Slum Rehabilitation projects for private developers in Delhi

Like Mumbai, where players like HDIL, Akruti City and Omaxe have made a killing in the slum rehabilitation projects, Delhi slums also offer big business to real estate developers. Delhi Development Authority (DDA) is firming up on an elaborate plan for slum redevelopment projects in the capital and for the first time is involving private developers. It has appointed consultants to draw up plans on the redevelopment of 30 slums in Delhi. Players like DLF, Omaxe and Raheja have shown interest in the DDA plan to redevelop 30 slums.

Why are these big developers vying for the slum rehabilitation projects?
The simple reason is that margins offered by slum projects near 70% as against 30 - 35% for other real estate projects. The developer is expected to build houses for the slum dwellers and in return gets a part of the total space for development which he can sell at market rates. The developer get higher floor area ratio (FAR), i.e, permission to build more floor area on a piece of land. The FAR on a normal project is different for every city ranging from 1.8 in Kolkata to 2 in Delhi and unlimited in Hyderabad. However, in slum development projects FAR is increased further thus allowing higher margins in these projects. The Internal Rate of Return (IRR) for slum projects are much higher than commercial and retail projects. Access to cheap and strategically located land is the biggest advantage in these projects.

Scope for slum development in Delhi
Delhi has around 900 slum clusters housing a fifth of the total population. This is the first time that DDA is involving private developers in slum projects and DLF, Omaxe and Rahejas have shown considerable interest and are waiting for the government's nod. The slum redevelopment projects will be done on similar lines as being undertaken in Mumbai's Dharavi(Done by HDIL) or other slum areas. As against Mumbai where the slum clusters are spread out in size, Delhi slums are small and hence relatively less attractive.

Nevertheless, the slowdown in the real estate markets makes these slum projects in Delhi also very attractive with higher margins and is likely to attract private developers interest.

10 Most expensive Streets in the world - Altamount Road also figures in it

Even as the real-estate bust reaches into Richistan, a handful of the world’s toniest streets seem immune.

The Wealth Bulletin (a Dow Jones site) has come up with a list of the 10 most expensive streets in the world. Granted, this is an inexact science, but the list includes some jaw-dropping price-per-square-foot numbers for some of the richest blocks on earth.

Topping the list is Monaco’s Avenue Princess Grace, the palm-lined street named after Grace Kelly that overlooks the water. Forget buying a house there — just getting a beer at Jimmy’s Bar on the Avenue will set you back more than $100. But living on the avenue gets you a chance to rub elbows with Russian oligarchs, Middle Eastern oil sheikhs and the occasional Monaco royal.

India's Altamount Road, home to Mukesh Ambani's $2 billion home also figures on the list

Here is the complete list, with some sample property prices as tallied by Wealth Bulletin:

1. Avenue Princess Grace, Monaco — $17,750 per square foot.

2. Severn Road, Hong Kong — $11,200 per square foot.

3. Fifth Avenue, New York City — $7,500 per square foot.

4. Kensington Palace Gardens, London — $7,196 per square foot.

5. Avenue Montaigne, Paris — $5,046 per square foot.

6. Ostozhenka, Moscow — $3,738 per square foot

7. Via Suvretta, St. Moritz — $3,551 per square foot

8. Carolwood Drive, Beverly Hills — $2,803 per square foot

9. Wolseley Road, Sydney — $2,616 per square foot.

10. Altamount Road, Mumbai — $2,336 per square foot.

I will cover these streets in more detail in future posts.

Bill Gates Residence, Washington

Click to watch Video of Bill Gates home

The Bill Gates family lives in the exclusive suburbs of Medina, Washington, in a huge earth sheltered mansion in the side of a hill which took over 7 years to complete. The home is totally hi-tech with technology that adjusts the light in the house based on the light outside and other electonically advanced systems. The house is a contrast with the latest gadgets on the one hand, but also having the feel of a 18th or 19th century mansion: it has a large private library with a domed reading room. While it does have a classic flavour, the home has many unique qualities.

