In order to secure answers to critical questions of evolution of the Indian real estate market over the next few years, its direction and speed of growth and the distribution of incomes, etc., Ernst & Young and FICCI developed this thought leadership report. The results of this insightful report, we presume, would be invaluable to not only realtors but also the industry, the investors and the consumer both in India and abroad.

REWIND 06-07: HYPE TURNING INTO REALITY

Year 2006 started on a speculative note but as the year progressed, real estate industry outpaced the growth of economy with its explosive growth of 30 per cent p.a. The sector continued to be the chosen investment avenue as the yields were visibly higher than other options. In fact, yields from the investment in Indian real estate are among the highest in the world. Catalyzed by some key factors such as dynamic policy interventions, free-flowing cross-border capital, entry of large international players, domestic IPOs. increasing end-user demand and occupancy, strategic alliances, the sector is flourishing. Of late, there has been an increased focus from the developer side on creation of land banks, geographic expansion and raising capital to fund their extensive development pipeline. The Indian developers have been able to raise almost $4-billion, via the capital market in the past two years and further $4.7-billion is expected to be raised this year. As a result, several investment opportunities exist in many different product types and regions across the country. The flash back of trends and development in all major asset classes during 2006-07 would create a base for the future indications.

A) VARIOUS ASSET CLASSES

COMMERCIAL: As per industry sources, the supply of commercial office space was estimated to be around 45-50-million sq. ft. in the year 2006-07, which is further expected to grow to 60-65-million sq ft. in the year 2007-08. The IT/ITES industry is the predominant occupier of commercial office space in the country accounting for close to 70-75 per cent of all office space absorption currently.

RESIDENTIAL: Residential is the single most important area of property development within India, owing to certain reasons, making up for 75-80 per cent of real estate development activity. As per HUDCO estimates the country faced shortage of 31.1-million dwelling units in 2001. Going forward, the gap of housing unit shortage would widen to about 45-million units in the Eleventh Plan (2007-2012) as per the estimates by National Housing Bank [NHB). However, it was a mixed bag last year as on the one hand, roaring demand and decent supply resulted in healthy appreciation, while on the other, tightening of lending norms by RBI and hike in provisioning requirements for banks on home loans had some dampening impact, though overall absorption remained healthy.

RETAIL: Retail is actually a small part of the formal real estate sector with a strong potential for growth. In anticipation of possible future liberalisation of the retail sector to EDI, the year 2006 has seen an increasing trend of many Indian conglomerates actively buying potential sites and establishing chains, especially in top seven metropolitan cities.

HOSPITALITY: With growth in inbound tourism and increase in business travel led by growth in the services sector, this segment is recently witnessing major activities. The Average Rack Rate (ARR) and revenue Per Average Room (Rev PAR) grew by 27 to 30 per cent. Bangalore emerged a leader in terms of ARR and Rev PAR as far as geographical performance is concerned.

SPECIAL ECONOMIC ZONES (SEZ): Industrial Parks and SEZ remained in lime light. IT and ITeS and electronics sector witnessed the maximum number of approvals followed by bio-technology and engineering. Geographically, maximum number of approvals was bagged by State of Maharashtra, followed by Andhra Pradesh and Tamil Nadu.

B) POLICY & GOVERNANCE:

In order to provide a conducive investment environment and to remove some of the perceived barriers governments and official bodies at various levels have relaxed, rationalized or modified the regulations or policies impacting the real estate. One of the most important initiatives was the preparation of draft " Real Estate Management (Regulation and control) Bill' which would bring the sector under the scanner of a regulator. To address the issues such as affordable housing etc, a 'national Housing Policy and Urban Habitat Policy 'is also expected by the year end. Government is also examining the 'amendments' to the existing "land acquisition Act'. The concept of "Reverse Mortgage' was introduced for the first time and the policy is expected to be finalised shortly. Further, the National Housing Bank (NHB) has set up a Technical Advisory Group (TAG) to explore the possibility of constructing a real estate price index (RESIDEX). The Government has raised concern over excessive supply of capital in the sector and has tried to curtail the liquidity in the sector by increasing interest rates and risk weights for banks lending to real estate and restricting real estate companies from borrowing in international markets. On the other hand, the government plans to ease entry restrictions for foreign investors in the real estate sector. It is contemplating to reduce the minimum area criterion from 50,000 sq m to 10,000 sq m for commercial projects, and from 10 hectares to 10 acres for residential projects. Some initiatives and efforts are undertaken by state governments and their municipal bodies such as creating guidelines for the development of integrated townships, etc. Currently, a number of major metros are finalizing their master plans as well.

