Actis Plans To Exit Its First Realty Fund

The global private equity firm Actis is planning to exit its first and only PERE fund in India. Actis had invested $25 million in a residential and retail project in Bangalore.

The private equity firm Actis is pondering over exiting its private equity in real estate (PERE) fund from India.  The private equity firm had invested $25 million in Bangalore for the development of a residential and retail project. Continue reading

Office space demand trends, Property consultants differ

Global property consultants like DTZ, JLL, Cushman & Wakefield, CBRE, etc. are coming up with contrasting reports regarding the office space demand.
Office space demand rises or falls, experts vary.

Office space demand rises or falls, experts vary.

BANGALORE: A recent report of CB Richard Ellis, a US based property consultant, stated that the office space absorption in India rose by 37%. The rise is on a year-to year basis. In the opinion of CBRE, January 2013 witnessed higher demand.

Meanwhile another American property consultant stated that the office space demand is down by 37%. This report of Cushman & Wakefield was absolutely on the opposite of what the CBRE report.

The reports of Jones Lang Lasalle and DTZ India are also not complementing each other. While JLL speaks of a moderate demand, DTZ speaks of a fall in the demand.

As per the report of JLL, office space demand is more or same. Compared to the first quarter of 2012 the demand is moderate this year. The report of JLL stated that in most of the cities the demand for office space remained moderate.

As per DTZ India the office space absorption is down by 20%. Anshul Jain, CEO at DTZ India, said that only 4.8 million of office space was absorbed this year. This is 20% lower than the 6 million sq. ft. absorption of 2012. Continue reading

Bangalore saw doubled PERE investments in 2012

Global real estate consultants Cushman & Wakefield reported that Bangalore received nearly Rs.32.3 billion of Private Equity in Real Estate- PERE investments.
PERE investments have risen in Bangalore.

PERE investments have risen in Bangalore.

BANGALORE: According to the latest report by Cushman & Wakefield PERE investments have increased in Bangalore. Last year the city received Rs.32.3 billion in the form of private equity investments. The global property consultants reported that the amount is double the size than that of last year.

Most of the private equity investments were done in the commercial sector. The PE investors like Blackstone and others shifted their investment plans to the commercial sector.

While Rs.32.3 billion was invested in the commercial sector, only Rs.28.5 billion was invested in the residential sector. However the pre-launch residential properties witnessed highest number of PE deals. Though about 25 PE deals took place in the residential sector, the amount was comparatively far lower.

With Rs.13 billion of PE investments, Mumbai stood on the second spot. Delhi-NCR stood third with INR Rs.7 billion of investments. While Mumbai witnessed a minimal decline of 2%, NCR saw a sharp decline of 44%. Continue reading

Global Real Estate Investment Markets, India in Top 20

India ranks 20th among the top real estate investment markets of the globe, reported Cushman & Wakefield. With $ 304.1 billion of investment value, China stood top.
China tops the list of real estate investment markets.

China tops the list of real estate investment markets.

MUMBAI: As per the latest report of the global real estate consultant Cushman & Wakefield, India is ranked 20th among the top real estate investment markets of the globe. International Investment Atlas, the latest report of C&W, global real estate investment market saw a 6% rise in the investment activities last year.

In the last quarter witnessed more volume of investment. It signals revival of real estate investment. With the revival taking place, the investment in 2013 is believed to grow by 14%.

China tops the list. $304.1 billion was invested here. USA stood second with investment value of 267.1 billion. Both China and USA hold the lion’s share of the entire real estate investment. These two remained the top real estate investment markets of the world. Continue reading

Commercial realty hit by weak office space absorption

Data provided by DTZ and Cushman & Wakefield show that there has been a steady decline in the rate of office space absorption by IT firms. This has affected the commercial realty, the report added.
Lowered IT demand affects commercial realty sector.

Lowered IT demand affects commercial realty sector.

Commercial realty sector is hit by lowered office space absorption by IT companies. Tracking the office space absorption in top eight cities of India, property consultants C&W and DTZ have reported that the rate of office space absorption has been falling in top cities of India.

Last year, 29.05 million sq. ft. of office space was absorbed. This figure shows a 23% decline in the rate of office space absorption compared to the previous year.

The contribution of the IT sector was a mere 44% last year. On the other hand the information technology sector had contributed over 64% of total office space absorption. This slowdown of IT segment affects commercial realty sector adversely. Continue reading

Connaught Place & BKC among the Most Expensive Office Locations

Connaught Place in New Delhi and Bandra-Kurla Complex(BKC)in Mumbai have been counted among the top and most expensive office locations in the Asia-Pacific region.
Connaught Place: the low class business people are forced to sell their goods in the open market as offices have become hotter here.

Connaught Place: As offices have become hotter here, the number of street-marketers may increase.

According to Cushman & Wakefield’s annual survey titled ‘Office Space Across The World 2013′,  Connaught Place  in New Delhi and Bandra-Kurla Complex (BKC) in Mumbai are included among the most expensive office locations in the Asia-Pacific region. Surprisingly the list dropped Nariman Point from the top 10 list.

As per the global real estate consultant’s report, Connaught Place; where the yearly cost of office space per sq. ft. was $162, stood second in the top 10 list of the region and fourth in the worldwide list. While with $82 per sq. ft. of yearly cost, BKC ranked eighth in the list.

