| That’s really BAD. Actually when you see all the prominent builders of bangalore are non professionals and lack basic knowledge of multi-storeyed building. This is even the case with puravankara, who take ages to complete their project. I saw many ppl staying in still under construction site (only 40% completed). This is ridiculous, high time these builders learn some professionalism and don’t cheat customers |
Thursday, September 17, 2009
Sobha Developers - One among cheats in Bangalore
Sobha Moonstone - Biggest Blunder and no compensation to customers
| I have booked apartment in moonstone in 2006 and till date they have hardly constructed it. After fighting for 6 months they have cancelled it and taken away 80,000 Rs of my money citing service tax and cancellation fees. I am yet to understand how a cancelled apt have service tax. |
Sobha Developers - biggest crooks on Earth
I was stupid enough to fall for the Sobha brandname and book a flat in one of their HSR properties. This is what I got in return:
3. As per CDP 2015 which was released in 2005, a 30-m road is supposed to run through the property cutting it into 2 pieces. SDL kept customers completely in the dark about this. It was only when some local villagers put up some banners in protest that we, the customers came to know about it. Even then, SDL first lied saying it was the act of some local miscreants trying to extract money. Now, the entire issue has come in the open. SDL, not only refuses to come to any solution - they are trying to pass the buck onto customers saying it is our problem. Strangely, even today if you call their marketing posing as a prospective customer, they will say that there is "no issue" with any CDP road.
4. Charges have been hiked by 150% for BWSSB and KEB. SDL says they are not liable to show receipts to customers as it is not "standard industry practice". They have levied an additional 20k for solar lighting to all customers citing a 2006 govt order while most customers purchased the flats well after that. An independent evaluation shows that they are making 6x profit on cost/watt. Service tax refunds are not paid back to customers - instead we are being told to take this up with the govt directly.
1. It’s 16 months past their committed delivery date and still no signs of handover.
2. There is no access road to the property. The 40 ft road that was marketed as access turns out to be pieces of land owned by different individuals who have filed cases of encroachment against SDL. One of them filed a case 4 yrs back and won it recently and has now fenced off his land thereby rendering the apts almost inaccessible. SDL knew about this for at least 4 yrs but still went on with the sale of apts hiding this litigation from customers. When some customers found about this through RTI, SDL flatly denied at first. When pressed further, they lied saying it is about some "other" stretch of land, whoch is NOT part of the access road. It has been 3 months since this road was fenced off and SDL has not been able to arrive at any solution.
4. Charges have been hiked by 150% for BWSSB and KEB. SDL says they are not liable to show receipts to customers as it is not "standard industry practice". They have levied an additional 20k for solar lighting to all customers citing a 2006 govt order while most customers purchased the flats well after that. An independent evaluation shows that they are making 6x profit on cost/watt. Service tax refunds are not paid back to customers - instead we are being told to take this up with the govt directly.
5. A major architectural blunder renders 3 blocks inaccessible from the ground floor level. Residents are expected to go to the basement and enter the blocks. Now, they are trying to make up by putting some iron staircase (remember factories) at the back side.
6. They have not paid compensation for the delay to any customer who have made even the slightest modification like changing a tile, fitting a bathtub or a switch (for which Sobha charged exorbitantly). To those, who did not make any changes (probably only 10% of the owners), they held back compenstation for 69 days citing reasons like Rajkumar’s death, rains in Oct 2005, sand strike of 2006 - events that took place well before most people booked their flats. Wonder why they left out Indira Gandhi’s murder, 1993 blasts, Godhra riots, .... And the list goes on.... Last but not the least, they shout at customers, misbehave with them and have no shame or decency. Their customer service folks never pick up the phones, seldom respond to emails.......
So friends, this is the true picture of the city’s premier builder - arrogant, unethical and full of fraudulent practices. I made the worst decision of my life by going with them. Please don’t go down the same path. If my post dissuades even one person from investing with SDL, I would consider to have done some service to mankind!!
So friends, this is the true picture of the city’s premier builder - arrogant, unethical and full of fraudulent practices. I made the worst decision of my life by going with them. Please don’t go down the same path. If my post dissuades even one person from investing with SDL, I would consider to have done some service to mankind!!
Horrible Experience Dealing with Sobha Developers
I own a Sobha flat. Sobha flats look beautiful and they haven’t fallen down - yet. That’s why I went with them. That’s the good part. The bad part is:
1. They use horrible plumbing and electrical material. They leave wide gaps between the tiles. Anything that can be replaced with cheap material without changing the looks from outside - they will.
2. They cheat and mislead their customers on the sales agreements with fine prints and levy false charges.
3. For customer service they employ people who occasionally take your phone call - and try to be your shrimp instead of taking down your complaint.
4. They will not be there when you need them. They will leave one soul to maintain 150 odd apartments in the name of "maintenance agreement". And you will never hear back from that one bloke unless you chase him down like a maniac.
5. They are way too expensive.
For the amount of money they charge - its just not worth it. The process of handing over was stressful and the realization was sharp that I had paid a premium price to buy a lot of pain. It was a mistake to buy from Sobha.
For the amount of money they charge - its just not worth it. The process of handing over was stressful and the realization was sharp that I had paid a premium price to buy a lot of pain. It was a mistake to buy from Sobha.
Thursday, August 6, 2009
Lenders agree to Sobha debt recast
Bangalore: Banks and financial institutions, which lent close to Rs 1,900 crore to Sobha Developers Ltd, have agreed to reschedule part of the debt.
Sobha Developers' managing director J C Shama said, "The company has managed to reschedule a substantial part of its loan portfolio." However, he did not elaborate. "Almost all the financial institutions have realigned our loans and our target is to bring down the debt to equity ratio of 0.5 by this fiscal from the current 0.85," he added. Of the total debt of Rs 1,900 crore, the Bangalore-based real estate developer will be able to repay Rs 1,130 crore on easier timelines.
Sobha has also refinanced/ rescheduled its near-term debt to match expected cash flows. The realty major is currently paying an average rate of interest of around 13% and has an annual interest outgo of Rs 240 crore and fixed overheads of Rs 60 crore. Sharma said, "We are looking at operational improvement and plans to bring down the debt through land monetisation, QIP and private equity deals."
Instead of paying Rs 960 crore and Rs 460 crore in FY10 and FY11, respectively, as per the rescheduled timeline, Sobha will pay an easier Rs 450 crore and Rs 690 crore in the period, the analyst said.
The company is looking to mop up between Rs 1,200 - Rs 1,400 crore by selling its land parcels at a premium. These parcels, totalling up to 475 acres, were valued at between Rs 600 and Rs 800 crore sometime back, according to market sources. However, Sharma refused to give any details .
Sobha recently raised around Rs 530 crore by diluting close to 22.5% equity through a qualified institutional placement (QIP). It intends to use Rs 410 crore of the QIP proceeds to reduce part of the debt.
Sobha Developers' managing director J C Shama said, "The company has managed to reschedule a substantial part of its loan portfolio." However, he did not elaborate. "Almost all the financial institutions have realigned our loans and our target is to bring down the debt to equity ratio of 0.5 by this fiscal from the current 0.85," he added. Of the total debt of Rs 1,900 crore, the Bangalore-based real estate developer will be able to repay Rs 1,130 crore on easier timelines.
Sobha has also refinanced/ rescheduled its near-term debt to match expected cash flows. The realty major is currently paying an average rate of interest of around 13% and has an annual interest outgo of Rs 240 crore and fixed overheads of Rs 60 crore. Sharma said, "We are looking at operational improvement and plans to bring down the debt through land monetisation, QIP and private equity deals."
Instead of paying Rs 960 crore and Rs 460 crore in FY10 and FY11, respectively, as per the rescheduled timeline, Sobha will pay an easier Rs 450 crore and Rs 690 crore in the period, the analyst said.
The company is looking to mop up between Rs 1,200 - Rs 1,400 crore by selling its land parcels at a premium. These parcels, totalling up to 475 acres, were valued at between Rs 600 and Rs 800 crore sometime back, according to market sources. However, Sharma refused to give any details .
Sobha recently raised around Rs 530 crore by diluting close to 22.5% equity through a qualified institutional placement (QIP). It intends to use Rs 410 crore of the QIP proceeds to reduce part of the debt.
Sobha profit dips to Rs 13 cr in Q1
BANGALORE: Realty major Sobha Developers has seen its net profit nosedive for the first quarter ended June 30, 2009, at Rs 12.7 crore, against Rs. 50.5 crore for the same period in FY09. Income from operations stood at Rs 177.1 crore (Rs 346.8 crore).
Sobha, which bore the aftershocks of the global economic slowdown, has seen a revival in fortunes in the first quarter compared with the fourth quarter ended March 31, 2009. Net profit in the first quarter increased 76.4% to Rs 12.7 crore from the fourth quarter, while total income was sequentially up 15.6% at Rs 178.6 crore.
“The real estate industry has seen clear signals of revival in demand during the first quarter. With the Indian economy growing at 6-7% and expected to achieve a higher growth rate in the next couple of years, real estate infrastructure industries are poised to play a more significant role. It will be a domestic-driven industry, growing at a much faster pace,” a company filing made with the bourses added.
On its part, Sobha Developers has realigned debt, brought on board a private equity partner, besides successfully completing a qualified institutional placement (QIP) raising Rs 500 crore.
These steps, the filing goes on to say, have added the much-needed comfort in operations and have helped the company focus on progress in various projects across key cities, including Bangalore. The company intends to focus on debt reduction and cost optimisation and believes it is well-equipped to capitalise on the early revival in the Indian economy.
As of June 30, 2009, Sobha Developers has completed 50 residential / commercial in-house projects and 146 contractual projects covering 31.9 million sq ft of built-up space.
Sobha Developers has currently 31 residential / commercial ongoing projects totalling 9.2 million sq ft. The company has contractual projects in several states like Karnataka, Kerala, Andhra Pradesh, Orissa, Tamil Nadu, Punjab, Haryana, the NCR, besides Maharashtra.
On the bourses, the Sobha scrip was down 1.2% at Rs 219, with 3.5 lakh shares changing hands on BSE.
Sobha, which bore the aftershocks of the global economic slowdown, has seen a revival in fortunes in the first quarter compared with the fourth quarter ended March 31, 2009. Net profit in the first quarter increased 76.4% to Rs 12.7 crore from the fourth quarter, while total income was sequentially up 15.6% at Rs 178.6 crore.
“The real estate industry has seen clear signals of revival in demand during the first quarter. With the Indian economy growing at 6-7% and expected to achieve a higher growth rate in the next couple of years, real estate infrastructure industries are poised to play a more significant role. It will be a domestic-driven industry, growing at a much faster pace,” a company filing made with the bourses added.
On its part, Sobha Developers has realigned debt, brought on board a private equity partner, besides successfully completing a qualified institutional placement (QIP) raising Rs 500 crore.
These steps, the filing goes on to say, have added the much-needed comfort in operations and have helped the company focus on progress in various projects across key cities, including Bangalore. The company intends to focus on debt reduction and cost optimisation and believes it is well-equipped to capitalise on the early revival in the Indian economy.
As of June 30, 2009, Sobha Developers has completed 50 residential / commercial in-house projects and 146 contractual projects covering 31.9 million sq ft of built-up space.
Sobha Developers has currently 31 residential / commercial ongoing projects totalling 9.2 million sq ft. The company has contractual projects in several states like Karnataka, Kerala, Andhra Pradesh, Orissa, Tamil Nadu, Punjab, Haryana, the NCR, besides Maharashtra.
On the bourses, the Sobha scrip was down 1.2% at Rs 219, with 3.5 lakh shares changing hands on BSE.
Tuesday, May 26, 2009
Sobha best at only disappointing and cheating its customers
I had booked a flat with Sobha for their reputation. I already own a flat built by a lesser known builder. I know the pain of dealing with builders and getting the job done. But I must say my experience with Sobha has been very very bad.I feel like having made a big mistake by entrusting them with my hard earned money!
They have all the bad things that you may encounter while dealing with builders. And they charge a hefty PREMIUM for it. They have delayed my project by 1.5 yrs as everyone including the lesser known builder is struggling with the liquidity (And I thought Sobha was big). OF course they are smart enough not to pay any money to the customers for the delay. On the contrary they are prompt in charging interest if your payments are delayed by a single day.
Simple stuff like keeping track of changes requested by the customer is made a mess of by the staff. And they want you to accept the poor quality work. They have hidden facts and manipulated the terms.
Stay away from paying premium for poor quality , unprofessional work!
They have all the bad things that you may encounter while dealing with builders. And they charge a hefty PREMIUM for it. They have delayed my project by 1.5 yrs as everyone including the lesser known builder is struggling with the liquidity (And I thought Sobha was big). OF course they are smart enough not to pay any money to the customers for the delay. On the contrary they are prompt in charging interest if your payments are delayed by a single day.
Simple stuff like keeping track of changes requested by the customer is made a mess of by the staff. And they want you to accept the poor quality work. They have hidden facts and manipulated the terms.
Stay away from paying premium for poor quality , unprofessional work!
SOBHA NAHIN DETA HAIN
I made the mistake of buying a flat in SOBHA PRIMROSE. The cheating habits come as a package with the flat. Maybe if one reads the fine print in the agreement, one would find a clause which states that the customer can be cheated to any degree at the discretion of SOBHA. They installed SOLAR HEATERS only for the 9th floor buyers at 60,000/-,while the rest were not forced to buy the same. The best of solar heaters doesn't cost too very much.The damages to the walls etc were pointed out but never corrected.The quality of doors and windows was absolutely disgusting.Luckily i found a buyer, otherwise i had already filed a case in the consumer court. The attitude of the people in the office too is very pompous.They behave as if they are PNC MENON. What started off as a world class product, was reduced to a sham in a very short time, only because of the jokers employed by Mr. Menon.
Sobha Developers pays Re. 1 per share
BANGALORE: Sobha Developers has reported a revenue of Rs. 974.74 crore and a profit after tax of Rs. 109.68 crore for the year ended March 31, 2009. Compared to the previous fiscal, revenues had declined by 32 per cent and profit after tax 52 per cent. The directors have recommended a dividend of Re. 1 per share of Rs. 10 each against Rs. 6.50 per share in the previous year. — Special Correspondent
Sobha Developers rises on plans of raising funds
The company's stock is the largest gainer in the real estate sector.
It has appreciated by 75 per cent from Rs 111.15 to Rs 194.25 on reports that the company was going to raise funds through Qualified Institutional Placements (QIP) issue.
The board of directors of the company has called an Extraordinary General Meeting (EGM) on June 17, 2009.
The Extraordinary General Meeting will consider the increase in the share capital of the company up to Rs 1,500 crore and the increase in the limit of investment by foreign institutional investors (FIIs) in the equity shares of the company up to 100 per cent of the equity share capital of the company.
The Bangalore-based real estate firm that engages primarily in the construction and development of contractual and residential projects, is looking to raise around Rs 1,000 crore via QIP issue.
The company has posted 53 per cent fall in net profit to Rs 107.80 crore (Rs 228.10 crore) for the financial year ended 31st March, 2009, while net sales have declined by 32 per cent to Rs 974 crore (Rs 1,431 crore) during the year.
The counter clocked combined volumes of four million shares in last week as against two million shares were traded in previous week.
The real estate sector has been facing a liquidity crunch for some time now but the situation has improved post the election results.
In fact, many industry players are encouraged by the response Indiabulls and Unitech have received. Indiabulls Real Estate has raised Rs 2,656.50 crore through QIP.
The company issued 14.36 crore equity shares at Rs 185 per share. Unitech had raised about Rs 1,615.25 crore through QIP. The promoter’s stake after the QIP has come down in both the cases.
Sobha Developers says gets 2.25 bln rupees for projects
MUMBAI (Reuters) - Realtor Sobha Developers Ltd said on Tuesday it sold stake in projects in Bangalore and other cities for a total consideration of 2.25 billion rupees from Bangalore-based Purna Partners.
The firm entered into a term sheet with Purna Partners and has received 250 million rupees from the investor on Tuesday.