C) MOVING UP THE VALUE CHAIN:

First prominent trend observed is the forward and backward integration by several firms in the real estate value chain. This is firstly evident by the foray of construction and infrastructure companies into the developer space. Infrastructure and construction giants such as L&T, IVRCL, IDEB Inc, Lanco, Maytas, Madhucon, GMR, Nagarjuna Constructions amongst others are playing a big role in the Indian Realty Sector. The project portfolios of major national construction giants such as Unitech, DLE Sobha, Parsvanath, Ansal have scaled up drastically. The real estate sector has also witnessed diversification of project portfolios by some of the major developers. Developers specialized in a single asset class, have now ventured into multiple asset classes.

RESIDENTIAL IS THE SINGLE MOST IMPORTANT PROPERTY DEVELOPMENT IN INDIA MAKING UP FOR 75-80% OF ALL REAL ESTATE ACTIVITY

D) BROADENING OF CAPITAL MARKETS:

The year 2006-07 was marked with several companies being listed, both in India and in international markets and large amount of private equity inflow. The IPO market has witnessed the shifting of focus to the realty sector in the year 2006-07. Over 18 real estate and construction companies got listed since August 2006 to August this year and raised over US $4356.30-million from the public for various infrastructure projects. Most of the prominent real estate players like DLP, Parsavnath, Purvankara, Sobha, Kolte Patil and Omaxe came up with their public issues and the IPOs of most of them were oversubscribed reflecting keen interest of the investors in the stocks of the sector. Another interesting trend that was witnessed during last year was the listing of several Indian real estate companies on the offshore exchanges like AIM, Singapore listed REIT, Singapore Stock Exchange and Dubai International Financial Exchange to fund their spiraling business growth Private Equity emerged as the one of the most preferred options for the domestic as well as foreign investors. These funds are likely to dominate the transaction activities in this sector in the coming year also. It not only encouraged the developers to expand the scale and volume but also accelerated the development.

E) INTERNATIONAL INTEREST:

  our Client is the exporter of Iron ore from India.

We require the following for export purpose,   We are looking to buy the  import Billets & Blooms from your valued company. We need all range of Blooms (150x150mm /Standard Ghost 380-94 ST 5-Sp& 3-SP) to produce Angle or beams.

At present our buyer has Angle & Channel in our production schedule with following dimensions:

Angle:

100x100mm

120x120mm

130x130mm

150x150mm

Channel:

125x65mm

If you have any local demands for mentioned section, we can offer you a best competitive price.

Hope to have a permanent, longtime business in near future with investigation in mutual market.

If you have any offer, please recommend us.

Waiting for your kindly response.

Best regards

UseD Rails R50-R60
Chemical Co,position Used Rails:
C: 0.54 - 0.82
Si:0.18 - 0.40
Mn:0.60 - 1.05
S : 0.04 Max
P: 0.03 max
As: 0.01max of mass share
Norms: R50 Gost -7173-75 and R65 Gust -8165-75
The scrap consists of R-50 (51.67k/m) R-65(64.72kg/m) used Rail.
!SRI 27-29
ISRI-COES:
(27) Rail: steel No.1 standard section tee rails; original weight 50
pounds per yard of heavier; 10 feet long over; Suitable for re-rolling
into bars and shapes; free from bent an twisted rails, frog, switch,
and guard rails; or rails with split heads and broken flanges;
continuous welded rail may be included provided no weld over 9 inches
from the end of the piece of rail.
(28A) rail, Steel No.2 cropped Rail Ends: standards section, original
weight of 50 pounds per yard and over/18 inches long and under.