Technology is definitely the USP of the home -

• Lights would automatically come on as you enter the room
• Speakers would be hidden beneath wallpapers, so that the music would follow you from room to room
• Portable touch pads would control everything from the TV sets to the temperature and the lights, which would brighten or dim to fit the occasion or to match the outdoor light
• Visitors to Bill Gates House are surveyed and given a microchip upon entrance. This small chip sends signals throughout the house, and a given room's temperature and other conditions will change according to preset user preferences.

The median size of an American house is 2,000 square feet, and Bill Gates' home is 30 times its size (60,000 sq ft) with a Pool building, Exercise facilites, Library, Theater and Formal dining room. The garage can accomodate 30 cars. Inside Bill Gates' Garage, you'll find a 1999 Porsche 911 Convertible and 1988 Porsche 959 Coupe. Interestingly, due to the 959’s questionable emissions and unknown crash ratings, it took a federal law signed by President Clinton for Bill Gates to legally drive his 959 on American roads. Well thats the power of having anything you want if you are the richest person in the world.

Property records indicate 7 bedrooms, 24 bathrooms, 6 kitchens, 6 fireplaces, and 4 building levels. From the outside, the house seems to be smaller than it actually is. This is largely because most of the construction has been done underground. Unfortunately, this does not escape the eyes of the Tax Department, as reportedly, Bill Gates paid a property tax of over 1 million dollars last year.

Earlier, Bill Gates organized a private party at his waterfront mansion. The U.S. Department of Homeland Security announced a "temporary security zone" around Gates' Lake Washington home which locked down all of Lake Washington south of the Highway 520 bridge and stayed in effect for two days.

Well, the lifestyles of the rich and famous and their CRIBS :)

Antilia, Kensigton, Beverly Hills, Donald Trump - Richest houses in world

Mukesh Ambani, the owner of Antilia, the worlds most expensive residence at a steep price of $2 billion has made the world gasp for the architecture and the luxury that its 27 stories will have. Read here . The next most expensive residential property is not even close at $300 million, purchased by Aditya Mittal, the son of steel tycoon Lakshmi Mittal for a 7 storey house opposite his father's house in Kensigton Palance Gardens. The difference between the two most expensive property prices is striking and his house could spur the billionaire's of the world to build high priced

There are only 11 known residential properties in the world whose prices are over $100 million. After Mr Ambani's $2 billion Antilia and Mr Mittal's $300 million home, the house used by Don Corleone in The Godfather, in Beverly Hills California comes 3rd with a value of $165 million. This residential estate has 29 bedrooms distributed over 6 buildings with 3 swimming pools and a cinema hall. Next comes the five-storey Victorian villa in Kensington Palace Gardens in London, which was bought by Mr. Lakshmi Mittal for $156 mn in February this year. Dracula's Den - $140 million
The fifth most expensive residence has an interesting history - it is the 1212 AD vintage castle in Romania, that was once the home of Vlad the Impaler, who inspired the infamous man-vampire character Dracula. Priced at $140 million, it is perched atop a cliff and overlooks the mountains.

Uptown Court in England, which is even larger than the Buckingham Palace, is 6th with a price tag of $138 million. It has gardens, theatre, ball rooms and a marble drive way. The 7th largest estate is the $135 million Hala Ranch in Colorado owned by Saudi prince Bandar bin Sultan bin Abdul Aziz. This is the most expensive residence in the US. Bandar's place comes with about 56,000 square feet, more than 30 rooms, indoor pool, trails, employee living quarters and stables on 94 acres.

Next on the list is Donald Trump's property in Florida quoted at $125 million for which he paid a meagre $40 million 4 years ago since the previous owner had gone bankrupt. Donald Trump's property is on six acres with 475 feet of Atlantic Ocean beachfront. The home has a 4,100-square-foot conservatory, media room, library and three pools. Prince Abdul Aziz's $135 mn Ranch

The remaining three residential properties on this list are all valued at $100 million — Tranquility, at Lake Tahoe, Nevada, US; Waterfront Estate, in Istanbul, Turkey; and Eurasia, in Moscow, Russia.

