tax department.

There are now 3.25 lakh properties in Pimpri Chinchwad.

Figures made available by the property tax department show that there were 2.71 lakh properties in the city till March 31, 2009. There was an increase of 17,000 properties in 2009-10.

In the subsequent year - between 2010 and 2011 - the number of properties increased from 2.88 lakh to 3.07 lakh. In 2011-12, the number went up to 3.25 lakh.

Shahji Pawar, assistant commissioner and chief of property tax department, PCMC said, "Large numbers of properties have come up in Sangvi, Thergaon, Bhosari, Chinchwad, Pimpri Waghire and Chikhli areas in 2011-12. There was an addition of 3,000 properties each in Sangvi and Thergaon divisions; 1,800 in Bhosari casino online division; 1,400 properties in Pimpri division; 1,300 in Chikhli division and 1,200 properties in Chinchwad division in 2011-12 till February 29."

Pawar said that the property tax department has for the first time crossed the mark of Rs 160 crore in annual income.

The annual property tax collection target for 2011-12 is Rs 180 crore. Last year, PCMC"s property tax collection had reached Rs 159 crore.

Pawar expressed confidence that the department will achieve the target and set a new record of annual property tax collection.

He said that in the year 2008-09, the property tax department had collected Rs 89.57 crore.

The collection crossed the Rs 100-crore mark in 2009-10, when it earned property tax of Rs 102.46 crore. In 2010-11, tax collection crossed the Rs 150 crore.

Meanwhile, the civic administration has spent Rs 365 crore on development projects in the current financial year.

The engineering department spent Rs 178 crore on development projects. The garden department has spent Rs 7 crore and another Rs 10 crore have been spent on land acquisition.

The PCMC has spent Rs 15 crore on development works for the urban poor living in the city.

Pawar said that Rs 23 crore each have been spent on the electricity department and on water supply and drainage department works.

Branding matters in the property market

Branding matters in the property market:
Sanjay Bajaj, Jones Lang LaSalle India

 1 Mar, 2012

Sanjay Bajaj, Manging Director - Pune Jones Lang LaSalle India

In the hyper-driven world of advertising, literally nothing has escaped the phenomenon of 'branding.' In the world of real estate development, whole question of how important builders' brand names are on the property market should be examined in greater detail.

* For practical purposes, a branded builder is one whose projects are selling well on the basis of reliable construction, imaginative designs, and provision of desirable amenities, good project locations and honesty in dealings. The creation of a credible brand image requires positive feedback from existing customers and a good market reputation as far as delivering consistent quality and value is concerned.

* A branded builder will have invested a lot in building up his image, having employed a professional. Also a branded company would be affiliated with all relevant industry associations, thereby establishing credibility.

* A builder derives numerous advantages from his brand image. He gets clubbed among reputable professionals in the field, wields greater clout with financiers and can attach higher rates to his projects. He commands the trust of both his clients and employees.

INGREDIENTS OF A REAL ESTATE BRAND

A builder in the process of establishing a brand name will make his presence felt at real estate events such as property exhibitions, and will regularly offer new projects to buyers here. These will be advertised in leading publications and eye-catching hoardings. With repetitive exposure, a brand name gets firmly implanted in the buyers' minds. A branded developer's signature is evident in the conscientious choice of location, superior amenities and quality

A branded builder is a trend-setter on the property market - in other words, the rates he charges in his projects will often decide the rates that other projects of similar configurations in the same locality will charge.

WHY SOME DONT GO FOR BRANDING

Few builders do decide against establishing a brand name to highlight themselves and their projects. This can have a number of reasons: Real estate development can be a supplementary activity for some companies. The builder may lack the expertise or financial resources necessary to establish a brand. The builder may be engaged in realty for a short period only, to make a quick buck. The builder may be under the archaic illusion that if a project is good, it will sell itself.

POTENTIAL DOWNSIDE OF BRANDING

Generally speaking, brand-building is a valid and beneficial exercise that profits both the builder and his clients. However, it should be noted that fame and prestige carry with them a burden of responsibility towards all involved. It is easy for a builder whose name commands respect to grow complacent and eventually allow his company's standards to sink.

