Indian realty in deep trouble as profits down, debt rises

MUMBAI, Oct 25 (Reuters): When even the man who is building the world's tallest residential tower speaks of real-estate slowdown that could last for years, it is clear the foundations of a once-soaring industry are starting to shake. Behind gleaming white gates, Abhisheck Lodha's 117-storey World One - where luxury apartments start at $1.5 million and rise past $15 million - will boast private swimming pools at cloud level and a 1,000-foot-high open-air garden. But the promised 60-km view across Mumbai will look down at a distressed real-estate industry crippled by high interest rates, rising costs and a sales crash that has left developers struggling with mounting piles of debt. "We're certainly seeing a reduced rate of growth," the US-educated managing director of Lodha Developers told media. "Real estate, instead of growing at around 15 per cent, will probably grow at 9-10 per cent for the next couple of years." From the top of cranes that tower over the World One plot, where a thousand labourers dodge trucks to work on the colossal foundations of the half-kilometre-high tower, the view of a neighbouring site provides a picture of the fallout. DLF, country's largest developer, had planned a luxury tower to rival the Giorgio Armani-designed apartments of Lodha's record-breaking skyscraper next door. But that dream looks set to disappear with the sale of the plot as the firm scrambles to reduce its debt of $4.67 billion. "India has two types of real-estate companies: heavily over-leveraged and reasonably leveraged," said Niranjan Hiranandani, one of India's leading real-estate developers. Hiranandani's son, also a developer, built the world's current tallest residential block, the 395-metre, 90-floor-high 23 Marina tower in Dubai that was completed in June.