SBI is planning to include Kingfisher House on its next e-auction block

After getting unexpected response from its mega auction of Rs 1,200 crore worth properties belonging to defaulters, now SBI is planning to include Kingfisher House on its next e-auction block for the next round. On last Friday, State Bank of India put the block 300 pieces of residential, commercial and industrial properties across the countries which it had attached from defaulters in a bid to recover bad debts.

Till now SBI was selling its assets of defaulters in a piecemeal basis, but the problem was that most of the response was coming from localized and specific group of people who specialized in purchasing stressed assets at a discount price. In present economy is turning around and due to that now banks are hoping that investors from all over the country will be drawn to mega auction there will be a genuine price discovery based on demand and supply. According to Deputy Managing Director of SBI, PK Malhotra, “It was too early for us to include and put the Kingfisher House in the e- auction and now we are planning to include this during the next auction. Like other we are also looking for good business house to buy it rather than have a reseller come in. Our valuation of this was quite dated and now we are doing a fresh valuation which is expected to be through in a couple of days.

The latest e-auction included residential units as well as industrial plots from all over the country. While there was a good response to the residential properties, now SBI expecting some work on the larger industrial plots. According to Malhotra, “We are expecting to get over 10 to 14 per cent (over the asking price). Few of the industrial properties are very good with the entire infrastructure available. It is like a `plug and play’ asset for any entrepreneur.”

It is expected that these e-auctions and valuation of assets will add few hundred crores to SBI’s bottom-line for the third quarter as successful bidders have to make full payment by March 29 2015. As per the statement of Malhotra, there was good interest in the bank’s auction because the properties have clear title and buyers see value in them. The extent of profits would depend on the level of provisions made by the bank. If the asset has been fully written off the entire realizations would add to the banks bottom-line.

CREDAI-BANM 15th Property exhibition

Event Venue: - CIDCO Exhibition Centre, Vashi.

Date: - Dec. 12, 2014 to Dec. 15, 2014

CREDAI and BANM is going to organize the 15th Property Exhibition for the duration of Dec 12 to Dec 15 in the city Navi Mumbai. CREDAI stands for “The Confederation of Real Estate Developers’ Associations of India” and BANM stands for “Builders Association of Navi Mumbai”, which is the apex body of the organized real estate developers in Navi Mumbai. Whereas; CREDAI is the apex body for private real estate developers in India, which represents 8,800 developers through 20 states and 114 cities.
In present Mumbai is one stop destination for international standards real estate properties for commercial to residential properties. Mumbai is one of the global hot spot for foreign real estate developers and as well as national developers. As we all know that, property investors and buyers have become price and quality conscious and because of that they are searching for affordable property with good quality. In past few decades Indian real estate market is seen to be more investor-friendly as it is attracting the NRIs and foreign investors, which is the main reason for the boost in real estate market that drive demand to greater heights.
As the real estate sector witnessing a positive trend in Mumbai, so it is expected that record number of properties will be exhibit and sold in exhibition, as last year more than 350 properties were sold by the developers under the code of conduct adopted by the members of the CREDAI-BANM. The expo will feature the presence of real estate developers from across Mumbai Metropolitan Region (MMR) and country with the presence of housing finance segment with the organization like; LIC Housing Finance, Tata Capital Housing Finance Limited, HDFC, ICICI Bank, Kotak Mahindra Bank, L&T Finance, Bank of Baroda, Bank of India, Axis Bank, Union Bank of India, Reliance Capital and Canara Bank.
This expo is expected the presence of Bollywood and sports celebrities as in 2013 the same expo has witnessed presence of celebrities like Actor Sunil Shetty and Shilpa Shetty. In property expo there will be plethora of offers housing options for customers to take spot decisions. With the strong membership of more than 1800 leading Developers in Mumbai it is expected that expo will witness the huge success. This year it is expected that participation will be twice as compared to last year.
Life is all about taking the right decision at right time and this time the 15th Property Exhibition 2014 will kicks off at CIDCO Exhibition Centre, Vashi, so it’s great opportunity as it promises something more to everyone who is interested in real estate.

Bank of America is shifting its India headquarters from Nariman Point to the Bandra-Kurla Complex (BKC), marking another milestone in the steady movement of businesses to the suburbs. The bank is expected to move next year. The deal reflects renewed interest in BKC,” said a source familiar with the deal.