Sobha Developers is identifying certain land parcels in Bangalore and other cities for residential, commercial and mixed development projects via a special purpose vehicle (SPV).
Sobha Developers will be the shareholder along with Purna Partners in the SPV and will also execute the projects as the principal contractor.
Saturday, May 2, 2009
Sobha may finalise fund raising options next week
Sobha Developers, Bangalore-based real estate developer, has announced that a meeting of its board of directors will be held on May 4 to consider the various alternatives available towards raising of additional capital. The company is evaluating offloading around 25 per cent stake through preferential allotment and is expected to also evaluate the QIP route. The company hopes to raise around Rs 350 crore.
Sobha has a debt of close to Rs 1,900 crore and is leveraged 1.6 times. The company is looking to sell around 200 acres of its 3,000 acre land bank in addition to roping in investors at various projects to settle debt. The company is also negotiating with 12 banks and financial institutions to restructure around Rs 850 crore of debt.
Monday, April 27, 2009
Sobha Developers - Sending False Status Reports to its Customers
Hi All
How are you all doing ? I found a few discrepancies in the status reporting of Sobha. For my apt they reported the Electrical switches have been fixed. I checked it yesterday, a month after their status report (Sobha Sunscape), and found it is incorrect. There was not even a single switch fixed. Same is the case is with doors. they reported all the internal doors have been fixed. Even after a month of their report I found the door of the balcony door is not yet fixed. These are minor gaps but still I have pointed it to them. I would suggest people to check the actual status w.r.t to what they are reporting.
Follow Ups:
============
what the hell are these Sobha people thinking. They seem to be taking us for a ride in every little thing. That's so damn pathetic.
Hello Guys, On numerous occasions, I felt Sobha has resorted to very cheap and unethical ways in doing business. I feel they are worse than a low class builder. I really doubt their construction quality also now. I will never recommend any of my friends to buy a Sobha apt based on my personal experience.
How are you all doing ? I found a few discrepancies in the status reporting of Sobha. For my apt they reported the Electrical switches have been fixed. I checked it yesterday, a month after their status report (Sobha Sunscape), and found it is incorrect. There was not even a single switch fixed. Same is the case is with doors. they reported all the internal doors have been fixed. Even after a month of their report I found the door of the balcony door is not yet fixed. These are minor gaps but still I have pointed it to them. I would suggest people to check the actual status w.r.t to what they are reporting.
Follow Ups:
============
what the hell are these Sobha people thinking. They seem to be taking us for a ride in every little thing. That's so damn pathetic.
Hello Guys, On numerous occasions, I felt Sobha has resorted to very cheap and unethical ways in doing business. I feel they are worse than a low class builder. I really doubt their construction quality also now. I will never recommend any of my friends to buy a Sobha apt based on my personal experience.
Saturday, April 25, 2009
Troubled Sobha Magnolia Resident
Sorry for the late posting... But I got to check this AM only as the CRM sent a mail, I had asked them to send a mail to all concerned and I am hoping they did so.
The Magnolia Residents continue to be taken for a ride "fullon" and nothing is being done. We cannot simply be mute spectators to happenings over there. I have gotten tired of being voluble in these sites as there is no use other than us exchanging verbose language it falls into deaf ears.
Every possible excuse, denials and delays in completion and handover of Magnolia Property that is the biggest CON GAME going on right now. I have taken possession in Mar09. Regd the flat. Interior work is on expedited pace. But what use? I cant move in May end as I thought.
They promised Mar end power. Then April 15th then 20th. Still no signs of power and elevators. I use the stairs to climb 12 flrs and wanted to do POOJA in April 3rd week again CANT DO IT!
I am just venting what else can I do? I am powerless frustrated and feel wronged and totally made fool of. We are watching and not doing anything.
Friends please come to the occassion and see if we can do something gather with and present with our feet.
In the final analysis I say all the investors, land owners have no interest in fighting. Only genuine owners who want to live there are fighting the nos for these are paltry single digits. So Sobha for all its transparency, honesty, publicly held status does not care a fig for small owners such as me and others.
Please think over the injustice done. It is high time someone pays for this denials & delays and taking responsibility for these and compensating the owners in due ways. It looks are cards are with the builder and we are just living in a Banana Republic with no rights at all.
- Troubled Sobha Magnolia Resident
==========================
Hello,
Fully understand your frustration... Although I am not as eager to occupy the place in May, I am concerned about the lack of communication from Sobha and their inability to forecast anything...
I am going to be in India for a couple of weeks, starting May 01 - partly to get the apartment registered on May 12, but more to understand what else we can do about this....
In addition to the delays, there is over Rs.1 lac of Service Tax that they have collected and over Rs.4 lacs extra they have charged for BWSSB and KEB. In all cases, they are refusing to provide receipts of what they have paid to IT department or the State Bodies... Also they are refusing to pay any compensation for the delay claiming that there were modifications...
I think we ought to formally register the Sobha Magnolia Owners Association (SMOA), and get all owners to formally authorise SMOA to file a case against Sobha for recovering the excess payments made... That may well be over Rs.8 crores (4-5 lacs * 160 apartments) and will pay for the ongoing maintenance of the buildings for many years...
Let me know how the meeting goes...
Regards
The Magnolia Residents continue to be taken for a ride "fullon" and nothing is being done. We cannot simply be mute spectators to happenings over there. I have gotten tired of being voluble in these sites as there is no use other than us exchanging verbose language it falls into deaf ears.
Every possible excuse, denials and delays in completion and handover of Magnolia Property that is the biggest CON GAME going on right now. I have taken possession in Mar09. Regd the flat. Interior work is on expedited pace. But what use? I cant move in May end as I thought.
They promised Mar end power. Then April 15th then 20th. Still no signs of power and elevators. I use the stairs to climb 12 flrs and wanted to do POOJA in April 3rd week again CANT DO IT!
I am just venting what else can I do? I am powerless frustrated and feel wronged and totally made fool of. We are watching and not doing anything.
Friends please come to the occassion and see if we can do something gather with and present with our feet.
In the final analysis I say all the investors, land owners have no interest in fighting. Only genuine owners who want to live there are fighting the nos for these are paltry single digits. So Sobha for all its transparency, honesty, publicly held status does not care a fig for small owners such as me and others.
Please think over the injustice done. It is high time someone pays for this denials & delays and taking responsibility for these and compensating the owners in due ways. It looks are cards are with the builder and we are just living in a Banana Republic with no rights at all.
- Troubled Sobha Magnolia Resident
==========================
Hello,
Fully understand your frustration... Although I am not as eager to occupy the place in May, I am concerned about the lack of communication from Sobha and their inability to forecast anything...
I am going to be in India for a couple of weeks, starting May 01 - partly to get the apartment registered on May 12, but more to understand what else we can do about this....
In addition to the delays, there is over Rs.1 lac of Service Tax that they have collected and over Rs.4 lacs extra they have charged for BWSSB and KEB. In all cases, they are refusing to provide receipts of what they have paid to IT department or the State Bodies... Also they are refusing to pay any compensation for the delay claiming that there were modifications...
I think we ought to formally register the Sobha Magnolia Owners Association (SMOA), and get all owners to formally authorise SMOA to file a case against Sobha for recovering the excess payments made... That may well be over Rs.8 crores (4-5 lacs * 160 apartments) and will pay for the ongoing maintenance of the buildings for many years...
Let me know how the meeting goes...
Regards
Sobha Developers plans to launch high-end apartment project in Bangalore
Even as the demand slump is forcing leading property developers across the country to prefer affordable housing in place of high value apartments, Bangalore-based Sobha Developers is firming up plans to launch a high-end apartment project in the city. The project, which would carry a price tag of about Rs 6,000 per sq ft, will be the first luxury apartment project from Sobha after crisis hit the Indian real estate sector.
According to sources, the J P Nagar project, to come up on 36 acres of land in J P Nagar in the south of the city, will be announced during the present year.
The company also plans to enter the affordable housing segment by announcing apartments in the Rs 25 lakh to Rs 30 lakh range in Coimbatore, Tamil Nadu.
Sobha’s move is in line with the industry trend to announce new launches in select areas and chosen price bands in the residential real estate segment. Availability of bank loans makes residential projects a safe bet for cash-strapped real estate developers.
Unlike other players who have lined up dozens of such project launches during the year, Sobha has decided to test the waters with just two launches in 2009-10.
“We are not in a hurry to announce future projects as our priority is to sell the ones nearing completion. Of about 2,000 flats / villas that are under various stages of construction across the country, Sobha has been able to sell about 50 per cent until now. The company expects to see the balance being sold off by the time the projects get completed within the next two and a half years,” a senior Sobha official said. He added that their projects in the neighbouring states of Kerala and Tamil Nadu are in greater demand than the ones in Bangalore.
Sobha’s plans for new investments come amidst its struggle to manage its Rs 2,000 crore debts. Company officials said the debt repayment plans are going ahead and the company will have no problems in funding the new projects.
“Of the total debts, about one-fourth has to be repaid this year. We are exploring various options, including issue of preferential shares and sale of land to generate the required amount,” company official said.
The company is also expecting a 25 per cent increase in its revenues from contract works for corporates like Infosys.
According to sources, the J P Nagar project, to come up on 36 acres of land in J P Nagar in the south of the city, will be announced during the present year.
The company also plans to enter the affordable housing segment by announcing apartments in the Rs 25 lakh to Rs 30 lakh range in Coimbatore, Tamil Nadu.
Sobha’s move is in line with the industry trend to announce new launches in select areas and chosen price bands in the residential real estate segment. Availability of bank loans makes residential projects a safe bet for cash-strapped real estate developers.
Unlike other players who have lined up dozens of such project launches during the year, Sobha has decided to test the waters with just two launches in 2009-10.
“We are not in a hurry to announce future projects as our priority is to sell the ones nearing completion. Of about 2,000 flats / villas that are under various stages of construction across the country, Sobha has been able to sell about 50 per cent until now. The company expects to see the balance being sold off by the time the projects get completed within the next two and a half years,” a senior Sobha official said. He added that their projects in the neighbouring states of Kerala and Tamil Nadu are in greater demand than the ones in Bangalore.
Sobha’s plans for new investments come amidst its struggle to manage its Rs 2,000 crore debts. Company officials said the debt repayment plans are going ahead and the company will have no problems in funding the new projects.
“Of the total debts, about one-fourth has to be repaid this year. We are exploring various options, including issue of preferential shares and sale of land to generate the required amount,” company official said.
The company is also expecting a 25 per cent increase in its revenues from contract works for corporates like Infosys.
Sobha Developers - Sobha Sunscape offers 2, 3BHK affordable units
The sluggish real estate market seems to have pushed almost all developers to jump into the affordable housing bandwagon. All of them, big and small have realised that this segment has the potential to prop up their sagging business. And they are wooing customers with the promise of offering quality homes for a lesser price.
“In these difficult time, consumers look at the brand name. When established names enter the affordable housing segment, consumers automatically go to them. They believe that these developers won’t compromise on the quality of finished products as well as raw materials and finer details that go into setting up a housing project — tiles, window panes, paint and other outdoor ammenities. It makes sense for top developers to cash in on that,” says Mitali Shairi of property consultants HJ Realtors.
Bangalore-based Sobha Developers has put up Sobha Sunscape, a project with 362 apartments, spread across 9 acres off Kanakapura Road on the outskirts of Bangalore. Till now, the company had been offering projects in the high-end and luxury category including villas, townhouses and cul de sac bungalow projects.
Sobha Sunscape offers two-bedroom and three-bedroom flats for Rs 37.99 lakh and Rs 40.10 lakh, respectively. Considering the prevailing rates, which are over Rs 50 lakh, prices of these units are affordaibe. According to the company, two-bedroom units will have a superbuilt area ranging from 1,276.34 sq ft and 1,317.78 sq ft, while three-bedroom units would have a superbuilt area ranging between 1,374.69 sq ft and 1,562.52 sq ft. The project will have 16 floors ,including the ground floor.
J C Sharma, managing director of Sobha Developers, said the real estate community has to focus on the affordable housing segment if they have to stay in the race. "The correction in the market was inevitable, considering the reasons that led to it, but the Indian real estate sector has the resilience to bounce back," he told FC Estate.
Company officials said that houses in the Sunscape project would be offered with a choice of options for home furniture for the living room, kitchen, bedroom, dining room and bathroom at an extra cost.
The company is targeting professionals who would take advantage of the connectivity factor of Kanakpura Road. Ammenities that Sobha Sunscape claims to offer include a clubhouse, gym, pantry and cafeteria, crèche, a mini market, an ATM, multi-purpose hall, stores, laundromat, clinic, indoor games hall, reading room, swimming pool, basket ball court and a children’s play area.
Kanakpura Road in southern Bangalore is one of the fastest developing areas in the city, company officials said and added that the USP of the project would be proximity to all major ring roads, including Mysore Road, Bannerghatta Road and Kanakpura ring road.
“In these difficult time, consumers look at the brand name. When established names enter the affordable housing segment, consumers automatically go to them. They believe that these developers won’t compromise on the quality of finished products as well as raw materials and finer details that go into setting up a housing project — tiles, window panes, paint and other outdoor ammenities. It makes sense for top developers to cash in on that,” says Mitali Shairi of property consultants HJ Realtors.
Bangalore-based Sobha Developers has put up Sobha Sunscape, a project with 362 apartments, spread across 9 acres off Kanakapura Road on the outskirts of Bangalore. Till now, the company had been offering projects in the high-end and luxury category including villas, townhouses and cul de sac bungalow projects.
Sobha Sunscape offers two-bedroom and three-bedroom flats for Rs 37.99 lakh and Rs 40.10 lakh, respectively. Considering the prevailing rates, which are over Rs 50 lakh, prices of these units are affordaibe. According to the company, two-bedroom units will have a superbuilt area ranging from 1,276.34 sq ft and 1,317.78 sq ft, while three-bedroom units would have a superbuilt area ranging between 1,374.69 sq ft and 1,562.52 sq ft. The project will have 16 floors ,including the ground floor.
J C Sharma, managing director of Sobha Developers, said the real estate community has to focus on the affordable housing segment if they have to stay in the race. "The correction in the market was inevitable, considering the reasons that led to it, but the Indian real estate sector has the resilience to bounce back," he told FC Estate.
Company officials said that houses in the Sunscape project would be offered with a choice of options for home furniture for the living room, kitchen, bedroom, dining room and bathroom at an extra cost.
The company is targeting professionals who would take advantage of the connectivity factor of Kanakpura Road. Ammenities that Sobha Sunscape claims to offer include a clubhouse, gym, pantry and cafeteria, crèche, a mini market, an ATM, multi-purpose hall, stores, laundromat, clinic, indoor games hall, reading room, swimming pool, basket ball court and a children’s play area.
Kanakpura Road in southern Bangalore is one of the fastest developing areas in the city, company officials said and added that the USP of the project would be proximity to all major ring roads, including Mysore Road, Bannerghatta Road and Kanakpura ring road.
Wednesday, April 22, 2009
Sobha Developers - Sobha Magnolia - Incomplete Handover
Sorry for the late posting... But I got to check this AM only as the CRM sent a mail, I had asked them to send a mail to all concerned and I am hoping they did so.
The Magnolia Residents continue to be taken for a ride "fullon" and nothing is being done. We cannot simply be mute spectators to happenings over there. I have gotten tired of being voluble in these sites as there is no use other than us exchanging verbose language it falls into deaf ears.
Every possible excuse, denials and delays in completion and handover of Magnolia Property that is the biggest CON GAME going on right now. I have taken possession in Mar09. Regd the flat. Interior work is on expedited pace. But what use? I cant move in May end as I thought.
They promised Mar end power. Then April 15th then 20th. Still no signs of power and elevators. I use the stairs to climb 12 flrs and wanted to do POOJA in April 3rd week again CANT DO IT!
I am just venting what else can I do? I am powerless frustrated and feel wronged and totally made fool of. We are watching and not doing anything.
Friends please come to the occasion and see if we can do something gather with and present with our feet.
In the final analysis I say all the investors, land owners have no interest in fighting. Only genuine owners who want to live there are fighting the nos for these are paltry single digits. So Sobha for all its transparency, honesty, publicly held status does not care a fig for small owners such as me and others.
