The new mantra for city malls is to entice customers into staying at the mallsonly. For instance, the Select City Walk Mall in Saket, recently unveiled 83 plush suites spread across five levels, complete with living room, kitchenette and designer bedrooms, called Svelte Suites. These suites are classified as Executive, Royal, Grand, Deluxe and Presidential suites. Their rates range from Rs 12, 000 to Rs 30, 000 per night, with room sizes ranging from 450 sq ft to 1,100 sq ft. The Ambience Group will soon have a luxury 319-room hotel and 90 service apartments by the Leela Group in the Ambience Mall in Gurgaon. The hotel will cater to the tourist inflow expected during the 2010 Commonwealth Games. Sun City Developers, builders of the Cross River Mall, are also planning a mega project of 40 lakh sq ft in Greater Noida, which will house retail space, offices, a five-star hotel and an entertainment island. As real estate developers fight to offer better amenities, the customer is spoilt for choice.

Real estate developers have hardly hiked their rates in the last six to eight months and some of them have not hiked them at all. Property analysts say this scenario is different from that witnessed between April and October 2007, when developers hiked rates by as much as 24% to 32%. According to a pan-India survey of local brokers in the residential property market, carried out by global research analysts Edelweiss, around 80% of brokers across India have witnessed a reduction in enquiries over the past month, and about 90% have seen a drop in transactions over the past month. A hundred brokers in 20 micro-markets like Bandra-Borivili, Mulund-Thane, Gurgaon, Noida, Whitefield-Marathalli and Annanagar, in Mumbai, Delhi, Bangalore and Chennai, were polled. Godrej Properties hiked rates for its Riverside project at Kalyan by 24% in 2007, but this year, it has increased them by a mere 7%, from Rs 2,000 per sq ft to Rs 3,000 per sq ft. Rates at Rustomjee's Elanza project in Malad (W) has remained constant, at Rs 9,000 per sq ft, after its hike of 20% at Rs 7,500 per sq ft last year. Similarly, property rates at RNA Builders' Royale Park and HDIL's Dreams project in Bhandup remained at Rs 6,500 per sq ft and Rs 5,750 per sq ft, after jumping 18% and 5% respectively from 2007.

Information technology space has resulted in reduced demand for office space in India in the second quarter of the current financial year. As per the report, many companies, especially in the IT/ITes sectors, have curtailed their expansion plans, which has hit office space sales in the last three-months. Another reason was the unavailability of funds for the sector, it says. The report also said that the current global conditions are likely to impact Mumbai the most as it is the financial capital of India, and the rentals and capital values across most micro-markets in the city will see a further correction. "The global economic slowdown has started to show early signs of impact on the office rental market. Going forward, this is expected to keep office rentals under check," said Mr. Anshuman Magazine, Managing Director, CB Richard Ellis, South Asia.

Want to buy a new home this Diwali? Then don't go for a house that is unfinished, warn experts in the realty sector. The global financial crisis has left builders with little money and they are struggling to finish off even the half-finished projects, let alone going for new ones, according to industry analysts. Experts warn that the financial strain on realtors is causing indefinite delays in the completion of many projects. 'Those who intend to buy property should go for only completed flats. It'll be too risky to buy properties under construction," said an analyst with a foreign brokerage. He cited the example of a Mumbai-based realtor whose high-end residential project in Lower Parel, one of the city's commercial hubs, was to be completed in 2006 but has now been delayed till 2009. Uncertainty looms large over whether even this deadline will be met, he said. This isn't an isolated case. Analysts say delays of three to four years are likely in under-construction projects.

Bangalore-based developer, MetroCorp is reportedly close to raising $300 million (about Rs 1,400 crore) from leading global financial institutions, including Prudential Corporation Asia and Warburg Pincus. The developer has three projects under execution, and has lined up a bouquet of 21 projects across India, ranging from residential and commercial to integrated townships to special economic zones.

The ambitious plan of Maharashtra Government to re-develop the Dharavi could stall because property firms that have bid for the project said the global financial crisis had made it very hard for them to raise money. Although builders did not say they would pull out of the project, they said they were waiting and watching. The project envisions that property firms will build new homes for the 500 acre slum’s residents. The firms are expected to fund this through money they will raise by selling new commercial building they will be allowed to construct on the same plot. The project is expected to cost Rs 15, 000 crore. The 19 firms that made it through the first, technical round of bidding are to submit financial bids in November. Five firms will be chosen. The government plans to allow the winning five firms to start construction in December.