Indian Road-Building Hits Record Pace

http://mobile.bloomberg.com/news/2012-02-26/india-highway-building-hits-record-pace-as-contactors-pay-to-work-freight.html

Indian Road-Building Hits Record Pace as Contractors Pay to Work: Freight- Bloomberg
Indian Road-Building Hits Record Pace as Contractors Pay to Work: Freight
By Karthikeyan Sundaram February 27, 2012 12:50 AM EST

India is awarding highway- construction contracts at a record pace, and saving taxpayers money, as builders stop asking for subsidies and instead offer fees to lay and operate new toll roads.

Competition among builders such as GMR Infrastructure Ltd. (GMRI), Larsen & Toubro Ltd. and IRB Infrastructure Developers Ltd. (IRB) has helped the National Highways Authority of India win payments, or premiums, for at least 23 of the 35 projects it has offered since April 1, said G. Suresh, its chief general manager for finance. He didn’t elaborate. The body will award tenders for 7,300 kilometer-lanes of highways this fiscal year, worth about 570 billion rupees ($12 billion), and 9,000 kilometers next year.

“Many of the projects where we thought we’ll have to pay subsidies, we actually got premiums,” said B.K. Chaturvedi, who headed a government committee on highway development and a member of the state Planning Commission. “It’s a good thing there’s competition.”

Construction companies have stepped up bids for highways as growing vehicle ownership is spurring traffic and because of a slowdown in other sectors such as building power plants. The work will improve roads (LT) ranked worse than Botswana’s by the World Economic Forum and ease congestion that contributes to about 440 billion rupees of harvested foods going to waste each year, according to government estimates.

“India’s road network is barely adequate to maintain its current growth trajectory,” said Shailesh Kanani, an analyst with Angel Broking Ltd. in Mumbai. “Positively, the political will to acknowledge and address this issue is now visible.”

$1 Trillion Spending

India’s investments in roads could rise to $145 billion in the five years to 2017 from about $69.8 billion in the previous five years, according to a PricewaterhouseCoopers LLP. study. The country plans to spend a total of $1 trillion on roads, railways, airports and other infrastructure in the period.

The national highway system, a predominately two-lane network linking major cities, carries 65 percent of India’s freight and 80 percent of passenger traffic. In about six years through October 2011, the highway agency oversaw 5,182 kilometers of construction, including new highways and improvements.

Prime Minister Manmohan Singh in August 2009 set a goal of building 20 kilometers of highways a day. The nation has added 823 kilometers, or about 2 kilometers a day, since then as construction slowed, Tushar A. Chaudhary, junior road transport and highways minister, told lawmakers in parliament Dec. 12.

Tenders Online

Construction is now speeding up, partly because the agency has made it easier for builders to compete for projects by accepting tenders online and by creating a list of prequalified bidders. Winning bidders get to collect tolls for as long as 30 years before transferring the highways to the state, Suresh said. Toll fees are decided by the National Highways Authority.

The highways have become more lucrative for builders and the government as the rising number of cars and trucks boosts traffic and tolls. India’s car sales in the year ended in March jumped 30 percent, the biggest gain in at least nine years, according to Society of Indian Automobile Manufacturers. Sales may triple to more than six million by 2018, Rothschild forecast in a December report.

“Traffic risk is something to be taken on by the developer,” said Virendra Mhaiskar, chairman of IRB Infrastructure, which has constructed roads including the Mumbai-Pune highway. If the builder is confident of generating enough tolls to cover costs and make a profit, it can offer the extra anticipated funds to the government as premiums to secure the contract, he said.

Overestimating Traffic

Builders run the risk of overestimating future traffic and tolls, which could cause them to pledge unprofitable levels of fees, said Parvesh Minocha, managing director, transport division at Feedback Infrastructure Services Pvt., which advises clients on construction projects.

“The premium bids are increasingly becoming a cause for worry,” he said. “The worry will start manifesting a couple of years down the line when you have to give the NHAI what you promised and also put in money to build the roads.”

L&T, the nation’s biggest engineering company, decides to make premium bids for projects based on factors including traffic expectations, competition from other roads, the type of traffic the highway will attract and the ease of construction, said S.N. Subrahmanyan, director and senior executive vice president of its construction division. He didn’t say how much premiums the company has so far paid.

The builder changed hands at 1,298.60 rupees, down 3.7 percent, as of 11:14 a.m. in Mumbai trading, after declining as much as 4.4 percent. It’s fallen 14 percent in the past year. IRB Infrastructure fell as much as 2.9 percent and GMR Infrastructure dropped as much as 3.7 percent today.