Please think over the injustice done. It is high time someone pays for this denials & delays and taking responsibility for these and compensating the owners in due ways. It looks are cards are with the builder and we are just living in a Banana Republic with no rights at all.
Srinivas
The Magnolia Residents continue to be taken for a ride "fullon" and nothing is being done. We cannot simply be mute spectators to happenings over there. I have gotten tired of being voluble in these sites as there is no use other than us exchanging verbose language it falls into deaf ears.
Every possible excuse, denials and delays in completion and handover of Magnolia Property that is the biggest CON GAME going on right now. I have taken possession in Mar09. Regd the flat. Interior work is on expedited pace. But what use? I cant move in May end as I thought.
They promised Mar end power. Then April 15th then 20th. Still no signs of power and elevators. I use the stairs to climb 12 flrs and wanted to do POOJA in April 3rd week again CANT DO IT!
I am just venting what else can I do? I am powerless frustrated and feel wronged and totally made fool of. We are watching and not doing anything.
Friends please come to the occasion and see if we can do something gather with and present with our feet.
In the final analysis I say all the investors, land owners have no interest in fighting. Only genuine owners who want to live there are fighting the nos for these are paltry single digits. So Sobha for all its transparency, honesty, publicly held status does not care a fig for small owners such as me and others.
Please think over the injustice done. It is high time someone pays for this denials & delays and taking responsibility for these and compensating the owners in due ways. It looks are cards are with the builder and we are just living in a Banana Republic with no rights at all.
Srinivas
Sobha Sunscape offers 2, 3BHK affordable units
The sluggish real estate market seems to have pushed almost all developers to jump into the affordable housing bandwagon. All of them, big and small have realized that this segment has the potential to prop up their sagging business. And they are wooing customers with the promise of offering quality homes for a lesser price.
“In these difficult time, consumers look at the brand name. When established names enter the affordable housing segment, consumers automatically go to them. They believe that these developers won’t compromise on the quality of finished products as well as raw materials and finer details that go into setting up a housing project — tiles, window panes, paint and other outdoor ammenities. It makes sense for top developers to cash in on that,” says Mitali Shairi of property consultants HJ Realtors.
Bangalore-based Sobha Developers has put up Sobha Sunscape, a project with 362 apartments, spread across 9 acres off Kanakapura Road on the outskirts of Bangalore. Till now, the company had been offering projects in the high-end and luxury category including villas, townhouses and cul de sac bungalow projects.
Sobha Sunscape offers two-bedroom and three-bedroom flats for Rs 37.99 lakh and Rs 40.10 lakh, respectively. Considering the prevailing rates, which are over Rs 50 lakh, prices of these units are affordaibe. According to the company, two-bedroom units will have a superbuilt area ranging from 1,276.34 sq ft and 1,317.78 sq ft, while three-bedroom units would have a superbuilt area ranging between 1,374.69 sq ft and 1,562.52 sq ft. The project will have 16 floors ,including the ground floor.
J C Sharma, managing director of Sobha Developers, said the real estate community has to focus on the affordable housing segment if they have to stay in the race. "The correction in the market was inevitable, considering the reasons that led to it, but the Indian real estate sector has the resilience to bounce back," he told FC Estate.
Company officials said that houses in the Sunscape project would be offered with a choice of options for home furniture for the living room, kitchen, bedroom,
dining room and bathroom at an extra cost.
The company is targeting professionals who would take advantage of the connectivity factor of Kanakpura Road. Ammenities that Sobha Sunscape claims to offer include a clubhouse, gym, pantry and cafeteria, crèche, a mini market, an ATM, multi-purpose hall, stores, laundromat, clinic, indoor games hall, reading room, swimming pool, basket ball court and a children’s play area.
Kanakpura Road in southern Bangalore is one of the fastest developing areas in the city, company officials said and added that the USP of the project would be proximity to all major ring roads, including Mysore Road, Bannerghatta Road and Kanakpura ring road.
“In these difficult time, consumers look at the brand name. When established names enter the affordable housing segment, consumers automatically go to them. They believe that these developers won’t compromise on the quality of finished products as well as raw materials and finer details that go into setting up a housing project — tiles, window panes, paint and other outdoor ammenities. It makes sense for top developers to cash in on that,” says Mitali Shairi of property consultants HJ Realtors.
Bangalore-based Sobha Developers has put up Sobha Sunscape, a project with 362 apartments, spread across 9 acres off Kanakapura Road on the outskirts of Bangalore. Till now, the company had been offering projects in the high-end and luxury category including villas, townhouses and cul de sac bungalow projects.
Sobha Sunscape offers two-bedroom and three-bedroom flats for Rs 37.99 lakh and Rs 40.10 lakh, respectively. Considering the prevailing rates, which are over Rs 50 lakh, prices of these units are affordaibe. According to the company, two-bedroom units will have a superbuilt area ranging from 1,276.34 sq ft and 1,317.78 sq ft, while three-bedroom units would have a superbuilt area ranging between 1,374.69 sq ft and 1,562.52 sq ft. The project will have 16 floors ,including the ground floor.
J C Sharma, managing director of Sobha Developers, said the real estate community has to focus on the affordable housing segment if they have to stay in the race. "The correction in the market was inevitable, considering the reasons that led to it, but the Indian real estate sector has the resilience to bounce back," he told FC Estate.
Company officials said that houses in the Sunscape project would be offered with a choice of options for home furniture for the living room, kitchen, bedroom,
dining room and bathroom at an extra cost.
The company is targeting professionals who would take advantage of the connectivity factor of Kanakpura Road. Ammenities that Sobha Sunscape claims to offer include a clubhouse, gym, pantry and cafeteria, crèche, a mini market, an ATM, multi-purpose hall, stores, laundromat, clinic, indoor games hall, reading room, swimming pool, basket ball court and a children’s play area.
Kanakpura Road in southern Bangalore is one of the fastest developing areas in the city, company officials said and added that the USP of the project would be proximity to all major ring roads, including Mysore Road, Bannerghatta Road and Kanakpura ring road.
Sunday, April 19, 2009
Sobha Developers - Panchkula to soon have first five-star boutique hotel
Panchkula, satellite township of Chandigarh will soon have its first five-star boutique hotel, The Bella Vista, which will be part of an upcoming shopping mall in City Centre, Sector 5, Panchkula. The hotel project is almost in its final stage and is expected to start by July 2009. Sobha Developers Limited will develop the project.
Confirming the project, Chetan Sood, Marketing Manager, The Bella Vista Shopping Mall and Hotel, Panchkula, said that the hotel is housed on the top three floors of the mall. It has terrace gardens will offer an unobstructed view of the Himalayan Mountains. “A unique feature of this hotel is the six luxury suites, which will have their own private plunge pools and an additional six studios and suites with private, shared swimming pools,” Sood confirms. He reveals that the hotel will have 50 rooms including 12-15 suites; the rest of rooms will be Executive and Standard rooms.
The speciality restaurant for 50 covers and round the clock coffee shop with a roof top garden will offer international cuisines. The banquet and conference facilities at The Bella Vista will provide a venue for business meets and private functions. Other facilities in the hotel include a spa, swimming pool and Health Club.
Confirming the project, Chetan Sood, Marketing Manager, The Bella Vista Shopping Mall and Hotel, Panchkula, said that the hotel is housed on the top three floors of the mall. It has terrace gardens will offer an unobstructed view of the Himalayan Mountains. “A unique feature of this hotel is the six luxury suites, which will have their own private plunge pools and an additional six studios and suites with private, shared swimming pools,” Sood confirms. He reveals that the hotel will have 50 rooms including 12-15 suites; the rest of rooms will be Executive and Standard rooms.
The speciality restaurant for 50 covers and round the clock coffee shop with a roof top garden will offer international cuisines. The banquet and conference facilities at The Bella Vista will provide a venue for business meets and private functions. Other facilities in the hotel include a spa, swimming pool and Health Club.
Thursday, April 16, 2009
Top Europeon fund may invest Rs 300 cr in Sobha
Redevco, one of Europe’s largest real estate investment and development firms, with a $10 billion portfolio, is understood to be looking at investing around Rs 300 crore in various projects of Bangalore-based Sobha Developers
Redevco, part of the diversified Cafro Holdings, which is into private equity, retail, financial services and renewable energy, in addition to real estate development, set up office in India in late 2008. If the discussions with Sobha fructify, it will be its first investment in India.
Investment banking sources indicated that Redevco has had initial discussions with the management of Sobha Developers, which is mired in debt like many of its peers. The investment, if it materialises, is expected to be tied up by September 2009, they say.
Private equity investments into Indian real estate have been slowing over the past three quarters and this deal is expected to be a major one. While Redevco said it had nothing to comment, Sobha has been maintaining that it is in talks with various funds and nothing has been finalised.
Over the past two quarters, Sobha has been aggressively looking at three options to reduce its debt burden of close to Rs 1,900 crore, a leverage of 1.6 times.
The company, which has Infosys as one of its major clients, is looking to raise around Rs 850 cr by selling around 200 acres of its 3,000 acre land bank, offloading up to 49 per cent stake through special purpose vehicles and to offload up to 25 per cent stake at the enterprise level.
Sobha is understood to have identified around 150 acres of land on which projects can be implemented through special purpose vehicles by divesting stakes.
The company is also engaged with around 12 banks and financial institutions to restructure around Rs 850 cr of debt that will be due for payment during the next 18 months.
Banking sources indicate Sobha has been able to get a nod for a part of that sum and talks are also on with mutual funds to roll over Rs 350 cr of debt.
Redevco, part of the diversified Cafro Holdings, which is into private equity, retail, financial services and renewable energy, in addition to real estate development, set up office in India in late 2008. If the discussions with Sobha fructify, it will be its first investment in India.
Investment banking sources indicated that Redevco has had initial discussions with the management of Sobha Developers, which is mired in debt like many of its peers. The investment, if it materialises, is expected to be tied up by September 2009, they say.
Private equity investments into Indian real estate have been slowing over the past three quarters and this deal is expected to be a major one. While Redevco said it had nothing to comment, Sobha has been maintaining that it is in talks with various funds and nothing has been finalised.
Over the past two quarters, Sobha has been aggressively looking at three options to reduce its debt burden of close to Rs 1,900 crore, a leverage of 1.6 times.
The company, which has Infosys as one of its major clients, is looking to raise around Rs 850 cr by selling around 200 acres of its 3,000 acre land bank, offloading up to 49 per cent stake through special purpose vehicles and to offload up to 25 per cent stake at the enterprise level.
Sobha is understood to have identified around 150 acres of land on which projects can be implemented through special purpose vehicles by divesting stakes.
The company is also engaged with around 12 banks and financial institutions to restructure around Rs 850 cr of debt that will be due for payment during the next 18 months.
Banking sources indicate Sobha has been able to get a nod for a part of that sum and talks are also on with mutual funds to roll over Rs 350 cr of debt.
Sobha Developers defers plans to raise equity
Sobha Developers has deferred plans to raise equity through a rights issue, reports CNBC-TV18, quoting sources. The company had announced plans to raise about Rs 250–300 crore via rights issue in August 2008. However, market analysts say this could be a problem because the promoters cannot really subscribe to their share. CNBC-TV18's correspondent Priyanka Ghosh reports.
Sobha Developers had announced the raising of equity via the rights issue in August 2008. We understand from sources that this has been put on hold for the time being at least because of tough market conditions, as the company says.
Sobha Developers had plans to raise about Rs 250–300 crore via the rights issue. It has 87% promoter holding in the company and market analysts say that this could be a problem because the promoters cannot really subscribe to their share and that is really the reason why this has not worked out. However, Sobha Developers has, in fact plans, to raise about Rs 900 crore going forward. They will do this through land sales and also some kind of equity infusion at the SPV level, which they have confirmed. Their landbank is about 3,000 acres. So, there are no problems there.
There are 23 acres under construction and the rest not even under construction. There are no assets in the books of Sobha Developers that are income generating. So, it looks tough that it would find a buyer in this market. It has a debt of Rs 1,850 crore in its books.
Sobha Developers had announced the raising of equity via the rights issue in August 2008. We understand from sources that this has been put on hold for the time being at least because of tough market conditions, as the company says.
Sobha Developers had plans to raise about Rs 250–300 crore via the rights issue. It has 87% promoter holding in the company and market analysts say that this could be a problem because the promoters cannot really subscribe to their share and that is really the reason why this has not worked out. However, Sobha Developers has, in fact plans, to raise about Rs 900 crore going forward. They will do this through land sales and also some kind of equity infusion at the SPV level, which they have confirmed. Their landbank is about 3,000 acres. So, there are no problems there.
There are 23 acres under construction and the rest not even under construction. There are no assets in the books of Sobha Developers that are income generating. So, it looks tough that it would find a buyer in this market. It has a debt of Rs 1,850 crore in its books.
Sobha Developers - Not Transparent, Cheaters, Never meet their deadlines
Like everyone else, even i am a disgruntled Sobha Customer. Had i known that they would turn out like this, i would have never given them a single cent. Below is the summary of my experience with them.
Booked an apartment in one of Sobha’s Project during November 2006. I was told that the delivery would be sometime during mid 2008. Its now April 2009, but till date there is no final word about handover. They have extended this for about 3 times already now.
Initially due to bank loan and other formalities, my payment was delayed for about 3 days. Just 3 days only, and those crooks charged me an interest @ 24% p.a. Seriously I never expected they would do that. But then it was ok. It was written in their agreement that they would do so, so i was fine with it. After that their CRM use to send me monthly reports by email with photos. But then sometime in Feb 2008, even that stopped. They stopped sending monthly updates and they informed me saying that they would be sending quaterly updates instead. Again, i didnt really have much say in all this, so i just took everything they threw at me.
Till date they have now almost collected 90% of the amount of the house. As per the agreement, they were suppose to pay me Rs.10,000 monthly compensation in case there is any delay beyond Feb 2009. Now this period is also after 6 months of grace. So effectively they were suppose to complete the project by Aug 2008. Now when i ask them about the compensation, their CRM informs me that all of it will be settled during the final handover. Even at my end, i need to do some fair bit of financial planning to cough out the final extra cash that would be needed during the handover. But, Sobha’s CRM just refuses to tell me any average figure. I have some serious suspicions that in the end, they might just add some arbitrary charges and set everything off against it and finally i will have to pay for everything. Already this delay of more than a year has effectively costed me around Rs.10 lacs i don't know whats going to come up next.
Some points i would like to summarize:
1. Sobha is NOT transparent in their dealings with their customers. They arbitrarily include many charges for which there is absolutely no justification or reason. They collect 3 times or even 4 times the actual charges that Sobha incurs for Electricity, Water and etc. The worst is the lawyer fees, if you notice, they charge anywhere between Rs.10000 to Rs.30000 as legal fees. Come on, which lawyer in India charges that much money to draft simple agreements? Even in the US lawyers are not so expensive.
2. Sobha projects are always delayed. So my suggestion to prospective buyers would be to buy only completed flats and never to buy if its incomplete. I repeat, completed means, should be ready to move in. There is a huge difference between completed flats and flats ready to move in.
3. Sobha Agreements are insanely one sided. I have never seen such agreements anywhere. They are not meant to protect the customer, but to kill the customer. Initally the sales guy might give you many sweet talks, but make sure you read the fine lines in the agreement.
4. The main reason why people choose developers like Sobha is because of their so called customer satisfaction, transparency and reliability. Where as now, all of these are simply defeated. So you pay a premium not for these extra services, but to get yourself into an never ending trap.
5. Personally the reason why i chose Sobha and agreed to pay a premium for their apartment, is only for one reason - their commitment to its customers. But now all of that is just broken. If we had to deal with so much issues, then why should we pay premium for their houses?
6. Quality of their houses - Well i havent yet owned any. So i cant comment. But i have read other people’s comments here, so i can safelt assume that its not so great. Its pretty similar to what anyone else would give you.
My Ratings:
Sobha developers - Transparent in dealing : 2 / 10
Sobha developers - Customer Service : 2 / 10 (repeatedly write emails to get one word reply from them)
Sobha developers - In keeping its promises : 0 / 10
A disgruntled sobha customer.