Our requirements are as below :

 COMMODITY                : Steel scrap - used - hms 1 & 2 rail roads

ORIGIN                 :  Any

SPECIFICATION            :  As specified

 CONTRACT LENGTH  : Depend upon quality on first shipment and then for 12 month

QUANTITY                      :  From 200.000.00 mt up to 2.000.000.00 mt

LOADING PORT            :  As per supplier

DESTINATION PORT   :  C & F Jeddah . port

  TARGET PRICE             : ( Will be finalized) LC at Sight basis

SHIPPING TERMS     :  CIF Jeddah

DELIVERY TIME      :  30 days

PBG                :  2% PB to be issued by SELLER

LOI VALIDITY      : 15 dyas from the date of issuance

Available in Parkview Residency by Bestech Group, in their Palam Vihar Project a 2 BR (1325 sq.ft) apartment on higher floor. Excellent Location in Tower 6. Priced to sell.

2. Available In Raheja Square In Manesar approx 4500 sq.ft of Space for Rent

Available for rent approx 4500 sq.ft space in excellent location of Raheja Square in Manesar.

3. Ambience Island 2 BR, 3 BR, & 4 BR Available For Company Lease - Location On NH - 8 In Gurgaon

Available for company lease,

    * 2 BR, 1800 sq.ft, Ground Floor @ Rs 30,000 pm
    * 3 BR approx 3500 sq.ft a lower Floor, fully refurbished, with all new woodwork , painted, 5 A/C's (2, 2 ton and 3, 1.5 ton).
    * 4 BR, approx 4200 sq.ft

4. South City 1 - 2 BR - For Rent - Near Palms Apartments, Signature Towers, With Security Guard

Available For Rent In South City 1, near Palms, a 2 BR set, First Floor on a 360 sq.yd plot. Security guard at home entrance. Huge terrace, big kitchen, marble flooring and over 1500 sq.ft. At Rs 11500 pm.

5. Courtyard In Unitech's Nirvana Country 500 sq.ft Shop Facing Main Road Available For Sale

Available for sale in the Nirvana Courtyard a 500 sq.ft (approx) shop on the Ground Floor in Unitech's Nirvana Country. Prime location. Facing the 24 m main road.

6. Aralias 8500 s.qft Duplex and 5850 sq.ft Apartments Available For Rent On the DLF Golf Course Road

Available for rent DLF's super-luxury apartments - "The Aralias." Overlooking the golf course. Currently interior work is being done by the owners.

    * Available a 8500 sq.ft Duplex on middle floor.
    * Available a 5850 sq.ft simplex on middle floor. World class interiors. Expected rent around Rs 2 lakhs per month.

7. Available For Sale 500 sq.yd Plot In Sector 23, Gurgaon - Full Cheque Deals

Available for Sale in Sector 23 two plots of 500 sq.yds each. Both in full cheque. One is park facing. Within stone's throw distance from Palam Vihar.

8. Regency Park II 3 BR (1560 sq.ft) for sale - Full Cheque

    * Available For Sale in DLF Regency Park 2 in full cheque, a 1560 sq.ft apartment, with covered parking and on middle floor.

9. Orchid Petals 3 BR (1712 sq.ft), 3 BR + study (1964 sq ft) And 4 BR (2337 sq.ft) for sale

Available for sale multiple units in Orchid Petals On Sohna Road, Gurgaon

    * 1712 sq.ft - Towers 3, 8, 11, 19
    * 3 BR + study (1964 sq ft) in Towers 1, 2 (full cheque), 18.

10. Central Park 2 For Sale - Phase I Allotment, Lower Floor - Pool Facing

Available for sale a 2350 sq.ft unit in Central Park 2, Sohna Road, Gurgaon. This is from the Phase I allotments. Pool facing. Fifth floor.