Reliance, Adani

Builders may also be chasing road projects to help replenish orderbooks amid a slowdown in power-plant orders, said Manish Agarwal, an executive director at the Indian unit of PwC. Reliance Power Ltd. (RPWR), Adani Power Ltd. and other electricity generators have delayed building $36 billion of power stations because of concerns about coal supply.

L&T, based in Mumbai, has orders to build 100 billion rupees of roads, Subrahmanyan said. The builder boosted the number of road projects to 7,171 lane-kilometers in the first nine months of this fiscal year from 5,701 lane-kilometers a year ago, according to company presentations on its website. The number of power projects remained unchanged at 5 during this period.

Power Plants

That means power plants now account for 29 percent of L&T’s orderbook, compared with 37 percent a year ago. Roads and other building projects’ share has jumped to 40 percent from 32 percent.

“For investors, a company’s valuation seems to be driven by its orderbook,” said Agarwal. “If a company wins a bid, they see it as fantastic.”

Welspun Infratech Ltd., a unit of JPMorgan Chase & Co.- backed Welspun Corp. (WLCO), has won road projects worth 10 billion rupees since 1999, including a 185-kilometer stretch in the central Indian state of Madhya Pradesh, without offering premiums, said Assistant Vice President Rajeev Kumar. Still, the company is willing to offer fees.

“We aren’t averse to offering a premium to win a deal,” he said. “If the deal is good, why not?”

To contact the reporter on this story: Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net Arun Gupta

Realty prices to stay high as demand rises-News

http://m.economictimes.com/markets/real-estate/news-/prices-to-stay-high-as-realty-demands-rise/articleshow/12011521.cms

Realty prices to stay high as demand rises-News -Real Estate-Markets-The Economic Times on Mobile

Realty prices to stay high as demand rises
24 Feb, 2012, 1326 hrs IST, Sobia Khan & Ravi Teja Sharma, ET Bureau


BANGALORE | NEW DELHI: Home prices are unlikely to fall this year as sales have picked up across most metros in the past few months, according to bankers and realtors.

Property sales across major cities, such as Bangalore, Chennai, Gurgaon and Noida, rose on increased buyer interest, Bank of America Merrill Lynch said in its report for the fourth quarter of 2011. While sales in Gurgaon averaged 5,200 units over the last eight quarters against an average of 6,100 units on offer in the same period, Noida saw a marginal rise in home purchases. Quarter-on-quarter home sales in Mumbai, however, fell 25%.

"Sales volumes across cities (Mumbai being an exception) surprised us positively. Mumbai is headed for a sharp correction by another quarter or two while other property markets may remain stagnant due to rising unsold stock," the report said.

The Confederation of Real Estate Developers" Associations of India (CREDAI) also said sales have picked up despite builders continuing to hold on to prices. "Sales have picked up in the last few months and developers have not reduced prices as input costs have gone up. At first chance, they will increase rates by 10-30% across markets," said Lalit Kumar Jain, president of the 6000-member association.

"With inflation easing and chances of the cash reserve ratio coming down, builders are not so desperate (to cut prices) anymore as they have been able to generate sales," said Renu Sud Karnad, managing director of HDFC Ltd, one of India"s biggest housing finance companies. Besides, builders are unlikely to reduce prices as they are managing to break even with 40-50% sales.

Prestige Estates Projects has sold 30% stock in its newly launched property in Chennai in just a month. "We have clocked total sales of 1,464 crore in the last nine month as compared to 1,385 crore in financial year 2011," said Venkat K Narayana, CFO.

Mumbai-based property firm Lodha Developers said it has seen an uptick in sales since January. "People have been waiting for a price correction but chances of that happening are very slim," R Kartik, chief marketing officer, Lodha Developers.

"Properties in the range of 25-30 lakh are moving faster but the chances of NPAs in that segment is more. Our experience shows property prices have always been on the upside. A correction, if any, would be too small," said SP Singh, general manager (retail), Punjab National Bank.

Since last two quarters some 125 million sq ft has been added in new launches in the country"s top six markets. Bangalore and NCR saw the highest number of new launches at 48 m sq ft and 31 m sq ft each followed by the Mumbai Metropolitan region with 16 m sq ft, Pune 16 m sq ft and Chennai 12 m sq ft. Continued Arun Gupta