Booked an apartment in one of Sobha’s Project during November 2006. I was told that the delivery would be sometime during mid 2008. Its now April 2009, but till date there is no final word about handover. They have extended this for about 3 times already now.
Initially due to bank loan and other formalities, my payment was delayed for about 3 days. Just 3 days only, and those crooks charged me an interest @ 24% p.a. Seriously I never expected they would do that. But then it was ok. It was written in their agreement that they would do so, so i was fine with it. After that their CRM use to send me monthly reports by email with photos. But then sometime in Feb 2008, even that stopped. They stopped sending monthly updates and they informed me saying that they would be sending quaterly updates instead. Again, i didnt really have much say in all this, so i just took everything they threw at me.
Till date they have now almost collected 90% of the amount of the house. As per the agreement, they were suppose to pay me Rs.10,000 monthly compensation in case there is any delay beyond Feb 2009. Now this period is also after 6 months of grace. So effectively they were suppose to complete the project by Aug 2008. Now when i ask them about the compensation, their CRM informs me that all of it will be settled during the final handover. Even at my end, i need to do some fair bit of financial planning to cough out the final extra cash that would be needed during the handover. But, Sobha’s CRM just refuses to tell me any average figure. I have some serious suspicions that in the end, they might just add some arbitrary charges and set everything off against it and finally i will have to pay for everything. Already this delay of more than a year has effectively costed me around Rs.10 lacs i don't know whats going to come up next.
Some points i would like to summarize:
1. Sobha is NOT transparent in their dealings with their customers. They arbitrarily include many charges for which there is absolutely no justification or reason. They collect 3 times or even 4 times the actual charges that Sobha incurs for Electricity, Water and etc. The worst is the lawyer fees, if you notice, they charge anywhere between Rs.10000 to Rs.30000 as legal fees. Come on, which lawyer in India charges that much money to draft simple agreements? Even in the US lawyers are not so expensive.
2. Sobha projects are always delayed. So my suggestion to prospective buyers would be to buy only completed flats and never to buy if its incomplete. I repeat, completed means, should be ready to move in. There is a huge difference between completed flats and flats ready to move in.
3. Sobha Agreements are insanely one sided. I have never seen such agreements anywhere. They are not meant to protect the customer, but to kill the customer. Initally the sales guy might give you many sweet talks, but make sure you read the fine lines in the agreement.
4. The main reason why people choose developers like Sobha is because of their so called customer satisfaction, transparency and reliability. Where as now, all of these are simply defeated. So you pay a premium not for these extra services, but to get yourself into an never ending trap.
5. Personally the reason why i chose Sobha and agreed to pay a premium for their apartment, is only for one reason - their commitment to its customers. But now all of that is just broken. If we had to deal with so much issues, then why should we pay premium for their houses?
6. Quality of their houses - Well i havent yet owned any. So i cant comment. But i have read other people’s comments here, so i can safelt assume that its not so great. Its pretty similar to what anyone else would give you.
My Ratings:
Sobha developers - Transparent in dealing : 2 / 10
Sobha developers - Customer Service : 2 / 10 (repeatedly write emails to get one word reply from them)
Sobha developers - In keeping its promises : 0 / 10
A disgruntled sobha customer.
Thursday, April 9, 2009
Leading real estate cos headed for a debt trap?
Experts say several companies may get stuck in a debt trap as the quantum of debt is too high when compared with the expected cash flow generation in the next fiscal.
Real estate developers say the worst for the sector is over. But the debt in several of the leading companies’ balance sheet suggest a different story. Experts say several companies may get stuck in a debt trap as the quantum of debt is too high when compared with the expected cash flow generation in the next fiscal.
People familiar with the developments say DLF’s debt is around Rs. 15,000 crore. On an average, the company delivers 10-11 million sq. ft per year. If we take the average cost of interest at 13%, DLF’s interest burden for FY10 will be Rs. 1,950 crore. That means the company will have to pay Rs. 163 crore every month and that’s just the interest component. Even if DLF is able to sell 10 million sq. feet at an average price of Rs. 3,000 a sq. foot, it will generate sales of Rs. 3,000 crore. However, typically just 20% of booking amount is paid upfront by customers. Going by that logic, DLF can expect an inflow of Rs. 600 crore. Compare that to the Rs. 1,950 crore of interest burden that DLF will have to pay in FY10.
Unitech’s story, sources say, is no different. With a debt burden of Rs. 8,000 crore, it will have to bear an interest burden of Rs. 1,040 crore. Assuming that one apartment of Unitech sells for Rs. 40 lakh, the company will have to pre-sell 10,400 apartments to generate Rs. 1040 crore.
There are others too in the same boat. HDIL’s debt figure is Rs. 4,000 crore. The company is launching projects aggressively. It had two launches in March and five others are planned later this year. Not surprising, since at 13% interest cost, the firm will have to bear Rs. 520 crore just as interest burden. The question several analysts are asking is will the pre-sale amount suffice for both servicing the interest cost and construction costs as well? Or is a delay in these new projects inevitable?
Sobha Developers have just 1,500 apartments ready for sale. The company has debt of Rs1,850 crore and the interest that it will have to pay is Rs. 241 crore. Sobha Developers has two launches planned later this year. While Sobha’s land bank may be 3,000 acres, just 23 acres is under construction. Company sources have confirmed that it will take additional debt to service interest cost burden in FY10. And industry players fear, several others will follow suit.
Aggressive asset sales will be another characteristic the year ahead in a desperate attempt to generate cash flow. But in the current environment, there are few takers. Unitech’s Saket property still remain unsold after four months. Experts say, like DLF and Puravankara have done in the past, developers may have to surrender back auctioned land to state governments.
We are at the beginning of earnings season, and simply going by the options several companies have to generate cash flow, it looks like FY10 is going to be a tougher challenge than the year gone by.
Real estate developers say the worst for the sector is over. But the debt in several of the leading companies’ balance sheet suggest a different story. Experts say several companies may get stuck in a debt trap as the quantum of debt is too high when compared with the expected cash flow generation in the next fiscal.
People familiar with the developments say DLF’s debt is around Rs. 15,000 crore. On an average, the company delivers 10-11 million sq. ft per year. If we take the average cost of interest at 13%, DLF’s interest burden for FY10 will be Rs. 1,950 crore. That means the company will have to pay Rs. 163 crore every month and that’s just the interest component. Even if DLF is able to sell 10 million sq. feet at an average price of Rs. 3,000 a sq. foot, it will generate sales of Rs. 3,000 crore. However, typically just 20% of booking amount is paid upfront by customers. Going by that logic, DLF can expect an inflow of Rs. 600 crore. Compare that to the Rs. 1,950 crore of interest burden that DLF will have to pay in FY10.
Unitech’s story, sources say, is no different. With a debt burden of Rs. 8,000 crore, it will have to bear an interest burden of Rs. 1,040 crore. Assuming that one apartment of Unitech sells for Rs. 40 lakh, the company will have to pre-sell 10,400 apartments to generate Rs. 1040 crore.
There are others too in the same boat. HDIL’s debt figure is Rs. 4,000 crore. The company is launching projects aggressively. It had two launches in March and five others are planned later this year. Not surprising, since at 13% interest cost, the firm will have to bear Rs. 520 crore just as interest burden. The question several analysts are asking is will the pre-sale amount suffice for both servicing the interest cost and construction costs as well? Or is a delay in these new projects inevitable?
Sobha Developers have just 1,500 apartments ready for sale. The company has debt of Rs1,850 crore and the interest that it will have to pay is Rs. 241 crore. Sobha Developers has two launches planned later this year. While Sobha’s land bank may be 3,000 acres, just 23 acres is under construction. Company sources have confirmed that it will take additional debt to service interest cost burden in FY10. And industry players fear, several others will follow suit.
Aggressive asset sales will be another characteristic the year ahead in a desperate attempt to generate cash flow. But in the current environment, there are few takers. Unitech’s Saket property still remain unsold after four months. Experts say, like DLF and Puravankara have done in the past, developers may have to surrender back auctioned land to state governments.
We are at the beginning of earnings season, and simply going by the options several companies have to generate cash flow, it looks like FY10 is going to be a tougher challenge than the year gone by.
Lack of or No Transparency - Sobha Developers
The association should go to consumer court if Sobha doesn’t respond in right way. In Indranagar, the charges for 14 flats (15 meter connection) is only 3.75 lacs including under table bribes. And BWSSB is about 2.00 lacs, per FLAT it works out to Rs.42,000 (Elec + Bwssb) !!
Moreover Sobha is known to market their flats to techies and soft mannered people only, their ploy is to market flats with ’MBA’ girls who are groomed to rob money.
The registration charges, BWSSB, Electricity and many deposits are nothing but DIRECT robbing.
I have also been cheated by small builder but not to the tune of Lacs of rupees, but few thousands. It’s better to buy smaller flats in small apartments, the charges are ’lot transparent’ compared to the big cheats.
Moreover Sobha is known to market their flats to techies and soft mannered people only, their ploy is to market flats with ’MBA’ girls who are groomed to rob money.
The registration charges, BWSSB, Electricity and many deposits are nothing but DIRECT robbing.
I have also been cheated by small builder but not to the tune of Lacs of rupees, but few thousands. It’s better to buy smaller flats in small apartments, the charges are ’lot transparent’ compared to the big cheats.
Customer is always cheated ~ Courtesy Sobha Developers Ltd
Please beware of Sobha Developers.... Few facts we want to share so that you don’t do same mistake:
One example how Sobha cheats, rather uses its brand to cheat customers. When we booked the Flat, they quoted following charges:
BWSSB - Rs: 63,314/-
KEB Charges: Rs: 55,399/-
But when we went for Registration , they tripled the charges (Given Below). We dont have any choice, as it was delayed 1 year 8 months, we want to register ASAP. More over we trusted the Sobha brand.
BWSSB:Rs: 2,08,935/-
KEB Charges: Rs: 1,07,633/-
Later one gentle man volunteered and collected the information from Bescom and KEB about the Sobha Payments (Given in the following mails from Mr C N Kumar, he requested to remove his mail-Id).
Usually people goto Sobha, because the brand it established. But Sobha used its Brand for profiteering.
Some more facts:
1) Always the sale agreemt is one-sided, this may be true with all big builders. In all cases Customers have to compromise. Because we trust Sobha brand , we blindly sign on the agreement.
2) Please worry about the Carpet area, Sobha is worst in that.
3) Substandard quality (Sewage pipe is broken in one block), water tickling in my bathroom from above flat . They fixed it but chances of repeating are there. Surprised , dont you.
4) Sobha 99.99% of times delivers late. And they evade the late penaly charges 99.99% of times. Take my case, While selecting bathroom tiles i selected tiles which look good. They say its not part of the package, and i should pay extra.I paid it(~ 15,000/-). you should pay extra since the standard tiles they show are so ugly. But the impact of selecting good looking tiles costed us Rs:1,80,000/- later. You know why, Sobha didnt pay us late delivery penalty charges saying you altered the tiles. Any alteration you make, you dont deserve late handover charges. Double whammy.
5)What ever profit loss they make because of later delivery, they recover with triple profits: BWSSB and KEB charges.
6) Always customer is looser, i mean we.
From: C N Kumar
To: Sobha Iris Owners
Sent: Wednesday, March 18, 2009 9:01:46 AM
Subject: [sobhairisowners] BWSSB Charges
Dear Fellow Owners,
Sobha paid as follows to BWSSB for water and sewage connection charges:
For water connection- Rs 2,00,74,100
For GBWSP charges- Rs 53,76,000
Total - Rs 2,54,50,100 say Rs 2.55 crores
I have this information from BWSSB collected under RTI Act. BWSSB also confirms they are yet to provide the connection.
I have been charged Rs 2.21 lacs by Sobha towards BWSSB charges. Assuming each of us have been charged the same Sobha they have collected Rs 7.43
crores. The difference is almost Rs 5 Crores! Worth fighting for?
I am yet to get some information from BDA regarding our OC. Once I have this I will propose a POA to the group.
As of now we have 40 members in this group.
Best regards
C N Kumar
----- Forwarded Message ----
From: C N Kumar
To: sobha_iris@yahoogroups.com
Sent: Friday, March 6, 2009 5:00:18 PM
Subject: [sobha_iris] BESCOM deposit etc.
I have a formal letter from BESCOM regarding the payments made by Sobha for the electricity connections to the flats collected under the Right To Information Act:
Deposit- 28,51,800 ( Rs 7560 per flat for 336 flats. Balance for 2 other connections ( maybe general lighting and club house) plus meter security deposit. These payments were made on 23 May 2007). Supervision charges - Rs 11,94,780
Total= 40,46,580 for 336 flats.
Supervision charges are usually 10 % of the estimated work and material for bringing power from the nearest point. This is about Rs 1.1 crores.
The total cost should be in the region of Rs 1.5 crores. Sobha has collected from each of us Rs 1.14 lacs or Rs 3.83 crores. Should we not get answers for this?
I will similarly get the figures from BWSSB
Best regards
C N Kumar
One example how Sobha cheats, rather uses its brand to cheat customers. When we booked the Flat, they quoted following charges:
BWSSB - Rs: 63,314/-
KEB Charges: Rs: 55,399/-
But when we went for Registration , they tripled the charges (Given Below). We dont have any choice, as it was delayed 1 year 8 months, we want to register ASAP. More over we trusted the Sobha brand.
BWSSB:Rs: 2,08,935/-
KEB Charges: Rs: 1,07,633/-
Later one gentle man volunteered and collected the information from Bescom and KEB about the Sobha Payments (Given in the following mails from Mr C N Kumar, he requested to remove his mail-Id).
Usually people goto Sobha, because the brand it established. But Sobha used its Brand for profiteering.
Some more facts:
1) Always the sale agreemt is one-sided, this may be true with all big builders. In all cases Customers have to compromise. Because we trust Sobha brand , we blindly sign on the agreement.
2) Please worry about the Carpet area, Sobha is worst in that.
3) Substandard quality (Sewage pipe is broken in one block), water tickling in my bathroom from above flat . They fixed it but chances of repeating are there. Surprised , dont you.
4) Sobha 99.99% of times delivers late. And they evade the late penaly charges 99.99% of times. Take my case, While selecting bathroom tiles i selected tiles which look good. They say its not part of the package, and i should pay extra.I paid it(~ 15,000/-). you should pay extra since the standard tiles they show are so ugly. But the impact of selecting good looking tiles costed us Rs:1,80,000/- later. You know why, Sobha didnt pay us late delivery penalty charges saying you altered the tiles. Any alteration you make, you dont deserve late handover charges. Double whammy.
5)What ever profit loss they make because of later delivery, they recover with triple profits: BWSSB and KEB charges.
6) Always customer is looser, i mean we.
From: C N Kumar
To: Sobha Iris Owners
Sent: Wednesday, March 18, 2009 9:01:46 AM
Subject: [sobhairisowners] BWSSB Charges
Dear Fellow Owners,
Sobha paid as follows to BWSSB for water and sewage connection charges:
For water connection- Rs 2,00,74,100
For GBWSP charges- Rs 53,76,000
Total - Rs 2,54,50,100 say Rs 2.55 crores
I have this information from BWSSB collected under RTI Act. BWSSB also confirms they are yet to provide the connection.
I have been charged Rs 2.21 lacs by Sobha towards BWSSB charges. Assuming each of us have been charged the same Sobha they have collected Rs 7.43
crores. The difference is almost Rs 5 Crores! Worth fighting for?
I am yet to get some information from BDA regarding our OC. Once I have this I will propose a POA to the group.
As of now we have 40 members in this group.
Best regards
C N Kumar
----- Forwarded Message ----
From: C N Kumar
To: sobha_iris@yahoogroups.com
Sent: Friday, March 6, 2009 5:00:18 PM
Subject: [sobha_iris] BESCOM deposit etc.
I have a formal letter from BESCOM regarding the payments made by Sobha for the electricity connections to the flats collected under the Right To Information Act:
Deposit- 28,51,800 ( Rs 7560 per flat for 336 flats. Balance for 2 other connections ( maybe general lighting and club house) plus meter security deposit. These payments were made on 23 May 2007). Supervision charges - Rs 11,94,780
Total= 40,46,580 for 336 flats.
