Tata Housing close to raising Rs 3,200 crore for luxury housing across top 5 cities

MUMBAI: Tata Housing is in advanced-level talks with a few institutional investors to raise Rs 3,200 crore for its upcoming premium and luxury residential projects across top five cities. 

The real estate developer is vetting final-stage proposals submitted by private equity funds Macquarie, JP Morgan, Standard Chartered and Morgan Stanley, a pension fund and a sovereign wealth fund. 

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The capital pool could be raised from one fund or a consortium of investors, three people close to the development told ET. The 'investor list' would be put up for board approval over the next couple of weeks, a source said.

 "The deal will help Tata Housing to take up newer projects. The company has not made significant gains in its earlier projects due to sector-related problems," said an analyst tracking the real estate sector. 

"Since this is an equity relationship, the company will only need some (pro-real estate) sector tailwinds and timely completion of project to improve project yields," the analyst said. 

Tata Housing intends to construct premium and super-luxury residential enclaves in Mumbai, Chennai, Kolkata, Delhi and Bengaluru, priced between Rs 3 crore and Rs 10 crore at booking. 

The company, according to sources, may also use the incoming funds to construct super-luxury holiday homes at Kasauli, Lonavla and Goa. Tata Housing officials, when contacted, refused to comment. "Tata Housing may co-invest in this project; their participation could be just about 30 per cent; this means, about 70 per cent of project profits would go to the investor," the source close to the deal said. 

The Tata housing deal is in continuation of several large ticket (project-level) deals struck over the past few months. PE funds have invested close to $1.5 billion across 40 deals between January and July this year. 

Marquee institutional investors like GIC - Singapore, Canada Pension Plan Investment Board, Dutch pension fund asset manager APG Asset Management and sovereign wealth funds Qatar Investment Authority, among others, have made chunky projectspecific investments over the past one year. 

Analysts expect this trend to continue as they expect lower interest rates and buoyant markets to spur demand for prime real estate over the next couple of years. 

Tata Housing targets to complete the first phase of its Bengaluru project — The Promont — by early 2017. 

The company has three ongoing projects in Delhi, which it hopes to wrap up in two years. Projects in Mumbai and Goa would be ready for possession by 2019, a source in the company said. Besides this, Tata Value Housing, a group company, recently raised Rs 250 crore for investments in the affordable housing space. 

Source - ET

Realty firms expect a spur in housing demand following RBI's rate cut

NEW DELHI: The Reserve Bank's decision to cut key interest rates is likely to reduce borrowing cost for both home buyers as well as developers leading to increase in housing demand, realty firms and consultants said today.

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They sought further cut in interest rates as well as policy reforms for the growth of realty sector, which is facing a huge demand slowdown in last few years.

RBI today cut interest rate by 0.25 per cent for the third time this year to spur investments and growth.

"Its a good move. Banks should now pass on the benefit to boost demand. Interest rate on home loans should be 9-9.5 per cent," DLF's whole-time director Rajeev Talwar told PTI.

Realtors' apex body CREDAI President Getamber Anand termed RBI's decision as good step but too less.

"Market was expecting bigger reduction. Banks should pass on the benefits immediately as per RBI direction," he added.

Parsvnath Chairman Pradeep Jain hoped that banks would now pass on the benefit to the customers thereby stimulating the overall demand.

"Such liberal moves coupled with policy reforms are necessary for the revival of the real estate sector in our country," Jain added.

CREDAI (NCR) President Manoj Gaur said the move has come as a breather for the real estate sector. He expected another 25 basis points cut in next 3-6 months time.

Property consultant JLL India Chairman & Country Head Anuj Puri said the downward revision in  RBI's repo rate will positively impact the sentiments surrounding the real estate market.

"Banks will now be able to offer loans at more attractive rates. Cheaper loans for home buyers will prompt a renewed interest in residential property purchase from end users and investors," Puri said, adding that cost of funding for real estate developers should also reduce marginally.

Tata Housing Managing Director & CEO Brotin Banerjee said: "It is now important that cumulative rate  cut amounting to 0.75 per cent since January this year, gets translated into the lending rates being offered by the banks and financial institutions to the consumers."

Cushman & Wakefield Executive Managing Director (South Asia) Sanjay Dutt said RBI's decision to cut repo rate would provide a much-needed stimulus to the economy.

"Given the tepid demand conditions in the real estate sector, a cut in repo rate bodes well to improve sentiments of home buyers and spur home-buying decisions. However, the actual impact can be seen only when commercial banks lower their lending rates," Dutt said.

C&W said that the cost of borrowing could also decrease marginally for developers, who have been reeling under high funding cost and increasing cost of construction.

HDIL's Senior Vice-President (Finance and Investor Relations) Hariprakash Pandey hoped that this rate cut would be replicated by the banks by reducing interest rates, which would not only  accelerate demand for housing, but also boost manufacturing and ancillary industries too.

Source : ET

Top realtors including Tata Housing eye the app route to keep buyers informed

KOLKATA | MUMBAI: Taking a cue from e-retailers, realtors are fast launching apps for smartphones which provide vital information about their new projects to interested customers, especially foreign buyers, who often can't visit the site but can do a virtual tour with the app.

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Projects details such as amenities, facilities, specifications, plans and price are all available on the app, and an user can flip through location, see pictures of the project and figure out its construction status.

 

"These apps would be useful to buyers, right from collecting and submitting forms online and making payments, to keeping themselves updated about projects they had put their money into," said Brotin Banerjee, MD & CEO, Tata Housing Development Company .

 

While Godrej Properties is working on some apps for its up coming project, Tata Housing Development Company has already tried out two such apps and is launching another for its luxury project at Mulund suburb of Mumbai -The Gateway , where customers get to interact with international designers and can even decide on the interiors.

 

Tata Housing has already tried out apps for their Arabella and The Promont projects in Delhi and Bengaluru. Godrej, on the other hand, has apps for IOS and Android-based platforms for its under-construction projects in Ahmedabad, Chembur and Vikhroli in Mumbai, Gurgaon and Pune.

 

"The rate at which smartphone users are growing today , the future looks promising, given that a lot of the Indian market is still untapped. With these apps, we wish to reach out to this part of the market," said Girish Shah, executive vice-president, marketing & sales, Godrej Properties.

 

Realty developer Kalpataru has also introduced mobile apps with the idea to help consumers stay abreast and get details of relevant properties. The company recently launched the Radiance App for its upcoming project Radiance in Goregaon, Mumbai, to engage with its customers on the project's development and progress.

 

"With the reach of online mediums more effective than traditional media, we are not only engaging with prospective buyers in the primary local market, but also those in other cities and the NRI base through our app," said a spokesperson of Kalpataru. "Project based apps allow users to browse through information that is applicable and related to them vis-a-vis an app for the entire group." Even builders from smaller markets are cashing in on the trend.

 

Kolkata's Siddha Group is reaching out to NRIs through their Siddha Mobile App, but unlike national builders, Siddha doesn't have an app for individual projects. Once a customer has bought a property, he can sign on to the app and keep track of the project -from his payment history to maintenance dues.

 

"Our objective is to make it convenient for someone looking for a home in a specific unit area or having a certain budget or looking for a particular type of apartment. The long-term objective is also to give our existing customers a fast and convenient service support through the app," said Sanjay Jain, MD, Siddha Group.

Source : The Economic Times (ETRealty.com)