Bollywood superstar Shah Rukh Khan has announced the launch of his signature real estate development, Shah Rukh Khan Boulevard, to be located in the emirate of Ras Al Khaimah in the United Arab Emirates (UAE).

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The 8-billion dirham ($2.2-billion) development will come up on Dana Island off the Ras Al Khaimah coast and will comprise studio and one and two-bedroom apartments.

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In an interaction with reporters here ahead of the Cityscape 2008 real estate exhibition, which started Monday, Shah Rukh said he had a fetish for houses and that was what led him to this project.

"I have a strange fetish for home. It's close to my heart," he was quoted as saying.

"Bit by bit, I have built my home where the future of my children lies. While I have done so much for my home, why can't I extend this to others?" he asked.

The development will be designed by well-known architect Toni Ashai and will also comprise an underwater discotheque, a public square on the beach and a theatre.

The project will cover three million square feet.

The film star has associated himself with the project through TSA International Investments, a leading real estate financial consultancy in the UAE.

Khan already is associated with the UAE's leading real estate developer Nakheel and owns a house on the posh Palm Jumeirah manmade island off the coast of the Dubai.

The financial crisis in the US is expected to have a cascading effect on the Indian commercial real estate sector that has already slowed down considerably over the past one year. According to industry sources, there could be a softening in the values of commercial property to the tune of 10% to 15% post the US meltdown. As a result, vacancy levels in commercial space across the country are expected to touch 10% by the end of this year from 6% last June. Market analysts can see prices cooling and projects being held up because of the drying up of cheap funds. In fact, raising funds from US and Western European investors, who accounted for a bulk of FDI in the sector, will now be difficult. Mr. Anuj Puri chairman, Jones Lang LaSalle Meghraj says, "Flow of funds from the US will definitely come down, at least in the short term. Funds to both private and public equities of developers are likely to fall. They will have to look at new avenues like Middle-East and Korea. Although this development will have no direct impact on the real estate sector, there may be indirect ramifications. Foreign capital for private equity investments in Indian real estate may be affected, and the stock of listed companies invested in these portfolios could take a beating due to negative sentiments."

Due to low liquidity of real estate and high mobility of investor capital, the capital cities are witnessing a price correction. Jaipur in particular has seen a fall of 20% in property prices. “The realty market in Jaipur has hit rock bottom as property prices have come down by 20% in the past one year. We were hoping the festive season to bail us out,” says Atmaram Gupta, a builder. Experts are also of the view that the situation is not going to change unless a big corporate investment comes to the market’s rescue.

“The hike in salary after the sixth pay commission will not have much impact in the market due to inflation. For, small investors already reeling under debts and with the rising price of home loan interest it is more difficult for them to think of new ventures,” says Sunil Jain, a member of Township Developer Association of Rajasthan With each passing day, it’s becoming more difficult to predict the future, he added.

As the US moves towards securing its bailout plan for Wall Street financial institutions the fall out is hitting hard in India.

In Mumbai commercial rentals are beginning to crack and deals for office space have slowed over 30% in the last three months, according to analysts.

Leading property brokers and consultants say things will be worse with prospective tenants asking for a 50% cut in rates and they put the blame firmly on the US financial crisis.

This is because companies, mainly IT and BPO service providers and finance firms, with significant US businesses are cutting back expansion plans and, therefore, the need for prime commercial real estate.

Meanwhile, tighter liquidity in the Asian markets is encouraging companies to defer their property bookings.

'Companies are not signing at the rates asked by developers like they did earlier and transactions are not taking place. We have seen prices correcting sharply in the last month,' said Suketu Mody, president and chief operating officer of Coldwell Banker Goodwill Consultants, a US-based consultancy firm that advises many Indian companies on their property deals.

Battery Ventures, a venture capital firm that has been looking for 3,000 sq ft of space in central Mumbai for the last couple of months, is still waiting in the hope of a further fall in rentals.

'We have seen a 5% correction in rentals in the last three months and expect a 10 to 15% further correction in the coming months. We will certainly wait and see,' said Gautam Patel, partner, Battery Ventures.

Oversupply could also start to have an effect. By early next year, Mumbai and its suburbs will add 15.4 million sq ft of office space, more than the commercial space now available at the Bandra-Kurla Complex or seven times the office space at Nariman Point.

Rentals are expected to fall another 15 to 20% in the next six to nine months. 'Demand will slow from IT, BPO and finance companies that have enough choice in cities like Bangalore and Hyderabad. Rentals will drop to levels from two years ago,'' said Pranay Vakil, chairman of Knight Frank.