The Lake Tahoe mansion looks like a European mountain home and was built by Joel Horowitz, the co-founder of the fashion brand Tommy Hilfiger. Turkey’s Waterfront Estate is located bang on one of the world’s most strategic waterways linking the Mediterranean with Black Sea, while the Russian property is a manor with two attached guesthouses and nearly 100,000-feet recreation area that includes a gym, a swimming pool and many lounges.

To summarize, 11 properties exist with a value of greater than $100 million.

1. Mukesh Ambani's Antilia - $2 billion
2. Aditya Mittal's Kengsington Garden's house - $300 million
3. Don Corleone's California house - $165 million
4. Lakhsmi Mittal's Kengsington Garden's house - $156 million
5. Vlad the Impaler's Romania house - $140 million
6. Surrey, England - $138 million
7. Sultan bin Abdul Aziz's Colorado house - $135 million
8. Donald Trump's Maision - $125 million
9. Tommy Hilfiger's cofounders' Tranquility at Nevada - $100 million
10. Waterfront Estate, in Istanbul, Turkey - $100 million
11. Eurasia, in Moscow, Russia - $100 million

With Mukesh Ambani raising the bar for the billionaires of the world to splurge on their homes, we could see more luxurious houses in the years to come. I will write on some of these 11 properties in the next posts, definitely about Lakshmi Mittal's 4 residential properties valued at over 250 million pounds in greater detail.

Mukesh Ambani - Antilia - 27 storeyed house

Videos - http://in.youtube.com/watch?v=2ASNE1eZiYw&feature=related
Video - http://in.youtube.com/watch?v=QFMNXOJ3-dA



Thought it would be fun covering the much talked about 27 storeyed $2 billion (yes 8,000 crore) house being built on Mumbai’s Altamount Road by India's richest man – Mukesh Ambani. Well the nearest priced residential house is valued at $300 million, the sum offered by Aditya Mittal, son of steel tycoon Lakshmi Mittal, for a seven-storey mansion opposite his father’s home in London’s billionaires’ block, Kensington Palace Gardens.

The name of the house is Antilia — meaning mythical island - which is not just a home. It is going to be more of a private mini-hotel with its ballroom, several lounges, guest rooms, six floors of parking for 168 cars and 600 servants. In comparison, most other rich properties are renovated villas, mansions or castles. No two floors of the project are similar.

Some absurd facts about this ‘house’..

1. 3 helipads on top. Mumbai corporation has not given permission for making this operational yet
2. Hanging gardens within the structure
3. Swimming pool within the structure
4. A two storey Health centre
5. Parking space for 168 cars (6 floors). I initially thought that meant there will be a mini office in the building but apparently that is not the case. All these cars will belong to Mukesh Ambani! Just in case you are interested, he drives a 5 crore Maybach now
6. A floor exclusively for servicing these automobiles within the building
7. A floor for Home theatre – sitting capacity of 50

Well the most absurd part is the employee strength of over 600 in the building. Yes, the ratio would be almost 1:100 for people living in the house and those that are being paid to take care of it. The 6 lucky members are Mukesh, his wife, 3 children and his mother Kokilaben. The family will be moving in from their old home ‘Sea Wind’ which was a 14 floor building at Cuffe Parade.

It is designed by Chicago architects, Perkins & Will, and is inspired by the Hanging Gardens of Babylon. It is expected to be completed by September 2008. The 4532 sq m plot was bought by Mr Ambani in 2002 when land prices were relatively cheap and hence the actual expenditure on the property is less than $2 billion. Currently, land is valued at over Rs 75,000 per square feet.

The building will be will be 150 metres tall. Normally that is the equivalent of a 60 storeyed tower, but in this case each floor is more than twice the height of a normal floor, with the result that the building will only have 27 floors when completed. Given the prevailing state of skyscrapers in Mumbai, this building will be more than twice as tall as the earlier tallest buiilding.

