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Spire Orion at South Spire World, Sector 68, Gurgaon

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Spire Orion at South Spire World, Sector 68, Gurgaon

Last updated: August 14 2017
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  • Re : Spire Orion at South Spire World, Sector 68, Gurgaon

    Originally posted by rvm123 View Post
    Bhaiyon...Any further updates? This project is making me edgy now.Have a ready customer for 3000-3100. What should i do? sell?
    i would suggest to sell it off bro ... was offered a 1800 something sq ft unit just 3-4 days back at 2825 psf !!!!

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    • Re : Spire Orion at South Spire World, Sector 68, Gurgaon

      Originally posted by ISHANb View Post
      i would suggest to sell it off bro ... was offered a 1800 something sq ft unit just 3-4 days back at 2825 psf !!!!
      Excellent price! I would have purchased if I had the money :P

      RVM, may be you should sell at 3050 & purchase at 2850 from Ishan's broker and make some 3-4 lacs

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      • Re : Spire Orion at South Spire World, Sector 68, Gurgaon

        Originally posted by ISHANb View Post
        i would suggest to sell it off bro ... was offered a 1800 something sq ft unit just 3-4 days back at 2825 psf !!!!
        It is a risky bet at present. They have delayed a lot. Some more delay means no buyer in resale.

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        • Re : Spire Orion at South Spire World, Sector 68, Gurgaon

          Originally posted by rvm123 View Post
          Bhaiyon...Any further updates? This project is making me edgy now.Have a ready customer for 3000-3100. What should i do? sell?
          You should surely sell it off at that rate. Its becoming a dead project. If Spire in Unable to start it by June end. I really doubt whether it would be executed. The construction costs are already nearing the figure at which they have sold off the initial units.

          - Gaurav

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          • Re : Spire Orion at South Spire World, Sector 68, Gurgaon

            Gaurav- Can you expand on your theory about increased construction costs? I am also getting concerned about the delay, but did not feel (at least so far) that the project might not be viable. One wouldn't think that increasing construction costs will impact viability.

            How many people here based on their discussion with spire/brokers etc feel that the project might be truly at risk?

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            • Re : Spire Orion at South Spire World, Sector 68, Gurgaon

              Originally posted by creed1357 View Post
              Gaurav- Can you expand on your theory about increased construction costs? I am also getting concerned about the delay, but did not feel (at least so far) that the project might not be viable. One wouldn't think that increasing construction costs will impact viability.

              How many people here based on their discussion with spire/brokers etc feel that the project might be truly at risk?
              Hi Creed,

              I am not saying the project is already dead.. It can become dead if construction doesnt start by June.

              I have made some calculations.
              The cost of construction as per sqft as per spire specification should be around 1500/sqft Today. Taking into account current inflation of construction materials and the infrastructure boom in India Inflation of construction material is around 18%. so by June end this cost would be

              1500*1.045 = 1567.5.
              Now if they take 3 years to construct. Though the maximum cost is incurred in last year but still I will take the cost is evenly spread in 3 years.

              Cost of construction Y1 522.5*1.18 = 616.55
              Cost of construction Y2 522.5*1.18^2 = 727.53
              Cost of construction Y3 522.5*1.18^3 = 858.5

              Total cost - 2202.58

              Most of the units they sold were at 2250 Rs. So if they start construction 1 month after June the cost will be more than that.

              In the above calculation I havent taken cost of capital for Spire into account, I dont know how much leveraged company Spire is but if their cost of capital is high that would make the thing even worse.

              One good point which goes in our favor is Spire is launching 2-3 more projects in GUrgaon, If they dont work on Spire South, People wont invest in their other projects.

              Taking this consideration I have given myself time upto June to watch how the things go, If they continue as they are I would exit my position at that time.

              - Gaurav

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              • Re : Spire Orion at South Spire World, Sector 68, Gurgaon

                Interest on 2 installments would be offset by bank interest on installments loans they definitely would have taken.

                Also they have employees, offices etc which are fixed expenses.

                What do u think!

                Smart think is that they didn't keep funds in bank. While they awaited permits, they have bought new projects and used the money garnered from installments into investments for new land banks.

                If they have taken money from bank they would have had to pay a premium of 20%+. Which has to be factored in.

                Also, there were other projects launched with this project in vicitiny and same time horizon:
                - ERA
                - CHD in sec 71

                whats the construction update from them. I don't think they have started constructing either.
                Last edited by MANOJa; January 30 2016, 02:37 PM. Reason: Text formatting.

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                • Re : Spire Orion at South Spire World, Sector 68, Gurgaon

                  Hi Amit,

                  I havent missed those.

                  That money taken till would already been adjusted in the cost of land and other marketing and adminstation costs. Rs. 1500 is purely construction cost. No land price adjusted in that.

                  Cost of land as per Spire South is considered is already a Sunk cost and do not affect the viability of the project.

                  I have met the Staff of Spire on few ocassions. The most of the staff are freshers from the colleges and that too not vey effective & intelligent people, so I would rather bank on my calculations then theirs.

                  As far as pricing strategy is concerened , A very low price product is seen in as negatively as a very high priced product untill the producer has already proved their low cost leadership or product differentiation quality.

                  For eg. You would never buy the product of Koryo and Akai... though they have so low price just because of suspision, but you will run for a Dell product, because they are known for their low cost leadership.
                  - Gaurav

                  Originally posted by amit2222
                  Gaurav, nice calculations.

                  But my instinct says that you missed 2-3 points in your calculations.
                  One could be the interest accrued on the booking + 2 installment spire has taken in the last 14 months from investors into this project.

                  Other could be the cost of land. Spire paid good money to acquire the first 12 acres and then another 5 acres or so. My sense is that they might have paid closer to 500-600 per sft.

                  So overall, spire knows their costings but don't know if they are conscious of further delay in the project.

                  Less than 3000.... on Sohna Road Gurgaon. This is unbelievable price which can go wrong very soon if no action is taken by the builder.

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                  • Re : Spire Orion at South Spire World, Sector 68, Gurgaon

                    Originally posted by amit2222
                    I don't think being an FDI spire would have taken a loan from bank. Second, if they didn't and as you rightly said invested the money accumulated towards buying more land banks then probably that makes sense. Earning 9-10% in FD is certainly not a wise decision if u decide to take loan at 20% and buy new landbanks.

                    Spire is actually bringing in money and expertise, the landbanks for 3 projects belongs to tashee, AN Buildwell and one more firm.

                    The projects in the surrounding of Sec 68, namely, ERA, Ansal, Tulip, Unitech have not yet started constructions as their EC is still awaited. So probably with fingers crossed we can see some happenings in construction sometime before June.
                    If none of the nearby projects have started construction why its only Spire whose resale price is suffering so badly?

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                    • Re : Spire Orion at South Spire World, Sector 68, Gurgaon

                      Originally posted by gaurav_chugh View Post
                      If none of the nearby projects have started construction why its only Spire whose resale price is suffering so badly?
                      Three companies are involed in it i.e Tashee, AN buildwell and Soni Infra. Could be one of the reason for resale in low pricing.

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