Supervision charges are usually 10 % of the estimated work and material for bringing power from the nearest point. This is about Rs 1.1 crores.
The total cost should be in the region of Rs 1.5 crores. Sobha has collected from each of us Rs 1.14 lacs or Rs 3.83 crores. Should we not get answers for this?
I will similarly get the figures from BWSSB
Best regards
C N Kumar
Sobha Developers - Cheating Innocent Customers
Sobha team and brand is not the same what it was 3 years ago. We bought Sobha Daffodill in HSR Layout, Bangalore in September 2006. The delivery date was March 2008 and it has been delayed to November 2009. Sobha has not made any effort to expedite the project, rather they are fooling new buyers by offering crazy schemes like "3bhk at 40% discount, occupation by May 2009". Please do not fall in the Sobha trap, as once you sign the contract and pay money, the builder will take you for a ride.
Sobha is continuously sending us project getting late information. Every time they say the project will be ready in next 3 months, and as a buyer you should start planning the interiors, shifting etc. However, just 15 days to the handover they send you a communication that the project is further delayed by 3-6 months. Reason - downturn in the market & they are having cash problems.
Below is an excerpt from their official communication:
"We regret to inform you that due to the unexpected slowdown, liquidity and financial crunch, the construction work of Sobha Daffodil slowed down over the past 3 to 4 months. We are sure you will understand the situation that we are in; we request you to bear with us for this additional delay and sincerely apologize for it. Commencement for handover of the apartments for interiors will start now wef 30th Nov ’09. Please do understand that the apartment will be handed over for interiors only.
If in their existing projects, if they are having cash problems, how can they start other projects and commit delivery by May 2009. It is nothing but plain cheating and fraudulent activity.
The Sobha brand name is no more. They are here to cheat innocent people.
Sobha is continuously sending us project getting late information. Every time they say the project will be ready in next 3 months, and as a buyer you should start planning the interiors, shifting etc. However, just 15 days to the handover they send you a communication that the project is further delayed by 3-6 months. Reason - downturn in the market & they are having cash problems.
Below is an excerpt from their official communication:
"We regret to inform you that due to the unexpected slowdown, liquidity and financial crunch, the construction work of Sobha Daffodil slowed down over the past 3 to 4 months. We are sure you will understand the situation that we are in; we request you to bear with us for this additional delay and sincerely apologize for it. Commencement for handover of the apartments for interiors will start now wef 30th Nov ’09. Please do understand that the apartment will be handed over for interiors only.
If in their existing projects, if they are having cash problems, how can they start other projects and commit delivery by May 2009. It is nothing but plain cheating and fraudulent activity.
The Sobha brand name is no more. They are here to cheat innocent people.
Sobha Misleading all the way
I would highly recommend that you avoid sobha. I wish i had taken the advice of a friend before i made this booking. Never mind the nearly 3 year delay for the sobha daffodil project or the constant misleading statements that their CRM dept. makes. They are not the "A" grade builders that they advertise. Even in good times they take customers for a ride but now since they are heavily in debt they milk their customers dry.
Consider this that even after paying 80,000 extra for water and electricity post agreement they are now demanding we pay another ~2 lakhs or else no handover. They are also refusing to refund the service tax that government has rescinded stating that they have already made the payments but at the same time are unwilling to provide any receipts. If you are late in making a payment by a single date their ever vigilant finance dept will gleefully impose fines and penalties on you by the thousands but they are delayed by 3 years and you will be lucky to get a paltry sum if at all. Once you sign on the dottled line be prepared for a long list of surprises.
Consider this that even after paying 80,000 extra for water and electricity post agreement they are now demanding we pay another ~2 lakhs or else no handover. They are also refusing to refund the service tax that government has rescinded stating that they have already made the payments but at the same time are unwilling to provide any receipts. If you are late in making a payment by a single date their ever vigilant finance dept will gleefully impose fines and penalties on you by the thousands but they are delayed by 3 years and you will be lucky to get a paltry sum if at all. Once you sign on the dottled line be prepared for a long list of surprises.
Shriram in talks to buy Sobha assets
In what could perhaps be the first sign of consolidation in the slowdown-hit realty sector, Shriram Properties — part of the $5.5-billion Chennai-based Shriram group of companies — is believed to be in talks with Bangalore-based residential market leader Sobha Developers.
It is understood that Shriram may be looking to buy some of Sobha’s asset portfolio — up to seven of them. These assets could be land with development rights or projects under development, a source close to the process said. The deal is likely to be worth Rs 200-300 crore. “Sobha is in discussions with us. But we have not taken any in-principle decision.
Sobha is evaluating to hive off assets/projects and merger options with Shriram,” a top Shriram group official told ET. Talks between both companies are going on for the past four weeks, another source said. ET learnt that Sun Apollo, an equity partner in some of Shriram’s properties, may help Shriram by putting in some of the money, even though this could not be confirmed.
When contacted, Shriram Properties MD M Murali denied any deal with Sobha. He, however, said the company was actively pursuing its expansion plans. Sobha’s JC Sharma, too, denied the development, although he maintained the company was pursuing various options to raise capital.
Sobha MD JC Sharma had earlier told ET that the company was looking at dilution of stake in the company at the entity level by up to 26% and was also open to divest stakes in its SPVs. Sobha, which is facing a liquidity crunch like many other realty players, is looking at a variety of options to raise up to Rs 600 crore in the coming months.
It was also looking to sell some of its land holdings in Chennai, Bangalore and Pune. Sobha holds about 400 acres in these cities.
The deal, if and when happens, will help the Rs 480-crore Shriram Properties — a pure-play fund manager and development company — scale up its size in the residential market. It is not known how Shriram will raise funds for the purchase.
The deal will also generate much-needed cash for Sobha. The Bangalore-based developer has debt of about Rs 1,850 crore on its books. Sobha also needs cash to develop its various projects. It is developing about 1,400 apartments in Bangalore and other parts of the south. Promoters hold 87% stake in Sobha Developers. Some of these land parcels in Bangalore are in Minerva Mill, Bangalore East and Thanisandra. Sobha’s total land bank assets are in the region of 3,000 acres.
The realty sector is groaning under the collective weight of heavy debt and slump in consumer demand. Many firms bought land when prices were very high hoping to sell the apartments at those rates and make decent returns. But the fall in prices has quashed those plans, putting many of them in quandary. They have to complete the building for which there are few takers. Banks are still unwilling to lend while public markets have turned unfriendly to builders. One solution is to consolidate, get rid of non-core properties and projects while focusing on the important ones which can generate returns. Shriram has completed projects covering 4.5 million sq ft in Bangalore, Chennai, Coimbatore and Kolkata, while 80 million sq ft of projects are in the pipeline at Vizag, Kolkata, Chennai, Coimbatore and Bangalore. Walton Street Capital made its first investment in India through Shriram Properties, while Starwood is the other investor at the entity level of the Chennai group.
Shriram also has a 50:50 joint venture with Sun Apollo, which has brought in Rs 600 crore for executing two special purpose vehicle projects in Chennai and Vizag.
The Sobha scrip closed 6.03% up at Rs 94.05 on BSE on Wednesday.
It is understood that Shriram may be looking to buy some of Sobha’s asset portfolio — up to seven of them. These assets could be land with development rights or projects under development, a source close to the process said. The deal is likely to be worth Rs 200-300 crore. “Sobha is in discussions with us. But we have not taken any in-principle decision.
Sobha is evaluating to hive off assets/projects and merger options with Shriram,” a top Shriram group official told ET. Talks between both companies are going on for the past four weeks, another source said. ET learnt that Sun Apollo, an equity partner in some of Shriram’s properties, may help Shriram by putting in some of the money, even though this could not be confirmed.
When contacted, Shriram Properties MD M Murali denied any deal with Sobha. He, however, said the company was actively pursuing its expansion plans. Sobha’s JC Sharma, too, denied the development, although he maintained the company was pursuing various options to raise capital.
Sobha MD JC Sharma had earlier told ET that the company was looking at dilution of stake in the company at the entity level by up to 26% and was also open to divest stakes in its SPVs. Sobha, which is facing a liquidity crunch like many other realty players, is looking at a variety of options to raise up to Rs 600 crore in the coming months.
It was also looking to sell some of its land holdings in Chennai, Bangalore and Pune. Sobha holds about 400 acres in these cities.
The deal, if and when happens, will help the Rs 480-crore Shriram Properties — a pure-play fund manager and development company — scale up its size in the residential market. It is not known how Shriram will raise funds for the purchase.
The deal will also generate much-needed cash for Sobha. The Bangalore-based developer has debt of about Rs 1,850 crore on its books. Sobha also needs cash to develop its various projects. It is developing about 1,400 apartments in Bangalore and other parts of the south. Promoters hold 87% stake in Sobha Developers. Some of these land parcels in Bangalore are in Minerva Mill, Bangalore East and Thanisandra. Sobha’s total land bank assets are in the region of 3,000 acres.
The realty sector is groaning under the collective weight of heavy debt and slump in consumer demand. Many firms bought land when prices were very high hoping to sell the apartments at those rates and make decent returns. But the fall in prices has quashed those plans, putting many of them in quandary. They have to complete the building for which there are few takers. Banks are still unwilling to lend while public markets have turned unfriendly to builders. One solution is to consolidate, get rid of non-core properties and projects while focusing on the important ones which can generate returns. Shriram has completed projects covering 4.5 million sq ft in Bangalore, Chennai, Coimbatore and Kolkata, while 80 million sq ft of projects are in the pipeline at Vizag, Kolkata, Chennai, Coimbatore and Bangalore. Walton Street Capital made its first investment in India through Shriram Properties, while Starwood is the other investor at the entity level of the Chennai group.
Shriram also has a 50:50 joint venture with Sun Apollo, which has brought in Rs 600 crore for executing two special purpose vehicle projects in Chennai and Vizag.
The Sobha scrip closed 6.03% up at Rs 94.05 on BSE on Wednesday.
Friday, April 3, 2009
Realtor Brigade cuts rate by 15% across projects
Plans to build cheaper flats for buyers with Rs. 25-30 lakh budgets, construct hospitals, residences and malls
Close on the heels of DLF Ltd slashing ticket prices of its homes by 30%, Brigade Enterprises Ltd cut rates by 10-15% in all its projects and will build small, cheaper apartments to cater to buyers with budgets of Rs25-30 lakh.
The Bangalore-based developer has lined up 12 projects, which include hospitals, residences and malls, and would start building them before the end of this year. It plans to raise Rs1,000 crore for its ventures.
“We are planning to raise the money this year through a combination route of private equity and institutional funding,” said chairman and managing director M.R. Jaishankar.
Brigade, which has around 14 million sq. ft under development in southern India, is aggressively looking at expanding its hospitality business in 2009.
On Friday, the company, in partnership with Accor hotels and resorts, launched Mercure Homestead, which is a 126-room luxury service apartment complex in north-west Bangalore. This also marked the launch of Accor’s global Mercure brand in India, with the next property lined up at the hill station of Lavasa, near Pune in Maharashtra.
“We are positive on the Indian market and are planning 50 properties here by 2012 under our various brands, such as Mercure, Novotel and others,” said Daniel Tannenbaum, Accor’s India regional director of sales and marketing. He was responding to a query on a dull hospitality sector and dipping demand in the serviced-apartments segment.
Brigade has a debt of Rs. 350 crore, but will not restructure its loans like other developers that include Unitech Ltd, Sobha Developers Ltd and Housing Development and Infrastructure Ltd.
“We didn’t commit the mistake of buying land indiscriminately and only bought enough that would be developed within five-seven years. So, if there is a good piece of land, we are still looking to buy,” said Jaishankar. The company has a land bank of about 450 acres.
Brigade’s net profit for the nine months to 31 December dipped by 17.3% to Rs67.44 crore from Rs81.55 crore in the same period a year earlier.
The company’s stock closed at Rs. 38.75, up 5.59%, on the Bombay Stock Exchange on Thursday, on a day when the Sensex rose 4.51%.
Close on the heels of DLF Ltd slashing ticket prices of its homes by 30%, Brigade Enterprises Ltd cut rates by 10-15% in all its projects and will build small, cheaper apartments to cater to buyers with budgets of Rs25-30 lakh.
The Bangalore-based developer has lined up 12 projects, which include hospitals, residences and malls, and would start building them before the end of this year. It plans to raise Rs1,000 crore for its ventures.
“We are planning to raise the money this year through a combination route of private equity and institutional funding,” said chairman and managing director M.R. Jaishankar.
Brigade, which has around 14 million sq. ft under development in southern India, is aggressively looking at expanding its hospitality business in 2009.
On Friday, the company, in partnership with Accor hotels and resorts, launched Mercure Homestead, which is a 126-room luxury service apartment complex in north-west Bangalore. This also marked the launch of Accor’s global Mercure brand in India, with the next property lined up at the hill station of Lavasa, near Pune in Maharashtra.
“We are positive on the Indian market and are planning 50 properties here by 2012 under our various brands, such as Mercure, Novotel and others,” said Daniel Tannenbaum, Accor’s India regional director of sales and marketing. He was responding to a query on a dull hospitality sector and dipping demand in the serviced-apartments segment.
Brigade has a debt of Rs. 350 crore, but will not restructure its loans like other developers that include Unitech Ltd, Sobha Developers Ltd and Housing Development and Infrastructure Ltd.
“We didn’t commit the mistake of buying land indiscriminately and only bought enough that would be developed within five-seven years. So, if there is a good piece of land, we are still looking to buy,” said Jaishankar. The company has a land bank of about 450 acres.
Brigade’s net profit for the nine months to 31 December dipped by 17.3% to Rs67.44 crore from Rs81.55 crore in the same period a year earlier.
The company’s stock closed at Rs. 38.75, up 5.59%, on the Bombay Stock Exchange on Thursday, on a day when the Sensex rose 4.51%.
Real Estate Developers On the Debt Bed - Sobha Developers Situation?
Real estate firms may be opting for loan rescheduling for some breathing space, but additional interest rate is only adding to the stress.
The real estate sector, which received a shot in the arm in the form of debt rescheduling package, is unlikely to get the full benefit as the package comes with several riders.
While rescheduling helps realty firms realign the payment tenure, it comes with an additional burden of 1-2 per cent interest, more collaterals and pledging of receivables. Bankers, taking into account the risk involved in rescheduling loans for real estate sector, raise interest rate. Confirming the move, a senior official of HDFC said, without wanting to be named. “When extending the time, banks can levy extra interest rate to compensate for the additional risk they take in restructuring accounts.”
However, additional interest rates can put severe strain on real estate companies as they had taken loans at high rates in the past. Levying extra interest would mean additional pressure on the troubled companies. T Y Prabhu, executive director of Union Bank of India says, “The idea of restructuring is to provide respite to the beleaguered companies. Increasing the interest rate only adds to the stress. Staggering of repayment is a better option.”
Until last year, builders and developers went on an overdrive to acquire land and launch projects, borrowing heavily for the purpose. However, the global slowdown has brought about a reversal of fortune for the once-booming realty sector, which is now saddled with liquidity crunch and falling property values, forcing companies to request banks to re-schedule loans.
Bangalore-based Sobha Developers, New Delhi-based Unitech and Mumbai-based HDIL have requested for rescheduling of some of their debt. These companies are not willing to comment on the rates at which they had borrowed money. However, according to a research report compiled by Credit Suisse in January, quoting NSDL data: “Sobha and Unitech borrowed at 19-30 per cent. Also, average borrowing for property companies was 200-300 basis points higher than most other sectors during the same period, indicating the higher risk attached by lenders to the sector.”
The report further added: “Sobha borrowed funds at 24-30 per cent for short periods of 1-2 months in October-November 2008. Further, it also appears that Sobha defaulted on some of the repayments during this time. Unitech borrowed at 19 per cent in November 2008.” The present rate of interest on commercial loans for real estate companies is 14-16 per cent. Banks reassess cash flows and viability of a project while restructuring and give preference to projects that are nearing completion. S Ananthakrishnan, executive director of IDBI Bank said, “As per the restructuring norms, the net present value (NPV) of principal and interest over the term of the loan cannot be diluted.” He also said that “to compensate for any such dilution, interest rate would need to be appropriately increased if the duration of repayment has to be extended to protect the NPV.”