11. Wanted To Purchase Retail Space of 600 to 800 sq.ft for A Dental Clinic In Gurgaon

Looking for space of 600 to 800 sq.ft for a Dental Clinic. Wanted to purchase. Should be in a good area with decent footfalls.

12. Available On Rent Office Space In DLF Galleria, DLF Phase IV, Gurgaon

Available for Rent Office Space of 385 sq.ft in DLF Galleria, DLF Phase IV.

13. Atlantis by Raheja's 3 BR + SQT(2435.64 sq ft) Royal specs And 4 BR Regal Specs on NH-8, Gurgaon

Available for sale

    * a 3 BR + SQT(2435.64 sq ft) Royal specs, on lower floor, pool and garden facing, in Raheja's Atlantis, on NH-8, Gurgaon.
    * 4 BR + SQT on lower floor, regal specs. One of the rare availabilities that is confirmed for a deal.

14. Parsvnath's Exotica For Sale 2810 Sq.ft And 3390 Sq.ft - 3 BR And 4 BR On Golf Course Road

Available for Sale

    * 3390 sq.ft in Tower B, Number 3 Unit. Lower Floor.
    * 2810 sq.ft in Tower D.

15. Unitech's Fresco 3 BR (1629 & 1877 sq ft) max cheque for Sale

Available for sale

    * 3 BR 1877 sq.ft on lower floor. Tower 8.
    * 3 BR (1629 sq ft) on lower floor in Unitech's Fresco, Nirvana Country, Gurgaon.

16. Some Builders Are Offering Interest Subsidies On Bank Loans To Help Clear Unsold Inventories

Don't let higher interest rates bog you down from buying the dream house you may have always wanted. Builders are coming to the rescue.

    * Your home loan rate may be as high as 9.5 per cent, but effectively you may end up paying only 8 per cent.

Real estate developers are looking at offering interest rate subsidies to clear out their existing stock of flats. Sources say several builders in the past one month have been approaching banks to offer lower interest rates to new home loan borrowers. The rack rate for Rs 10 lakh, five to 10 year floating rate home loan is anywhere between 9.5 to 10.5 per cent, but banks like ICICI had tied up with builders and offered a fixed rate of 7.99 per cent for the first three years.

So how does it work for ICICI? The builder pays the bank the difference between 8 per cent and the 10.5 per cent rate upfront in cash.

The ICICI Bank scheme ended in August, but builders have now approached the State Bank of India (SBI), which is also a big player in home loans. However, the SBI management hasn't yet agreed to these offers from builders as they are not sure whether they would be able to accept money from builders in cash, in lieu of the borrower as they fear Parliamentary questions.

But builders aren't daunted. They are approaching other banks like IDBI, HDFC and Kotak Mahindra for this particular scheme, which is popularly called 'Subvention'.

Builders are eager to subsidise home loan rates as they have too much unsold stock, which they are unable to sell because of rising home loan rates and high property prices .

And more such schemes are likely to hit the market once festive season begins.

From CNN-IBN - September 19, 2006 - by Krupali Pandit Yadav
Interest subsidies on real estate

17. Available For Rent A 18 BR Guesthouse In South City 1, Gurgaon

Available for rent a 18 BR guesthouse, with A/C's and 100% power backup. Built on 500 sq.yd plot.

18. Rising Housing Costs Tax Even Relatively Affluent - Is it Time for Two Income Families In India Too?

Editor's Note: One of our readers writes on GurgaonScoop.com (link here) describing his ability to pay for housing. What are the situations of our other readers?

And looking at his situation, one begins to wonder if we have reached a stage, like in the US, where we need 2 income couples? Both the partners should be earning to be able to afford a decent home in the suburbs ...
I am an IIM (Indian Institute of Management) graduate - have a CTC (Cost-To-Company) of 13 lakhs per year. It has been 2 yrs since I passed out.

I get a take home of around Rs 80 k a month.