Meanwhile, this trend of spending extravagantly on high end residential buildings is catching up in India. Videocon Industries chairman Venugopal Dhoot, JSW Steel's Sajjan Jindal, Kasliwal brothers, Nitin and Vikas of S Kumars are some among a long list of corporate honchos who are moving to their dream residences. I will write about these in detail in the next post and also about the most expensive residential houses in the world.

Innovative ads and greater ad budgets to woo buyers

Despite the market downturn, most of the real estate developers have upped their advertising budget by over 20%. This is just a case of increasing visibility for the players as most of the properties for the small developers are sold once their brand has a recall by the buyers. The print media is taking up the major chunk while the rest goes to the outdoors. Till some time back, advertisements were confined mostly property supplements or niche magazines, but with the slump in the realty market, developers are targetting the television and even print.

Stakes for developers are very high as their projects are not being sold in this high interest regime. Real estate developers are optimistic that the sceario will be good in the coming 6 months and hence are working on increasing their brand value for now.

Promotional activities are in full swing. Unitech, when it started its luxury project Grande launched an ambitious TV campaign just 4 weeks from the time the project commenced. The company also held special events - derby in Delhi and polo in Mumbai - in the past few weeks to attract buyers for the launch of its two new towers in the Grande project.

In a referral programme launched by a Mumbai-based developer, a buyer, who gets an additional customer, gets a 2% commission on the sale proceeds. In fact, to create hype, some developers have hosted pooja at the launch inviting guests.

When real estate company Unique Builders launched a condominium development near Jaipur, 3,510 Hindu priests performed traditional rituals and prayed for divine blessings. The number of priests equalled the number of condos on offer at the development, My Haveli@ Mannat1. The gimmick helped, and the project made up 63% of total residential sales last year in a softening Jaipur real estate market. It is an example of how developers are moving away from traditional marketing techniques and adopting novel strategies to attract reluctant homebuyers.

Mumbai-based Lodha Group hired an event management company to think up a different on-site experience for potential buyers to sell its luxury villas in Lonavala, a hill station near Mumbai.

The company conducts pre-visit interviews where personal details about the potential buyer are collected. Based on these, buyers are picked up in a luxury car, given their favourite magazine and offered a beverage to sip through the journey to the site, which is then followed up by a personalized trip around the site. Lodha adds a personal touch by clicking a photograph of the visitor on the site. The photograph is framed and then sent to the potential buyer as a memento.

It is time for innovative techniques to woo property buyers in this testing time. Only time will tell if these modern techniques are able to revive the recession that the real estate market has entered into.

Small developers exit hotel investments at lower valuations

An exuberant real estate market saw a large number of small real estate developers foray into the hospitality sector. These small developers, who had plenty of land at strategic locations, were trying to get into the glamorous hotel business. With hotel room shortage taking room revenues to higher levels, the hospitality business looked immensely attractive. And with foreign hotel chains looking to aggressively expand in India, even small developers could easily tie up with them for a management contract.

The scenario is very different today. With real estate prices , room rents sliding, cash strapped small realty players have been forced to put at least half a dozen hotel projects on the block. A developer has put on the block a 200 room hotel project in Ahmedabad that has a tie-up with a reputed international brand. Work on the project is around 60% complete. Similarly, two mid-size hotel projects in Bangalore, which are in the early stages of construction, and one each in Pune, Chandigarh and NCR have been put on the block. Almost all the projects are mid-size. Some developers are looking at completely exiting the hotel projects while others are looking at stake sale.

The developers are looking for equity dilution and are now willing to settle for lower valuations for their hotel projects. What is forcing the developers is not only the slowdown in the real estate sector but also the nature of the hotel industry. Hotel projects are capital-intensive and payback period is very long, compared to other assets such as housing or commercial.

Most of the projects put up for sale are by small developers who do not have the holding power. In several cases, where construction has not begun, the projects have been deferred and the developers plan to do a commercial or retail project.