Companies such as Sobha and Unitech are looking at easing their monthly quarterly obligations towards servicing debts.
“Real estate companies want the period of loan to be extended by converting short-term liability into long-term debt. Though it may result in higher rate of interest, a builder would be happy so long as his monthly obligation is reduced,” said Shuva Mandal, managing partner of Fox Mandal and Little, a law firm that specialises in real estate projects.
“If a developer furnishes more collaterals, then the interest rate is kept unchanged. Otherwise, additional interest burden of around 1-2 per cent is levied. We have been involved in 2-3 such instances in the last 45 days,” said Ameet Hariani, managing partner of Mumbai-based Hariani & Co, another law firm.
R Nagaraju, general manager for corporate planning and strategy at Unitech, said, “Interest rates are linked to prime lending rate (PLR).” He refused to comment specifically on additional interest burden because of loan rescheduling. Unitech had earlier revealed that the company had a debt of around Rs 8,000 crore, of which it had to pay Rs 1,100 by March 31 to various banks as opting for loan extension could give some breathing space. Besides Unitech and HDIL, another Mumbai-based real estate company is in the process of rescheduling non-convertible debentures of around Rs 1,275 crore that are due for payment starting April 2009.
S Baaskaran, chief financial officer of Sobha Developers, said, “We do not know about other players, but for us there is no additional burden. It depends upon the project completion and the revised cash flow of the company.”
The real estate sector, which received a shot in the arm in the form of debt rescheduling package, is unlikely to get the full benefit as the package comes with several riders.
While rescheduling helps realty firms realign the payment tenure, it comes with an additional burden of 1-2 per cent interest, more collaterals and pledging of receivables. Bankers, taking into account the risk involved in rescheduling loans for real estate sector, raise interest rate. Confirming the move, a senior official of HDFC said, without wanting to be named. “When extending the time, banks can levy extra interest rate to compensate for the additional risk they take in restructuring accounts.”
However, additional interest rates can put severe strain on real estate companies as they had taken loans at high rates in the past. Levying extra interest would mean additional pressure on the troubled companies. T Y Prabhu, executive director of Union Bank of India says, “The idea of restructuring is to provide respite to the beleaguered companies. Increasing the interest rate only adds to the stress. Staggering of repayment is a better option.”
Until last year, builders and developers went on an overdrive to acquire land and launch projects, borrowing heavily for the purpose. However, the global slowdown has brought about a reversal of fortune for the once-booming realty sector, which is now saddled with liquidity crunch and falling property values, forcing companies to request banks to re-schedule loans.
Bangalore-based Sobha Developers, New Delhi-based Unitech and Mumbai-based HDIL have requested for rescheduling of some of their debt. These companies are not willing to comment on the rates at which they had borrowed money. However, according to a research report compiled by Credit Suisse in January, quoting NSDL data: “Sobha and Unitech borrowed at 19-30 per cent. Also, average borrowing for property companies was 200-300 basis points higher than most other sectors during the same period, indicating the higher risk attached by lenders to the sector.”
The report further added: “Sobha borrowed funds at 24-30 per cent for short periods of 1-2 months in October-November 2008. Further, it also appears that Sobha defaulted on some of the repayments during this time. Unitech borrowed at 19 per cent in November 2008.” The present rate of interest on commercial loans for real estate companies is 14-16 per cent. Banks reassess cash flows and viability of a project while restructuring and give preference to projects that are nearing completion. S Ananthakrishnan, executive director of IDBI Bank said, “As per the restructuring norms, the net present value (NPV) of principal and interest over the term of the loan cannot be diluted.” He also said that “to compensate for any such dilution, interest rate would need to be appropriately increased if the duration of repayment has to be extended to protect the NPV.”
Companies such as Sobha and Unitech are looking at easing their monthly quarterly obligations towards servicing debts.
“Real estate companies want the period of loan to be extended by converting short-term liability into long-term debt. Though it may result in higher rate of interest, a builder would be happy so long as his monthly obligation is reduced,” said Shuva Mandal, managing partner of Fox Mandal and Little, a law firm that specialises in real estate projects.
“If a developer furnishes more collaterals, then the interest rate is kept unchanged. Otherwise, additional interest burden of around 1-2 per cent is levied. We have been involved in 2-3 such instances in the last 45 days,” said Ameet Hariani, managing partner of Mumbai-based Hariani & Co, another law firm.
R Nagaraju, general manager for corporate planning and strategy at Unitech, said, “Interest rates are linked to prime lending rate (PLR).” He refused to comment specifically on additional interest burden because of loan rescheduling. Unitech had earlier revealed that the company had a debt of around Rs 8,000 crore, of which it had to pay Rs 1,100 by March 31 to various banks as opting for loan extension could give some breathing space. Besides Unitech and HDIL, another Mumbai-based real estate company is in the process of rescheduling non-convertible debentures of around Rs 1,275 crore that are due for payment starting April 2009.
S Baaskaran, chief financial officer of Sobha Developers, said, “We do not know about other players, but for us there is no additional burden. It depends upon the project completion and the revised cash flow of the company.”
Job losses spur cancellations in luxury residential projects
The developer fraternity now faces a new crisis: buyers queuing up to cancel transactions after months of paying the booking amount
When Sobha Developers Ltd, a listed realty firm, was recently approached by a buyer who wanted to cancel an apartment purchase in Petunia, a luxury residential project in north Bangalore, out of fear that her husband could lose his job, the developer promptly transferred her booking to one of its more affordable projects.
The buyer, who had already paid Rs. 1.25 crore of the Rs. 1.65 crore for the under-construction Petunia apartment didn’t have to pay anything more.
An economic slowdown and fears of job losses are forcing realty firms to accommodate such requests, said Keshav Menon, executive director, Sobha Developers, without divulging the identity of the buyer. “The idea is not to lose a customer and try to accommodate him within what we can offer,” he said.
At Sobha, which has been grappling with dipping sales and sizable debt, at least one in 10 cancellations every month are due to reasons involving sudden unemployment and the fear of losing jobs, Menon added.
With monthly sales down to single digit at several projects and serious liquidity issues, the developer fraternity now faces a new crisis: buyers queueing up to cancel transactions after months of paying the booking amount. There is no readily available estimate for job losses across the country, but there have been reports of layoffs in sectors such as software services and automobiles.
As such instances increase, developers are beginning to ignore a forfeiture clause that typically allows a refund only after a deduction of 5% to 20% from the booking amount in case of a cancellation.
“The panic to withdraw from bookings is particularly noticeable in high-end projects where the buyer is simply scared of financial insecurity. We try to counsel and retain them but if it is a case of genuine job loss, we ask them to provide some proof and then refund,” said A.R.P. Raman, global head (marketing and sales) for Shriram Group, which has eight projects in Bangalore, Coimbatore, Chennai, Visakhapatnam and Kolkata.
Developers stress it is only in genuine cases that the deduction is held back. At Sobha, for instance, in cases where a refund is demanded without a job loss, “around 25% is deducted from the booking amount and returned”, said Menon.
Six months ago, as the economic slowdown started settling in, Sobha introduced a clause in its sale agreement that the developer will refund the booking amount only after re-selling the same apartment and after a 25% deduction.
Another luxury project, Aquilla Heights in Bangalore has also seen cancellations over the last few months with job loss being cited as a reason. The project, being developed by Tata Housing Development Co. Ltd and billed the tallest residential project in the technology hub, has 244 apartments priced between Rs. 70 lakh and Rs. 1.2 crore. But, “we are also telling buyers to hold on as there are exit options. They are allowed to sell the unit six months after allotment,” said a senior executive at Tata Housing, who asked not be identified citing company policy.
Mint reported on Tuesday that DLF Ltd, the country’s largest developer by market value, has assured around 250 buyers who want to exit a housing project in Chennai that they will be refunded this month after they demanded that the company cut prices by 25%; DLF had previously offered to do so by 10% to 18%. A DLF spokesperson told Mint that a small portion of the buyers, numbering up to 30, wanted refunds claiming job loss.
At least one developer said it was not in a position to make refunds even when the reason was genuine. “We can’t refund right away and if the booking is or an under-construction project, the deductions are 15-20%,” said Mohan Kumar, vice-president (sales and marketing) of Bangalore’s Alliance Infrastructure Pvt. Ltd.
Some can afford refunds but “how many builders can refund immediately with each one suffering a cash crunch?” asked Raminder Grover, chief executive of Homebay Residential Pvt. Ltd, a unit of Jones Lang LaSalle Meghraj, a property advisory firm. Nearly 70% cancellations are in the luxury segment where buyers are feeling jittery about paying a huge monthly installment, said Grover.
When Sobha Developers Ltd, a listed realty firm, was recently approached by a buyer who wanted to cancel an apartment purchase in Petunia, a luxury residential project in north Bangalore, out of fear that her husband could lose his job, the developer promptly transferred her booking to one of its more affordable projects.
The buyer, who had already paid Rs. 1.25 crore of the Rs. 1.65 crore for the under-construction Petunia apartment didn’t have to pay anything more.
An economic slowdown and fears of job losses are forcing realty firms to accommodate such requests, said Keshav Menon, executive director, Sobha Developers, without divulging the identity of the buyer. “The idea is not to lose a customer and try to accommodate him within what we can offer,” he said.
At Sobha, which has been grappling with dipping sales and sizable debt, at least one in 10 cancellations every month are due to reasons involving sudden unemployment and the fear of losing jobs, Menon added.
With monthly sales down to single digit at several projects and serious liquidity issues, the developer fraternity now faces a new crisis: buyers queueing up to cancel transactions after months of paying the booking amount. There is no readily available estimate for job losses across the country, but there have been reports of layoffs in sectors such as software services and automobiles.
As such instances increase, developers are beginning to ignore a forfeiture clause that typically allows a refund only after a deduction of 5% to 20% from the booking amount in case of a cancellation.
“The panic to withdraw from bookings is particularly noticeable in high-end projects where the buyer is simply scared of financial insecurity. We try to counsel and retain them but if it is a case of genuine job loss, we ask them to provide some proof and then refund,” said A.R.P. Raman, global head (marketing and sales) for Shriram Group, which has eight projects in Bangalore, Coimbatore, Chennai, Visakhapatnam and Kolkata.
Developers stress it is only in genuine cases that the deduction is held back. At Sobha, for instance, in cases where a refund is demanded without a job loss, “around 25% is deducted from the booking amount and returned”, said Menon.
Six months ago, as the economic slowdown started settling in, Sobha introduced a clause in its sale agreement that the developer will refund the booking amount only after re-selling the same apartment and after a 25% deduction.
Another luxury project, Aquilla Heights in Bangalore has also seen cancellations over the last few months with job loss being cited as a reason. The project, being developed by Tata Housing Development Co. Ltd and billed the tallest residential project in the technology hub, has 244 apartments priced between Rs. 70 lakh and Rs. 1.2 crore. But, “we are also telling buyers to hold on as there are exit options. They are allowed to sell the unit six months after allotment,” said a senior executive at Tata Housing, who asked not be identified citing company policy.
Mint reported on Tuesday that DLF Ltd, the country’s largest developer by market value, has assured around 250 buyers who want to exit a housing project in Chennai that they will be refunded this month after they demanded that the company cut prices by 25%; DLF had previously offered to do so by 10% to 18%. A DLF spokesperson told Mint that a small portion of the buyers, numbering up to 30, wanted refunds claiming job loss.
At least one developer said it was not in a position to make refunds even when the reason was genuine. “We can’t refund right away and if the booking is or an under-construction project, the deductions are 15-20%,” said Mohan Kumar, vice-president (sales and marketing) of Bangalore’s Alliance Infrastructure Pvt. Ltd.
Some can afford refunds but “how many builders can refund immediately with each one suffering a cash crunch?” asked Raminder Grover, chief executive of Homebay Residential Pvt. Ltd, a unit of Jones Lang LaSalle Meghraj, a property advisory firm. Nearly 70% cancellations are in the luxury segment where buyers are feeling jittery about paying a huge monthly installment, said Grover.
Sobha Developers to declare FY 2009 results by Jun 30, 2009
Sobha Developers Ltd has announced that the Company will publish the Audited Financial Results for the entire financial year 2008-09 within three months from the end of the financial year ended March 31, 2009.
In view of the above, the Un-audited Financial Results of the last quarter ended March 31, 2008 will not be published.
The stock closed the day at Rs.81.55, up by Rs.2.10 or 2.64%. The stock hit an intraday high of Rs.82.05 and low of Rs.79.
The total traded quantity was 27114 compared to 2 week average of 55152.
In view of the above, the Un-audited Financial Results of the last quarter ended March 31, 2008 will not be published.
The stock closed the day at Rs.81.55, up by Rs.2.10 or 2.64%. The stock hit an intraday high of Rs.82.05 and low of Rs.79.
The total traded quantity was 27114 compared to 2 week average of 55152.
Thursday, March 26, 2009
Sobha Developers seeks debt recast from Banks, FIs
The report stated that the company is open to “even 49% participation from private equity players at a special purpose vehicle (SPV) level.
Sobha Developers is reportedly in talks with banks, financial institutions and private funds to restructure over Rs10bn of its total debt of about Rs18bn, according to a report in a business daily. "We feel that banks, financial institutions and funds have agreed to support us. A clearer picture will emerge in the next 2-3 weeks," said J.C. Sharma, Managing Director, Sobha Developers.
Sharma added that the company had no overdue in principal payment, nor were there any interest delays. "We are confident that we could bring down the debt-equity ratio to less than 1:1," he said. The current debt equity ratio is 1.56:1. The company is open to even 49% participation from private equity players at a special purpose vehicle (SPV) level.
Sobha Developers is reportedly in talks with banks, financial institutions and private funds to restructure over Rs10bn of its total debt of about Rs18bn, according to a report in a business daily. "We feel that banks, financial institutions and funds have agreed to support us. A clearer picture will emerge in the next 2-3 weeks," said J.C. Sharma, Managing Director, Sobha Developers.
Sharma added that the company had no overdue in principal payment, nor were there any interest delays. "We are confident that we could bring down the debt-equity ratio to less than 1:1," he said. The current debt equity ratio is 1.56:1. The company is open to even 49% participation from private equity players at a special purpose vehicle (SPV) level.
Wednesday, March 25, 2009
Revenue down 50%, Sobha Developers cuts workforce
The firms’ managing director J.C. Sharma said unlike the real estate sector, the income from our contractual business has been steady & we don’t really have to look out for customers
Sobha Developers Ltd, a leading realty firm in south India, has witnessed its monthly revenue reduce by more than half, from Rs. 120 crore to Rs. 50 crore. With sales down, Sobha has been forced to cut its 3,000-strong workforce by about 30%, to 2,170.
However, with revenue from the real estate sector going down, the company's other source of income, its contractual business, has been the saving grace. “Unlike the real estate sector, the income from our contractual business has been steady and we don’t really have to look out for customers,” said J.C. Sharma, managing director of the Bangalore-based company, which is expecting a Rs. 400 crore turnover from the contractual business by 2010 and has completed over 120 contractual projects for various corporate customers such as Infosys Technologies Ltd, Hewlett Packard and Dell Inc.
Sobha’s net profit fell by 88% to Rs. 7.5 crore and revenue by 49% to Rs. 181 crore in the December quarter against the same period a year ago. The developer is also in the last leg of restructuring its debt of Rs. 1900 crore. “We are restructuring over Rs. 1,000 crore and are in the final stage of getting approvals from various financial institutions,” said Sharma.
The company is also looking at various funding options ranging from equity dilution, private equity funding at project level as well as land sales. Mint had earlier reported that the developer would try to sell parts of its 3,000-acre land bank—the process seems to have started. It has managed to sell land worth Rs100 crore over the last few months.