The corporate houses and financial institutions prefer BKC because of its central location, good connectivity, superior quality of the properties and adequate parking facilities. In BKC, there is ample car parking space, good power backup and hi-tech AC systems — something Nariman Point buildings lack. “The Bank of America has signed a letter of intent with Sanjay Chhabria of Radius Developers to take on lease 1.30 lakh sq ft in OneBKC, a brand new commercial tower in BKC. It will occupy floors 16, 17, 18 and 19 of the building once it moves in next year. It may be mentioned that the deal has been structured with a low rent of approximately Rs 230 a sq ft per month, but with a high advance deposit of over 18 months’ rent. The lease works out to around Rs 3 crore a month. The deal was brokered by property consultancy firm CBRE. Both Radius Developers and CBRE were unavailable for comment. In 2011, Bank of America took on lease two more floors spread over 30,000 sq ft in Express Towers at the rate of Rs 310 a sq ft per month, or Rs 93 lakh. Property experts had then described it as the largest office space in Nariman Point to be taken on lease. At that time, the bank had decided to expand operations in Nariman Point itself. But it later realised that the new BKC buildings were far superior in infrastructure to the towers at Nariman Point, most of which were constructed over four decades ago. When ABN Amro Bank had renewed its lease for an office on the third floor of Nariman Point’s 12-storey Sakhar Bhavan at the rate of Rs 500 a sq ft per month in 2007, the Rs 500 barrier was touched in this business district at the height of the property boom. Though the rates are less than half, over 20% of Nariman Point’s office space said to be vacant today.

Now builders are targeting the existing structures in Mumbai, which are either in bad condition or dilapidated because centers of Mumbai is running out as there is no more space for residential development. But still it’s a big question, is it better idea to invest in these properties for redevelopment as down payment is very high in these areas (Approx. 50 per cent).

As per the research on seller or buyer sentiments, who belongs from west and south India most of the people raise their query about investment prospects in existing buildings or re-developed projects. Redeveloped projects are in the good flow of demand as they are like modernization of the area with new infrastructure. Before investing in existing buildings buyer should check the background of the developers as these properties comes with several risks in respect to FSI such as; government approvals and conversion regulations.

On side, where investment in re-developed infrastructure can be beneficial for buyer or end user, the same can be risky for investors, who are looking for capital appreciation. The opportunities for capital appreciation much less in established localities in comparison of areas where there is huge potential for new infrastructure planning. Some areas in Mumbai like; Khar, Bandra and Santacruz are already saturated and developed with property cost in a range of Rs 18,000-44,000 per sq ft whereas, other areas like; Navi Mumbai and Vashi is still in the development stage in terms of re-development, infrastructure and connectivity .

CIDCO (City and Industrial Development Corporation) has allowed FSI up to 2.5 for new affordable housing buildings and it is expected that these buildings will be able to get a better scope of appreciation for those investors, who are looking for capital gains as well as the base value. In general re-developed infrastructures require more investment from consumers as builders, who are involved in re-development projects can ask for more down payment and it can range up-to 60 per cent of the total value. Most of the matured commercial and residential areas are undergoing for re-development in Mumbai to bring new supply of buildings for catering the needs of people, now end user can find multiple way to invest in these properties to earn maximum profits.

The office property market is expected to continue to strengthen for the remainder of 2014. The restoration of business confidence is expected to gain steam, on the back of the positive business outlook. Adequate supply in the pipeline in all the markets will ensure steady rentals across the cities in the medium term, while vacancy may fall marginally in cities like Bangalore and Pune.

This market witnessed a new wave of leasing activity in Bangalore and Pune, while cities like Mumbai, Chennai recorded a moderate increase in absorption QoQ. Approximately 8 million sq. ft. of office space was leased across eight major cities in India during the quarter. The IT / ITeS sectors remained primary demand driver says Colliers International report.

The Collier International has come out with its report on economic overview which says that overall; market sentiment witnessed an improvement this quarter after the general elections. As Prime Minister Narendra Modi took charge at the Centre with a clear mandate, investor confidence picked up in expectation that the new government would revitalise the economy. Consequently, the CII Business Confidence Index for 2Q 2014 increased to 53.7 from 49.9 in the previous quarter. The capital markets also performed well, with both the BSE Sensex and the BSE Realty Index showing an upward swing. The rupee strengthened and even showed signs of recovery during the quarter, hovering in the range of 60 to 60.5 per US dollar. The first quarter GDP growth figures posted a marginal decrease from 4.7% in 4Q 2013 to 4.6% in 1Q 2014. The office property market witnessed a new wave of leasing activity in Bangalore and Pune, while cities like Mumbai, Chennai recorded a moderate increase in absorption QoQ. Approximately 8 million sq. ft. of office space was leased across eight major cities in India during the quarter.