    * around 8k goes in the student loan,
    * i bought a car recently, anothr 10k goes towards that,
    * fuel adds another 5-6k
    * and my phn bill is anothr 3-4 k.
    * i pay rent for the house i live in, its near gold souk, its not very fancy, just a basic 2 bedroom for which the rent is thankfully 8k.

    * So out of the 80k, thats 35k gone and 45k left.

    * add a few movies, a couple of visits to TGIF, some basic food requirements at home, electricity, cable, maid, some snooker on weekends, i'd estimate another minimal 7-8k thr.

    * left with around 38-40k.

Let me qualify my position - i would be amongst the higher earning people in my batch - say at the 30th percentile.

Now, how do i buy something in gurgaon.

My entire savings amount to 5 lakhs a year, even a 50 lakh house means living with the pressure of having negligible cash for any other needs, and frankly if i'm facing this, what sort of people are buying???

I have started becoming quite concerned with the way the house prices have gone recently.

19. Parsvnath Greenville On Sohna Road - 1st Floor Apartment For Sale At Unbeatable Price

Excellent first floor unit in Parsvnath's Greenville. Owner moving investments from residential sector to commercial sector, and offering apartment at unbeatable price.

Suits a investor for immediate gain. Also suitable if you are looking for living.

20. Wanted A Farm House For 6 months Rental By A TV Show

Interested in getting national exposure for your farmhouse. Well, a TV show is looking for just your farmhouse.

Want a 5 BR farmhouse for atleast 6 months. Maximum rental would be Rs 2 lakhs per month. Can be a little distant from Delhi & Gurgaon. The location is not as important, but the 5 BR is important.

For details call 98 119 87371 (sanjay) 98 716 70006 (sonia) 98 105 76028 (sanjeev) or the office at (0124) 411 0926, 411 0927, 411 0928.

Quantity     Units     Frequency
23     1 ONLY     ONE TIME ONLY
Price     Per Unit     Funds
50     LOT     USD
Other Scrap Iron & Steel - RACKS, STOCK# 6122-6001. (23) STAINLESS STEEL RACKS, APPX (20) W/ CASTERS 75" X 52" X 26", (1) TABLE W/ CASTERS 96" X 44" X 34", (2) RACKS W/O CASTERS

2. AVAILABLE : LA682429
Shipping Pt. / Location: USA, FORT LEWIS WA

Quantity     Units     Frequency
669     1 ONLY     ONE TIME ONLY
Price     Per Unit     Funds
50     LOT     USD
Other Scrap Iron & Steel - POWDER CANS, STOCK# 6122-7405. APPX (669) ROUND MILITARY 155MM HOWITZER POWDER CANS M3A1, M1 CHARGES. EACH CONTAINER IS APPROXIMATELY 12 LBS, NO LIDS

Our client desire 25,000 mt scrap, additional details as follows:

Quality : HMS 1& 2 (80:20) and shredded.

• Quantity : 25.000MT (+/-10%).
  
• Origin : Seller option.
  
• Discharging Port : Phu My Port Viet Nam
  
• Discharging rate : 2000Mt/day
  
• Shipment : Oct/Nov, 2006.
  
• Packing : in bulk
  
• Inspection : At loading port by independent
  

• Franchise : 0.3%
  
• Impurity : 0.3%
  
• Arbitration : Vietnam International Arbitration

Pig Iron PL1/PL2
Origin : Ukraine (DONETSKY STEEL PLANT)
Size: 18 kg max
Quantity: 10,000 MT
Load Port : Black Sea

Basic Pig Iron PL1/PL2
Origin : Ukraine (DONETSKY STEEL PLANT)
Size: Max WT of Pig - 18 kg
Quantity: 10,000 MT
Shipment Schedule : 45 Days
Load Port : Black Sea

Reinforcing Deformed Bars
Steel Grade: A400C DSTU 3760-98
Origin: Ukraine (KRIVOROZHSTAL)
Size DIA.: 8 MM - 10 MM - 12 MM.
14 MM - 16 MM - 18 MM - 20 MM.
22 MM - 25 MM - 28 MM - 32 MM.
Quantity: 20,000 MT
Load Port : Black Sea