Sales have not picked up even after developers such as Sobha are trying out various out-of-the-box marketing techniques such as its recent Home Mela. The two-day property exhibition that showcased 18 different properties of the company concluded with only six apartments being sold.
Sobha, which till now, focused on high-end and luxury apartments and villas is finally joining the affordable housing bandwagon. It is launching its first budget housing project in the next three-four months in Bangalore, though officials didn’t divulge pricing details.
“Contractual work in real estate has also been hit as most corporates have stalled expansion plans. Which is why we find lot of contractual business coming in for developers from industrial or education sectors. Like Sobha, we will find more developers going in for debt restructuring to pull down high interest rates on short term loans and converting them to long-term loans,” said Abhinav Bhandari, research analyst (construction and infrastructure) with Pioneer Invest Corp Ltd.
Sobha Developers Ltd, a leading realty firm in south India, has witnessed its monthly revenue reduce by more than half, from Rs. 120 crore to Rs. 50 crore. With sales down, Sobha has been forced to cut its 3,000-strong workforce by about 30%, to 2,170.
However, with revenue from the real estate sector going down, the company's other source of income, its contractual business, has been the saving grace. “Unlike the real estate sector, the income from our contractual business has been steady and we don’t really have to look out for customers,” said J.C. Sharma, managing director of the Bangalore-based company, which is expecting a Rs. 400 crore turnover from the contractual business by 2010 and has completed over 120 contractual projects for various corporate customers such as Infosys Technologies Ltd, Hewlett Packard and Dell Inc.
Sobha’s net profit fell by 88% to Rs. 7.5 crore and revenue by 49% to Rs. 181 crore in the December quarter against the same period a year ago. The developer is also in the last leg of restructuring its debt of Rs. 1900 crore. “We are restructuring over Rs. 1,000 crore and are in the final stage of getting approvals from various financial institutions,” said Sharma.
The company is also looking at various funding options ranging from equity dilution, private equity funding at project level as well as land sales. Mint had earlier reported that the developer would try to sell parts of its 3,000-acre land bank—the process seems to have started. It has managed to sell land worth Rs100 crore over the last few months.
Sales have not picked up even after developers such as Sobha are trying out various out-of-the-box marketing techniques such as its recent Home Mela. The two-day property exhibition that showcased 18 different properties of the company concluded with only six apartments being sold.
Sobha, which till now, focused on high-end and luxury apartments and villas is finally joining the affordable housing bandwagon. It is launching its first budget housing project in the next three-four months in Bangalore, though officials didn’t divulge pricing details.
“Contractual work in real estate has also been hit as most corporates have stalled expansion plans. Which is why we find lot of contractual business coming in for developers from industrial or education sectors. Like Sobha, we will find more developers going in for debt restructuring to pull down high interest rates on short term loans and converting them to long-term loans,” said Abhinav Bhandari, research analyst (construction and infrastructure) with Pioneer Invest Corp Ltd.
Sunday, March 22, 2009
New Pricing By Sobha Developers
Hello All,
I have received a few emails from people complaining about the new pricing strategy adopted by Sobha Developers. In the press there is a lot of news about price reduction and it seems that Sobha Marketing team is also talking a lot about it. Effectively they seem to have reduced the price for their property on a per sq ft basis, but if you happen to get a chance to look into the details, you would know what it really is. They have considerably increased the prices elsewhere, like:
Share of Land - Cost of that seems to have been increased by nearly 100% or more
Car parking - Increase of nearly 50%
Club House - Increase of nearly 50%. In some cases even 100%.
Other charges like Electricity and Water Supply have also increased by 25%.
I am not sure if the above price increase is in tandem with the actual cost increase. However i would suggest new buyers to check all these well in advance. They seem to have reduced prices in some place and increased prices in some other places, so net affect balances out.
So bottom line is - dont get carried away by this "so called" price reduction. It might be not be true as you might be thinking. Get down and see the details carefully and make your judgement.
I have received a few emails from people complaining about the new pricing strategy adopted by Sobha Developers. In the press there is a lot of news about price reduction and it seems that Sobha Marketing team is also talking a lot about it. Effectively they seem to have reduced the price for their property on a per sq ft basis, but if you happen to get a chance to look into the details, you would know what it really is. They have considerably increased the prices elsewhere, like:
Share of Land - Cost of that seems to have been increased by nearly 100% or more
Car parking - Increase of nearly 50%
Club House - Increase of nearly 50%. In some cases even 100%.
Other charges like Electricity and Water Supply have also increased by 25%.
I am not sure if the above price increase is in tandem with the actual cost increase. However i would suggest new buyers to check all these well in advance. They seem to have reduced prices in some place and increased prices in some other places, so net affect balances out.
So bottom line is - dont get carried away by this "so called" price reduction. It might be not be true as you might be thinking. Get down and see the details carefully and make your judgement.
Friday, March 20, 2009
Interview with DNA of J C Sharma, Managing Director - Sobha Developers Ltd
Reproduced from - http://www.dnaindia.com/report.asp?newsid=1241040
The slowdown in the real estate sector has created a buyers' market. With prices getting more realistic, this is the best time to go shopping for a property, says JC Sharma, managing director of Sobha Developers.
In a chat with DNA Sharma spoke about the industry's prospects, the company's foray into affordable housing and its plans to put some land parcels on sale. Excerpts:
When will the realty sector hit the road to recovery?
I feel the worst is behind us. The market is highly under-penetrated and still favours customers. Developers who reduced rates have seen good sales.There won't be any further erosion in prices. We are also focusing on below-the-line marketing and promotion.
Do you expect property prices to nosedive further?
Going by the current land and construction costs, we have reached a saturation point when it comes to reductions. There can't be further cuts by any measure. The prices have stabilised and the interest rates are back to 2005-2006 levels. Demand will increase with the rise in consumers' confidence levels.
What is Sobha's current inventory?
We have 23 projects in Bangalore, Pune, Coimbatore and Trichur, which will be completed by end of 2010-2011.
Would you raise money to fund your existing projects?
We have already invested Rs 1,000 crore in existing projects.We have credit lines available from banks and customer deposits, which is helping us. I won't say that we are in a comfortable position now, but we are definitely much more relaxed as compared to what we were 3-4 months back. We are looking to raise money for under-funded or non-funded projects and not for land acquisitions. However, I won't be able to tell you how much money will be raised. We are also in talks with PEs and VCs for funding current and future projects.
Would you complete your projetcs on schedule?
There have been delays in some of the projects that are now on the verge of completion. Projects which are 6 months to a year-old will be completed on time.
Do you plan to sell your land bank?
We have 3,000 acres of land and yes, we are looking to sell part of the land parcels. These measures are to see us through the difficult times and support our business, so that the perception of market and customer comfort get a boost.
Are you looking to restructure debt?
We have requested our banks and financial institutions to look at Sobha's revised cash flow. In principle, we are getting a positive response and the process should be completed by mid-April.
How do you plan to hold on to your niche in the market?
For us, both sales and margins are important. Slowdown made us realise we should not limit our focus to one segment. It taught us a positive lesson and will help us expand our market share.We are looking at a couple of new launches in Bangalore in the residential space. We are de-focusing (lowering focus) on commercial projects and would like to wait for the market to pick up. We are waiting for our core business to pick up -- residential and contractual properties. We plan to launch our affordable housing project in Bangalore by 2010 followed by Coimbatore.
The slowdown in the real estate sector has created a buyers' market. With prices getting more realistic, this is the best time to go shopping for a property, says JC Sharma, managing director of Sobha Developers.
In a chat with DNA Sharma spoke about the industry's prospects, the company's foray into affordable housing and its plans to put some land parcels on sale. Excerpts:
When will the realty sector hit the road to recovery?
I feel the worst is behind us. The market is highly under-penetrated and still favours customers. Developers who reduced rates have seen good sales.There won't be any further erosion in prices. We are also focusing on below-the-line marketing and promotion.
Do you expect property prices to nosedive further?
Going by the current land and construction costs, we have reached a saturation point when it comes to reductions. There can't be further cuts by any measure. The prices have stabilised and the interest rates are back to 2005-2006 levels. Demand will increase with the rise in consumers' confidence levels.
What is Sobha's current inventory?
We have 23 projects in Bangalore, Pune, Coimbatore and Trichur, which will be completed by end of 2010-2011.
Would you raise money to fund your existing projects?
We have already invested Rs 1,000 crore in existing projects.We have credit lines available from banks and customer deposits, which is helping us. I won't say that we are in a comfortable position now, but we are definitely much more relaxed as compared to what we were 3-4 months back. We are looking to raise money for under-funded or non-funded projects and not for land acquisitions. However, I won't be able to tell you how much money will be raised. We are also in talks with PEs and VCs for funding current and future projects.
Would you complete your projetcs on schedule?
There have been delays in some of the projects that are now on the verge of completion. Projects which are 6 months to a year-old will be completed on time.
Do you plan to sell your land bank?
We have 3,000 acres of land and yes, we are looking to sell part of the land parcels. These measures are to see us through the difficult times and support our business, so that the perception of market and customer comfort get a boost.
Are you looking to restructure debt?
We have requested our banks and financial institutions to look at Sobha's revised cash flow. In principle, we are getting a positive response and the process should be completed by mid-April.
How do you plan to hold on to your niche in the market?
For us, both sales and margins are important. Slowdown made us realise we should not limit our focus to one segment. It taught us a positive lesson and will help us expand our market share.We are looking at a couple of new launches in Bangalore in the residential space. We are de-focusing (lowering focus) on commercial projects and would like to wait for the market to pick up. We are waiting for our core business to pick up -- residential and contractual properties. We plan to launch our affordable housing project in Bangalore by 2010 followed by Coimbatore.
Saturday, March 7, 2009
Sobha promoters may sell 26% to raise Rs 600 crore
Reproduced from: http://economictimes.indiatimes.com/Stocks-in-News/Sobha-promoters-may-sell-26-to-raise-Rs-600-crore/articleshow/4230932.cms
Promoters of Sobha Developers, a Bangalore-based realty major, are hoping to raise Rs 600 crore this year through sale of up to 26% stake or by unlocking value from the company’s land bank. The company has already identified land parcels, amounting to 400 acres, across Bangalore, Chennai, Kerala, Hyderabad and Pune for divestment. Some of these land parcels in Bangalore are in Minerva Mill, Bangalore East and Thanisandra. Sobha’s total land bank assets are in the region of 3,000 acres.
“We are open to all options, including raising equity at the entity level,” Sobha managing director JC Sharma told ET. Sobha has been talking to a host of big private equity funds for stake dilution. The company may be looking at deploying these funds in its ongoing projects. Sobha, a residential segment leader in Bangalore, has nearly 1,400 apartment units under development, which are scheduled to be ready in two to three years.
Also, in a deviation from its model of selling constructed apartments and villas, Sobha has entered the business of selling plots of land. It is looking at selling 15 acres as large-sized plotted development in Bangalore’s Thanisandra area. These plots carry an approximate tag of Rs 3,000 per sq ft.
Realty trackers say, companies may look at monetising their land banks by selling them off as plots. “It is difficult to offload a large parcel of land in the current scenario. So, carving such a parcel into several plots is more doable. Besides, companies do not have to incur construction costs and a long gestation period,” a consultant said. A year ago, valuations of realty companies soared based on their land bank assets. Today, with falling realty prices and negative buying sentiments, many realtors are looking at unconventional options to meet liquidity requirements.
Promoters of Sobha Developers, a Bangalore-based realty major, are hoping to raise Rs 600 crore this year through sale of up to 26% stake or by unlocking value from the company’s land bank. The company has already identified land parcels, amounting to 400 acres, across Bangalore, Chennai, Kerala, Hyderabad and Pune for divestment. Some of these land parcels in Bangalore are in Minerva Mill, Bangalore East and Thanisandra. Sobha’s total land bank assets are in the region of 3,000 acres.
“We are open to all options, including raising equity at the entity level,” Sobha managing director JC Sharma told ET. Sobha has been talking to a host of big private equity funds for stake dilution. The company may be looking at deploying these funds in its ongoing projects. Sobha, a residential segment leader in Bangalore, has nearly 1,400 apartment units under development, which are scheduled to be ready in two to three years.
Also, in a deviation from its model of selling constructed apartments and villas, Sobha has entered the business of selling plots of land. It is looking at selling 15 acres as large-sized plotted development in Bangalore’s Thanisandra area. These plots carry an approximate tag of Rs 3,000 per sq ft.
Realty trackers say, companies may look at monetising their land banks by selling them off as plots. “It is difficult to offload a large parcel of land in the current scenario. So, carving such a parcel into several plots is more doable. Besides, companies do not have to incur construction costs and a long gestation period,” a consultant said. A year ago, valuations of realty companies soared based on their land bank assets. Today, with falling realty prices and negative buying sentiments, many realtors are looking at unconventional options to meet liquidity requirements.
Sobha Developers - Not Giving Refund of booking amount
Fellow folk in woe!
I booked an apartment with Sobha Developers in Aug 08 paying Rs 3 lacs as the booking advance. Since I was having problems getting a bank loan and my financial situation was not permitting me to go ahead with the purchase I canceled the booking in Sept’08 and was promised the refund in a fortnight. After repeated calls/emails and a personal visit to meet the management in their Wilson Garden office, I have been informed in a mail last week that they will refund the amount only when they sell the apartment to another customer. This reportedly is their policy which is not mentioned in any document that I have in my possession.
I need some advise from any of you on how to get my money back and also to alert fellow buyers on this scam perpetrated by Sobha wherein they get interest free sums and sit on it leaving their customers in a lurch. This is from a company that unhesitatingly levies 24% interest for every day’s delay in payment of their dues.
SS
I booked an apartment with Sobha Developers in Aug 08 paying Rs 3 lacs as the booking advance. Since I was having problems getting a bank loan and my financial situation was not permitting me to go ahead with the purchase I canceled the booking in Sept’08 and was promised the refund in a fortnight. After repeated calls/emails and a personal visit to meet the management in their Wilson Garden office, I have been informed in a mail last week that they will refund the amount only when they sell the apartment to another customer. This reportedly is their policy which is not mentioned in any document that I have in my possession.
I need some advise from any of you on how to get my money back and also to alert fellow buyers on this scam perpetrated by Sobha wherein they get interest free sums and sit on it leaving their customers in a lurch. This is from a company that unhesitatingly levies 24% interest for every day’s delay in payment of their dues.
SS
Friday, March 6, 2009
Sobha Developers to begin work of Commercial space
Sobha Developers will launch the work of the commercial space in the Sobha City at Puzekkal in Thrissur shortly.
Talking to reporters here on Wednesday, Sobha Developers regional director P Ramakrishnan said that the 3.5 lakh sqft. commercial part of the integrated township under development by Sobha will comprise a world class business hotel, entertainment and amusement centre, air conditioned mall with food court, restaurants, four-screen multiplex, gaming arcade and ayurvedic spa.
The township encircling a 6.5-acre man-made lake will have 1.8 million sqft. for the residential space consisting of 65 premium villas and 648 apartments. The company has registered sale of 34 per cent of the residential space so far.
Talking to reporters here on Wednesday, Sobha Developers regional director P Ramakrishnan said that the 3.5 lakh sqft. commercial part of the integrated township under development by Sobha will comprise a world class business hotel, entertainment and amusement centre, air conditioned mall with food court, restaurants, four-screen multiplex, gaming arcade and ayurvedic spa.
The township encircling a 6.5-acre man-made lake will have 1.8 million sqft. for the residential space consisting of 65 premium villas and 648 apartments. The company has registered sale of 34 per cent of the residential space so far.
Thursday, March 5, 2009
Fitch withdraws Sobha Developers' rating
Fitch Ratings has today withdrawn the 'F2+(ind)' rating assigned to India-based Sobha Developers Limited's INR1,000m Short-term debt, as there is no outstanding instrument under the ratings. The company has confirmed that the instrument was fully paid off in June 2008. Fitch will no longer provide analytical coverage on the issuer.
Cash crunch cripples Sobha Developers' projects - unable to pay suppliers - offers them apartments instead
Bangalore-based real estate major Sobha Developers may be running out of elbow room, when it comes to managing its cash flow. Recent reports that the company was looking to sell a 26% stake to raise cash, may be just the tip of the iceberg. CNBC-TV18’s Sunanda Jayaseelan delvees deeper.