However, developers believe demand will come from newer sectors of the economy and at different levels of the property market. 'Though some companies have reduced space requirement I am not worried even if prices correct 10 to 15% because it is good for both buyers and sellers,' said Hemant Shah, chairman of Akruti City, which builds offices and homes in Mumbai.

Demand for real estate across office, retail, residential and hospitality sector is expected to cross the 1000 million sq.Ft. Mark by 2012, according to a report by Cushman and Wakefield.

Despite the expected slow down in the office market the demand for commercial office space is projected to be 243 million sq ft which is 22 percent of the total demand projections for the next five years.

The retail and hospitality segments are expected to constitute 95 million sq ft (nine percent) and 73 millin sq ft (six percent) of this total demand

Anurag Mathur and Sanjay Dutt Joint Managing Directors, India Cushman and Wakefield said, 'The world wide economic slow down is definitely impacting the real estate sector across the world and India alike. Fortunately this slow down is unlikely to last beyond the next two to three years.

"In the long term strong demand for real estate in India will remain intact and will probably see us through another real estate cycle once the market finds its own levels by responding tho these short to mid term global and robust demand for real estate across sectors", they said.

A dynamic workforce, liberalised economy, robust demand for real estate across sectors are the key factor that will make Indian market in coming times more reliable for investments especially in the real estate sector, the report said.

According to the report, Bangalore depicts the second larest CAGR in demand for commercial office space over the next five years and represents the highest cumulative demand among the top seven cities. (MORE) PTI JD MSR BN SS SS 09241944q ft) and retail

(10 mn) sq fet, Hyderbad ranks sixth. The residential demand is estimated to be 61 mn sq ft.

Indian property prices, which had taken off like jet planes, appear to be losing altitude after bad debts owing their origin to real estate brought down the US financial market to its knees.

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Marketmen see prices cooling and projects being held up for want of cheap funds, but don't expect the market to crash.

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Raising funds from American and Western European investors, who accounted for a bulk of overseas money coming to India, will be difficult. "Developers will have to look at new avenues like middle-east and Korea," said Global realty consultant Jones Lang LaSalle Meghraj country head Anuj Puri.

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The first to be hit would be commercial property prices, although a correction in residential segment too is expected. Rates had almost doubled in the three years leading to 2007, when interest rates started hardening.

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"Negative sentiments from events like these (collapse of Lehman Brothers, Merrill Lynch and others) will have a bearing on the banking and financial services' real estate requirement in India," Puri said.

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Failed investment banker Lehman and Merrill Lynch, which was taken over by Bank of America, occupied commercial space in India spanning 2.5 lakh sq ft - which itself is not adequate to bring down prices crashing, but the sentiment is.

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"It is not a big exposure considering 50 million sq ft of office spaces transacted every year in India," Puri said, adding that there would not be much of a direct impact because of the two firms going down under.

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Prices of properties in a good location would not be affected much, said Amit Sarin, Executive Director of Anant Raj Industries, in which Lehman held 1.8 per cent stake.

However, those in less prime areas could feel the pinch, said Sarin, whose company is predominantly into building IT space.

The credit crunch would affect the investment from the private equity players mainly based in the US, experts said.

The current environment is "challenging" for Indian real estate market, Puri said.

Asked about the overall impact on the market, he said there could be some decline in prices due to the negative sentiment.

Globally, banks have written of over $ 500 billion in bad debts, exactly half the total losses forecast by the International Monetary Fund due to loose lending by American banks to people with poor creditworthiness or the infamous 'subprime' lending.

The slowdown is also because of high interest rate regime and the prices, particularly in the housing segment, have softened in the last one year.

Private equity firm Red Fort Capital's Director Kuldip Chawlla said: "Flow of funds from the US will definitely come down, at least in the short term. Funds to both private and public equities of developers are likely to fall."

Real estate developers, who were thinking of raising money through an IPO in the near future, would now hesitate to go to the capital market, he added.

Sarin of Anant Raj said the companies which have strong internal accruals would sail through, but those dependent on debts and private equity would feel the pressure.

Currently, there are 40 IT SEZs in Hyderabad and it hopes to reach US$7 billion mark with a prospective growth of 50 per cent during the current financial year. An estimated 60-70 million sq. ft of IT/ITeS specific commercial office space is expected to come up through special economic zones alone by 2010 in India. And out of the seven cities where such zones are coming up, Hyderabad leads with about 30 per cent of the total expected supply of real estate, closely followed by Pune, Bangalore and Chennai.