Zinc Coated Coils
Origin: Ukraine (ILYICH - MARIUPOL)
Size: 0,55 X 1000 MM X C
Quantity: 500 MT
Load Port : Black Sea

Square Steel Billets
Origin: Ukraine (PETROVSKY - DNEPROPETROVSK)
Size:

1. 120X120 MM; L=9,0 M, Steel Grade 5 SP/PS as per GOST 380-94
   
2. 125X125 MM, L= 11,7 M. Steel Grade 3 SP/PS AS PER GOST 380-94
   

Wire Rods (Coils)
Origin: Ukraine (KRIVOROZHSTAL)
Size DIA : 5,5 MM & 6,5 MM
Quality: SAE 1008 / 1 KP
Quantity: 3000 MT
Load Port : Black Sea

Hot Rolled Steel Billets
Origin : Ukraine (KRIVOROZHSTAL)
Specification : Grade 5 SP/PS Or 3 SP/PS
Quality: According to GOST 380-94
Size:
A. 125 mm x 125 mm x 6,000 m / 9,000 m / 11.7000 m
B. 130 mm x 130 mm x 6,000 m / 9,000 m / 11.7000 m
C. 135 mm x 135 mm x 6,000 m / 9,000 m / 11.7000 m
D. 140 mm x 140 mm x 6,000 m / 9,000 m / 11.7000 m
E. 150 mm x 150 mm x 6,000 m / 9,000 m / 11.7000 m
Quantity : 25,000 MT in one shipment
Load Port : Black Sea

A3 Scrap Heavy Metal (HMS) # 1 and # 2 (mix 80/20)
Origin : Ukraine (KRIVOROZHSTAL)
Quality: According to ISRI code 200 and according to ISRI code 203
Quantity : 25,000 MT in one shipment
Load Port : Black Sea

Iron Ore Concentrate (Fe: 64% Min)
Origin: Liberia or India
Quantity : 60,000 MT in one shipment
Load Port : Buchanan port Liberia or Paradip Port India

Bauxite
Origin: India
Quantity : 40,000 MT in one shipment
Load Port : India ports

TERMS AND CONDITIONS:
Delivery : Within 45 Days after receive workable LC
Discharge Port : To be advice by Buyer
Discharge Rate : To be advice by Buyer
Litherage at disport: Buyer account
Inspection : SGS or equivalent in the loading port at the buyer's
expence
Price : CNF Free Out
Payment: Irrevocable Transferable Confirm L/C 100% At Sight issue by
International Prime Bank
Contract Lenght on annnual basis is subject to revision price of each
month

Hope to be able to establish a business relationship with you and
esteem organisation.

1)commodity: HMS1&2 (80:20)
  quantity: 30,000 mts. x 12 month contract.
  please quote CIF Kandla,india, with full details of material &   photos.

2)commodity: shreded scraps.
  quantity: 30,000 mts. x 12 month contract.
  please quote cif Cochin,Kerala,India, with full details & photos.

(2) Prime Hot Rolled Carbon Steel Flat Bars acc AISI 1045/JIS 4051 S45C/EN43B
    16mm x 100mm x 6000mm  -  250 M/Tons
    Shipment: February/March 2006
    Destination: Bangkok/Thailand
    Price required per M/Ton C&F Bangkok
    Packing details to be indicated by you.
Request/await your prompt e-mail response.
Best Regards
Krishnan

    Coil ID      - 20"-30"
     Weight    - 15-18 mts
     Thickness - 1.6mm to 2mm

Please ofr firm basis C&F Chittagong - Not FOB -

Best rgds

for Enquiries Contact ceo.aisra@gmail.com quoting advt code 010 or
Kuldeep Sharma Tel No 011-23389957 or write to Kuldeep Sharma,

CEO All India Steel Rerollers Asociation