Sobha Developers was planning to build a 5-star hotel, but the project that was announced two years ago has been put on hold and the land is now being used as a venue for a Home Mela, marketing apartments developed by the builder. The company has a 99 year lease on this land, and CNBC-TV18 has learnt that it is talking to several players to sell this lease.
When contacted specifically on this latest development, the management simply said it has now decided not to go ahead with the hotel project, and refused to explain why. But sources said that cash flow problems may be forcing the company to rethink its aggressive expansion plans, and stick to its core business.
CNBC-TV18 has also learnt that Sobha Developers is now asking its suppliers to accept apartments instead of cash. A cement supplier who meets close to 70% of Sobha's cement demands says the company owes him close to Rs 90 lakh for supplies over the last 3 months.
He said the company has asked him to accept apartments instead and he refused. A steel supplier, who meets around 35% of the developer's steel needs, says he's in the same boat.
When contacted, the company said, “There is no stated policy as to offer apartments to vendors. In the past also suppliers have taken apartments. "
But sources believe that such apartments are being offered at huge discounts. But most suppliers are reluctant to accept these terms, and say they would rather wait till the company's cash flow situation improves.
Sobha Developers was planning to build a 5-star hotel, but the project that was announced two years ago has been put on hold and the land is now being used as a venue for a Home Mela, marketing apartments developed by the builder. The company has a 99 year lease on this land, and CNBC-TV18 has learnt that it is talking to several players to sell this lease.
When contacted specifically on this latest development, the management simply said it has now decided not to go ahead with the hotel project, and refused to explain why. But sources said that cash flow problems may be forcing the company to rethink its aggressive expansion plans, and stick to its core business.
CNBC-TV18 has also learnt that Sobha Developers is now asking its suppliers to accept apartments instead of cash. A cement supplier who meets close to 70% of Sobha's cement demands says the company owes him close to Rs 90 lakh for supplies over the last 3 months.
He said the company has asked him to accept apartments instead and he refused. A steel supplier, who meets around 35% of the developer's steel needs, says he's in the same boat.
When contacted, the company said, “There is no stated policy as to offer apartments to vendors. In the past also suppliers have taken apartments. "
But sources believe that such apartments are being offered at huge discounts. But most suppliers are reluctant to accept these terms, and say they would rather wait till the company's cash flow situation improves.
Wednesday, March 4, 2009
Sobha Developers - Sobha Hillview: Arbitrary Changes in Maintenance Charges
Sobha has now sent letters to all the property owners in their Hill View project that as against the agreed provision of payment of Rs.2 lacs as deposit for maintenance, they have now proposed Rs.36 per sq.ft. per year as maintenance charge and further Rs.38 per sq.ft. as sinking fund.
This is completely outside the scope of the agreement. All the flat owners must immediately write back to sobha resisting any such move.
Sobha hill view projects are delayed by 12 months. Pls make sure they pay you the rent in terms of the agreement.
This is completely outside the scope of the agreement. All the flat owners must immediately write back to sobha resisting any such move.
Sobha hill view projects are delayed by 12 months. Pls make sure they pay you the rent in terms of the agreement.
Friday, February 27, 2009
An NRI Customer - Sobha has never lived up to my expectations
Hi All,
I am one of those Booked at Sobha Suncrest for a 3 bed room flat. First we have been promised March 2009, now they are sending a mail that for interiors in June 2009, and possession in October 2009, and then later in December 2009 for a livable condition. Sobha is not talking about any compensation for their delay. They had their share from us collecting the Quarterly installments, charging heavy fines as interest even for one day late in payment, and charging heavily on Outstation cheques.(promised no charges for outstation cheques while booking )
Sobha has never lived up to their expectations. All dreams about the Sobha Suncrest is shattered.
Based on their promises as NRI we have had plans of relocating ourselves in April 2009 and it is frustrating dealing with them.
I am one of those Booked at Sobha Suncrest for a 3 bed room flat. First we have been promised March 2009, now they are sending a mail that for interiors in June 2009, and possession in October 2009, and then later in December 2009 for a livable condition. Sobha is not talking about any compensation for their delay. They had their share from us collecting the Quarterly installments, charging heavy fines as interest even for one day late in payment, and charging heavily on Outstation cheques.(promised no charges for outstation cheques while booking )
Sobha has never lived up to their expectations. All dreams about the Sobha Suncrest is shattered.
Based on their promises as NRI we have had plans of relocating ourselves in April 2009 and it is frustrating dealing with them.
Sunday, February 22, 2009
Sobha Developers - Sobha Hillview: Delay in Delivery
Hello all,
By now, you all must have got the mail from Col. Narula regarding further delay in handing over Suncrest flats. My assessment is that this delay will further extend as much of the work has come to a stand still. The common facilities like the club house, parking, STP etc., are not progressing at all. Unless these are completed, Sobha will not register and hand-over the flats. And on top of this, there is no mention of any compensation from them for this delay.
Unless we ALL come together to pressurize Sobha to act and finish the project soonest, things won't move. By all, I mean the entire Hillview project's flat owners. We share all the common facilities with Sunbeam and Sunscape. Plus there is strength in numbers.
I am willing to create an online petition for this purpose. We also need to evaluate what our options are - consumer court, arbitration, bad publicity in various forums etc. If any of you know or is a legal expert, please let me know.
Unless we move fast and decisively, I see no light at the end of this tunnel.
Regards,
Natarajan
By now, you all must have got the mail from Col. Narula regarding further delay in handing over Suncrest flats. My assessment is that this delay will further extend as much of the work has come to a stand still. The common facilities like the club house, parking, STP etc., are not progressing at all. Unless these are completed, Sobha will not register and hand-over the flats. And on top of this, there is no mention of any compensation from them for this delay.
Unless we ALL come together to pressurize Sobha to act and finish the project soonest, things won't move. By all, I mean the entire Hillview project's flat owners. We share all the common facilities with Sunbeam and Sunscape. Plus there is strength in numbers.
I am willing to create an online petition for this purpose. We also need to evaluate what our options are - consumer court, arbitration, bad publicity in various forums etc. If any of you know or is a legal expert, please let me know.
Unless we move fast and decisively, I see no light at the end of this tunnel.
Regards,
Natarajan
Friday, February 20, 2009
Sobha Developers still in talks for rescheduling debt
The company has seen its net profit fall by 88% to Rs7.5 crore and revenue by 49% to Rs181 crore in the December quarter compared with a year ago.
Bangalore: In December 2006, P.N.C. Menon, chairman of Sobha Developers Ltd, was so happy after his company raised Rs570 crore through an initial public offering that he donated 70kg of gold to Guruvayur temple in Kerala.
A little over two years later, the developer is requesting lenders to reschedule Rs1,800 crore in debt that was due on 31 December.
“We are still in the process of negotiation to reschedule the dates for payment, which is basically trying to turn our short-term loans into long-term loans,” managing director J.C. Sharma told Mint on Thursday. The company has seen its net profit fall by 88% to Rs7.5 crore and revenue by 49% to Rs181 crore in the December quarter compared with a year ago.
To be sure, the property developer in southern India is not alone in its plight. India’s real estate firms are reeling under a fund crunch and falling property values. Their market value has also been declining, reflected in the Bombay Stock Exchange’s realty index shedding 85.25% in 12 months when its benchmark Sensex index fell 49.97%.
New Delhi-based Unitech Ltd announced this month that it has rescheduled at least 75% of its debt of Rs25 billion due by March, the Reuters news agency reported.
The sharp decline in property markets has led DLF Ltd, the country’s largest real estate developer by market value, to plan selling assets and reorganizing debt in the coming quarters, as reported in Mint on 2 February.
Sobha Developers is now trying various ways to push sales, earn cash and repay some high-interest debts. After failing to sell even after announcing a blanket 8% discount in November on all its properties, it is now trying out a new way to gather people to showcase various properties lying unsold for months.
Through a two-day seminar-cum-exhibition this weekend, a first of its kind for the developer, Sobha Home Mela will display 18 of its residential properties in different Bangalore neighbourhoods. For the first time, it will sell plots in north Bangalore. The exhibition is scheduled to be held on a 1.5-acre plot on Church Street in Bangalore’s central business district that the company has been trying to sell.
“The seminars and discussions are primarily meant to brief buyers about the current slowdown and about the various benefits attached to home-buying in the present situation,” Sharma said. “Properties on display range from below Rs2,000 per sq. ft to above Rs6,000 per sq. ft.”
In a report after Sobha’s December quarter results, Mumbai-based brokerage Angel Broking Ltd said the developer did not have any project launches between October and December last year as its net sales slumped.
Sobha’s maiden venture in northern India in partnership with QVC Realty, a Rs2,000 crore integrated township in Gurgaon near Delhi, has also been indefinitely delayed. It has also stalled its Mysore residential venture.
According to a 30 January report by Centrum Broking Pvt. Ltd, the company went on an overdrive to aggressively acquire land, mostly in Bangalore, after its public stock offering, borrowing heavily for the purpose.
Shobha Developers’ stock has plunged 90.76% from Rs875—its 52-week high on 29 February last year—to Rs80.80 on Thursday.
Bangalore: In December 2006, P.N.C. Menon, chairman of Sobha Developers Ltd, was so happy after his company raised Rs570 crore through an initial public offering that he donated 70kg of gold to Guruvayur temple in Kerala.
A little over two years later, the developer is requesting lenders to reschedule Rs1,800 crore in debt that was due on 31 December.
“We are still in the process of negotiation to reschedule the dates for payment, which is basically trying to turn our short-term loans into long-term loans,” managing director J.C. Sharma told Mint on Thursday. The company has seen its net profit fall by 88% to Rs7.5 crore and revenue by 49% to Rs181 crore in the December quarter compared with a year ago.
To be sure, the property developer in southern India is not alone in its plight. India’s real estate firms are reeling under a fund crunch and falling property values. Their market value has also been declining, reflected in the Bombay Stock Exchange’s realty index shedding 85.25% in 12 months when its benchmark Sensex index fell 49.97%.
New Delhi-based Unitech Ltd announced this month that it has rescheduled at least 75% of its debt of Rs25 billion due by March, the Reuters news agency reported.
The sharp decline in property markets has led DLF Ltd, the country’s largest real estate developer by market value, to plan selling assets and reorganizing debt in the coming quarters, as reported in Mint on 2 February.
Sobha Developers is now trying various ways to push sales, earn cash and repay some high-interest debts. After failing to sell even after announcing a blanket 8% discount in November on all its properties, it is now trying out a new way to gather people to showcase various properties lying unsold for months.
Through a two-day seminar-cum-exhibition this weekend, a first of its kind for the developer, Sobha Home Mela will display 18 of its residential properties in different Bangalore neighbourhoods. For the first time, it will sell plots in north Bangalore. The exhibition is scheduled to be held on a 1.5-acre plot on Church Street in Bangalore’s central business district that the company has been trying to sell.
“The seminars and discussions are primarily meant to brief buyers about the current slowdown and about the various benefits attached to home-buying in the present situation,” Sharma said. “Properties on display range from below Rs2,000 per sq. ft to above Rs6,000 per sq. ft.”
In a report after Sobha’s December quarter results, Mumbai-based brokerage Angel Broking Ltd said the developer did not have any project launches between October and December last year as its net sales slumped.
Sobha’s maiden venture in northern India in partnership with QVC Realty, a Rs2,000 crore integrated township in Gurgaon near Delhi, has also been indefinitely delayed. It has also stalled its Mysore residential venture.
According to a 30 January report by Centrum Broking Pvt. Ltd, the company went on an overdrive to aggressively acquire land, mostly in Bangalore, after its public stock offering, borrowing heavily for the purpose.
Shobha Developers’ stock has plunged 90.76% from Rs875—its 52-week high on 29 February last year—to Rs80.80 on Thursday.
Saturday, February 14, 2009
Sobha Developers Ltd - Sobha Moonstone Bad experience
I have paid advance in 2006 for Sobha Moonstone with a promise from builder that permissions would come in 2 to 3 months. At last permission has come in the month of Feb 2008. At the time of sale agreement down payment of 25% is made. Even after one year construction has not started. There is no communication from the builder. Whenever you reach CRM they say "Construction will start very soon". Huge amount of Pre EMI money is lost in this game. Construction is delayed by at least 2 years as of today.
Risks with this builder:
1) Construction agreement is one sided. One particular clause which says "If you modify the apartment builder is not liable for any penality charges for delay". Technically the project can be delayed for ever but till if you changed your flooring from Vitrified tiles to granite Sobha is never liable for any payments.
2) Lack of communication: Once booking amount is paid they will never contact you again. You are at their mercy.
3) Escalation Mechanism: They don't understand nor respect any escalations.
4) Penalty clauses: On cancellation of either parties fault you will lose 25% during booking time and 5% on total construction cost of the apartment (Not on the money you paid so far, total construction cost)
5) For any reason if they are unable to build only option is to move to some other apartment, you will never get back money. You can join http://groups.google.com/group/sobha-moonstone google groups.
Risks with this builder:
1) Construction agreement is one sided. One particular clause which says "If you modify the apartment builder is not liable for any penality charges for delay". Technically the project can be delayed for ever but till if you changed your flooring from Vitrified tiles to granite Sobha is never liable for any payments.
2) Lack of communication: Once booking amount is paid they will never contact you again. You are at their mercy.
3) Escalation Mechanism: They don't understand nor respect any escalations.
4) Penalty clauses: On cancellation of either parties fault you will lose 25% during booking time and 5% on total construction cost of the apartment (Not on the money you paid so far, total construction cost)
5) For any reason if they are unable to build only option is to move to some other apartment, you will never get back money. You can join http://groups.google.com/group/sobha-moonstone google groups.
Wednesday, January 28, 2009
Sobha Developers - Highly over-rated builder
I fully agree with all the comments made in other reviews. In today’s times of economic turmoil, It is better to go for a readily available apartment than to wait for eternity to get one completed.
However if you choose to go for Sobha and that too one being still completed, then these are the things that you need to be aware of -
- Sobha will make sure that all the terms and conditions are in their favor.
- Any modifications that you ask Sobha to execute, they will botch these up big time. However, they will charge you a bomb for these modifications
- Payment is linked to completed floors. Hence to get money as fast as possible, they just keep on raising floors without completing the apartments on the floor. Once the entire payment is made, they take their sweet time to complete the project
- Their Service team comprises immature folks who do not know how to interact with customers. The turnover of these folks and Sales guys is very high. So you don’t know whom to talk to if anything goes wrong - Believe me a lot of financial stuff goes wrong and no coincidence that this is always in Sobha’s favor
- Sobha is well known for delays in handing over projects. Average is more than a year!
- They will not leave any stone unturned in extracting as much money as possible through heads like VAT, Service tax, BWSSB, KEB and Registration. They do not produce any receipts as proofs of payments made. Nor will they show any proofs when they decide to hike these charges arbitrarily
- The top management is completely unapproachable. Mails and calls will go unanswered.
However if you choose to go for Sobha and that too one being still completed, then these are the things that you need to be aware of -
- Sobha will make sure that all the terms and conditions are in their favor.
- Any modifications that you ask Sobha to execute, they will botch these up big time. However, they will charge you a bomb for these modifications
- Payment is linked to completed floors. Hence to get money as fast as possible, they just keep on raising floors without completing the apartments on the floor. Once the entire payment is made, they take their sweet time to complete the project
- Their Service team comprises immature folks who do not know how to interact with customers. The turnover of these folks and Sales guys is very high. So you don’t know whom to talk to if anything goes wrong - Believe me a lot of financial stuff goes wrong and no coincidence that this is always in Sobha’s favor
- Sobha is well known for delays in handing over projects. Average is more than a year!
- They will not leave any stone unturned in extracting as much money as possible through heads like VAT, Service tax, BWSSB, KEB and Registration. They do not produce any receipts as proofs of payments made. Nor will they show any proofs when they decide to hike these charges arbitrarily
- The top management is completely unapproachable. Mails and calls will go unanswered.
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