A significant appreciation at the first of the year, and it was felt from this point onward, actual realty prices would at best stagnate or at worst, begin a slow climb down. But, that has not happened cod to the DLF effect, DLF which is making Bharat a property-driven stock market, and is coming discover with the mother of all IPOs (Rs. 10,000-crore) in June 2006.
A CLSA report confirms that place this IPO, Bharat module become a concept driven stock mart rattling much like Hong Kong & Singapore in the Nineties. And, place the IPO, projections are DLF module hit a mart cap of over Rs. 1,00,000-crore, making owner K.P. Singh (owning 88% of the company place IPO) the richest Indian based discover of India, pipping Azim Premji and Ambani Brothers to the post. Even in 2004, given the continuance of the realty bank owned by DLF, KP Singh was touted to be amongst the richest Indians. Since then, actual realty valuations hit gone up dramatically, and to understand what DLF is all about, a trip to Gurgaon is necessary.
Starting discover by colonizing and developing a sort of metropolis colonies e.g. Model Town, Greater Kailash – I / II, 60-year old DLF was left without any business when Indira Gandhi made metropolis Development Authority (DDA) the sole authority responsible for developing concept and actual realty in metropolis in 1970. Without business, but with significant cash assets in the late 1970s, DLF scouted around, exclusive to home in on the sleepy little village of Gurgaon. Chosen for the Maruti project, Gurgaon made good business sense.
The next 10-years saw DLF purchase over 10,000-acres of realty in and around Gurgaon. Phase I of DLF’s first township was developed in the late eighties and DLF began to sell plots here. Seeing the potential, soon Ansals and Unitech followed DLF to Gurgaon. The rest is history!
Today, the Gurgaon skyline is dotted with shining render edifices that sound paeans of approval to progress made by DLF. And, DLF City comprising of five phases is spread over 5000-acres, while the group has many other plans up its sleeve. All this was happening when not many had heard of DLF. Focusing on decent a Pan Bharat player, the terminal 2 years has seen DLF purchase big properties in Mumbai, Bangalore, Chennai, Pune and Jaipur.
For those who thought the Indian actual realty sector was heading for a eruct in 2006 had better re-think the concept scene again. The fact is deal prices of actual realty developers has gone up 100%. Take for example:
1. UNITECH- In the past 3-years (May 2003 to April 2006) Unitech deal prices hit gone up from Rs. 40.60 to Rs. 6068 per share.
2. ANANT RAJ INDUSTRIES:- In the terminal 1-year (May 2005 to Apr 2006) Anant Raj Industries deal price has gone up from Rs. 15.60 to Rs. 816.2.
3. ASHIANA HOUSING & FINANCE LTD.: In the terminal 40-days (20th March 2006 to 30th April 2006) Ashiana Housing deal price has gone up from Rs. 97.1 to Rs. 352.2.
For stocks to appreciate over 100-times in one’s lifetime is a rattling rare phenomenon, and so many in actual realty could exclusive mean, there has been a shift in the way people view actual realty in Bharat or else there is a eruct building up. A whatever incidents do indicate there could be a minor bubble, as a pre launch offer of a Jaipur concept was for Rs. 2-lakh, on the promise in a month’s time, the same could be sold for Rs. 3-lakh to another investor, a 50% return within a month. Then again, fresh a diminutive block of realty in a Gurgaon village sold for over Rs. 3-crore.
When the CLSA report starts valuing Infosys based on the continuance of its realty bank, digit has to move questioning what is happening. It effectuation no longer does digit hit to impact hornlike to become rich; digit only has to acquire actual estate, and wait to sell it for a higher price. The rate at which actual realty prices are spiraling higher and higher, making actual realty owners richer and richer, within a decade Indians module be as prosperous as the Americans.
But, to be honest, digit feels a correction in actual realty stocks is necessary in the long term, meanwhile, short-term wise, anything can happen, and the sky’s the limit for actual estate! Always, a good buy, if you hit the money or the bank module loan you some, acquire a house or two, throw in a advertisement property, and you module be clinking glasses with the likes of Azimji Premji and the Ambanis! Remember to toast the continuance of actual realty when you are rubbing shoulders with the moneybags of India! You owe your zillions to Indian actual estate!