Construction firm Gammon India Ltd has decided to consolidate its real estate projects under Gammon Realty, which it plans to list on the bourses. Though the realty arm was floated two years ago, it has announced only one venture in Bhopal, Madhya Pradesh-a Rs800 crore mixed-use project that would host a five-star hotel, and residential and office space. Gammon Realty plans to develop different properties across India—both high-end residential and commercial space-in Mumbai, Bangalore, Mysore and Bhopal, and has already acquired sizeable land. It is planning an IT park on 10 acres in Dombivli, a Mumbai suburb. Besides this, it has plans to develop another high-end residential and commercial complex spread over seven acres, near the Andheri Sports Complex in Mumbai. The company has also acquired some 200 acres in Mysore and another 200 acres near the new Devanahalli airport in Bangalore.

Bombay Dyeing is going to develop eight lakh sq ft of property on its surplus land in Mumbai. The company will construct a high-rise building for commercial and residential use. "We will commence construction of a high-rise tower in two months. The entire project will be sold off in the next 24 months,' Chairman Mr. Nusli Wadia told shareholders at the company's AGM. Although it would be difficult to fix a value for the upcoming project, real estate market sources said the company could earn a few thousand crores. Bombay Dyeing had started selling its Spring Mills project at Dadar in 2006 at an introductory price of Rs 10,200 per sq ft, which zoomed to Rs 25,000 per sq ft in January 2008. The company is redeveloping its Spring Mills property in Central Mumbai into a residential tower, 84% of which has been sold. The work at Dadar and Worli is also under construction, with two commercial and IT/ITeS towers expected to be ready by 2009-10.

Hyderabad-based real estate developer, PBEL India is planning to build a township, PBEL City, in the city at a cost of Rs 1,200 crore. The township will comprise of 13 residential and two commercial towers. PBEL City, a joint venture between PBC and Electra Real Estate, both from Israel, and Incor from India, is projected to come up in Rajendranagar on the outskirts of Hyderabad. The company has spent about Rs 200 crore on the project for purchasing the land and creating infrastructure. PBEL India will raise funds from internal sources and through banks.

Office rental prices might not see any major fall across the country's major business hubs-National Capital Region (NCR), Mumbai and Bangalore - even as the commercial realty markets in these areas are expected to witness a significant surge in supply, a leading real estate consultancy firm CBRE in a report. Bangalore is expected to witness further rise in the office rentals but those in Delhi, Gurgaon and Noida as well as Mumbai are expected to remain mostly flat in the short to medium term.

Big real estate firms are planning to invest in Gwalior which will give the historical town a facelift in five years. Many companies have plans for Counter Magnet City, which falls under the National Capital Region. Gwalior was designated as Counter Magnet City in the NCR plan, 1989. It is one of the five Counter Magnet Cities that are to play a role in reducing population pressure on the growth of the capital region and Delhi. But red tape is choking investors’ interest. Inordinate procedural delay in land allotment is increasing cost pressure for investors. The officials are now declining big firms' proposals. Though the Special Area Development Authority (SADA) of Gwalior is close to the final stage of land allotment process for developers, there are still a number of issues that still block the development of an area of 30, 000 hectares, where CMC will take shape. The SADA has been accused of delaying land allotments. "We go by rules, there are real estate players who want land but we offer them only through bidding. Big companies like Sahara and the Ansals have allotted land through bidding," said Mr. Jai Singh Kushwala, Chairman of the SADA.

Real estate developers, the Salarpuria Group is planning to invest about Rs 3,000 crore in 12-14 projects across the country. These projects will be a mix of residential, commercial, retail and hospitality located in Bangalore, Hyderabad, Pune, Kochi, Jaipur, Kolkata and Visakhapatnam. About 13 million sq ft are under construction currently, said Mr Mahesh Khaitan, Director, Salarpuria Group.

Marriott International along with Uppal Hospitality plans to launch a 206 room JW Marriott hotel in Gurgaon. The hotel, which is located on the Delhi-Jaipur highway, is expected to open in mid 2009.The hotel will offer a spa and fitness centre with gym, an outdoor swimming pool, pool bar, gift and retail shops, business centre, executive lounge and 1, 220 sq m of meeting space. A 400 sq m ballroom will be available for meetings, as well. F&B options comprise a casual restaurant, two specialty restaurants and a café-deli. Other amenities include a bar and a lobby lounge.Marriott has 24 properties in various stages of development. Five properties will come up under the JW Marriott Hotels luxury brand; one hotel under the Ritz Carlton umbrella; 11 Courtyard by Marriott projects will launch in the upper-moderate segment; three Renaissance hotels and two Marriott hotels are scheduled for the upmarket, deluxe section and two luxury Marriott Executive Apartment properties will cater to long stay travelers.