Meanwhile Nariman Point which was considered as one of the most expensive office locations in India was not included in the top 10 list.

Connaught Place emerged as the fourth most expensive office locations in the world. This is mainly due to the shortage of office space in the area, said Mr. Sanjay Dutt, executive MD, C&W. Continue reading

Bangalore Sees Lower Office Space Absorption as IT Demand Falls

Compared to 2011, the office space absorption has fallen in Bangalore. Experts opine that the situation was the result of weaker demand from the IT and ITeS sectors.
Office space absorption in Bangalore fell due to the lower demand from IT and ITeS sectors.

Office space absorption in Bangalore fell due to the lower demand from IT and ITeS sectors.

Real estate experts said that the office space absorption in Bangalore has been dropped as the IT (Information Technology) and ITeS (IT enabled Services) did not raise much demand. The reports show that the office space absorption has dropped by 24% last year.

Cushman & Wakefield, a global real estate consultancy, reported that in 2012 nearly 7.3 million sq. ft. of office space was absorbed. This rate of absorption is very lower to the 9.59 million sq. ft. of 2011. If the IT and ITeS sectors had shared nearly three fourth of the total supply in 2011, in 2012 their absorption is just above two fourth of total supply. Continue reading

MTNL Plans To Raise Rs.5000 Cr Via Divesting Realty Assets

Mahanagar Telephone Nigam Limited (MTNL), the state- run telecom provider, plans to raise an amount of Rs.5000 Cr though divesting their real estate assets. MTNL plans to divest its properties located in Delhi and Mumbai.
What will be the fate of MTNL

MTNL struggles? When Mobile capitalizes!

MTNL has revealed its plans to raise an amount of Rs.5000 Cr through divesting its realty assets located in Delhi and Mumbai. With this plan, the state-run telecom provider has approached a global real estate consultancy.

The debt –driven telecom service provider has directed the real estate consultants to explore the possibility of mixing up of lease and sale. The telecom also has plans to redevelop land parcels on a public – private partnership basis. In short the MTNL’s monetization plans include redevelopment of land parcels, besides leasing and selling.

Overtaking other global real estate consultants like Jones Lang LaSalle, Cushman & Wakefield and CBRE, DTZ has won the MTNL bid. DTZ has been operating in India for nearly a decade. Continue reading

New Home Launches Fall By 16%: Cushman & Wakefield

Cushman & Wakefield reported that the new home launches in top Indian cities fall by 16%. The global property consultant had tracked top 8 cities of India.
New home launches decline

New home launches declined: reported Cushman And Wakefield.

According to the Cushman & Wakefield report, nearly 1.62 lakh housing units were launched in India’s top 8 cities in 2012. The number shows that the new home launches are down by 16% compared to 2011.

Cushman & Wakefield had studied the number of home launches in NCR, Mumbai, Bangalore, Chennai, Kolkata Pune, Hyderabad and Ahmedabad. Based on their study the global property consultant reported that the residential market across India has dropped. Continue reading

Luxury Housing Mends Sluggishness Of Real Estate Market

Real estate market showed signs of a comeback with improved sales in the luxury housings. The sluggishness has hampered the real estate market across the country.
Sale of Luxury Housing regains pace in Pune.

Sale of Luxury Housing regains pace in Pune.

Pune real estate market witnessed a steady improvement in the sales of luxury housing. Real estate experts reported that there has been a steady improvement in the luxury housing sales. This is comparatively higher in Pune.

Cushman & Wakefield India reported to Times of India (TOI) that nearly 50% of total luxury housing units are launched in Bangalore. Pune’s contribution is about 8%. Continue reading

Falling Demand Forces Real Estate to Bid Small Offices

Mumbai Real estate firms sell out their small office space due to lower demand. Corporates and financial institutions do not raise any demand for office space.

lower real estate demand

REAL bElow STATE  of demand

Real estate firms are forced to sell smaller offices by dipping demand. Some of the prominent property developers like Wadhwa Group, Hubtown, Lodha Developers, Kanakia, etc. have started selling of their smaller office spaces. Continue reading

How Koramangala Became a Hot Real Estate Destination in Bangalore

The area spread over 1,800 acres in eight blocks, was once petrified by mosquito menace and mangroves. Once upon a time localities used to call Koramangala ‘Sollemangala’ (Solle means mosquitoes in Kannada). It was a village and was considered not a great place to live for a Bangalorean in the 80s and 90s.

Today, it is one of the hottest real estate destinations in India’s Silicon Valley. “I would kill to get a place in Koramangala,” said MR Jagannathan jokingly. The 60-year-old retired employee stays very close to Koramangala. “It used to be in the outskirts of the city when I could afford it. Now, unfortunately I cannot buy a place there.” This is just a glimpse of how much the landscape and aspiration for Koramangala has changed over the years.

“You won’t believe it. I once had an offer to buy a plot in Koramangala for a few lakhs in the 90s. That time if I would have stretched a bit I could have actually owned something in Koramangala, but it was not so good then. This is one decision I regret to have made,” added Mr Jagannathan.

The Rahejas, real estate developers, are often credited with changing the landscape of Koramangala when they come up with mixed-use project called Raheja Arcade. Many companies those days shifted from other parts of Bangalore to Raheja Arcade. Then Forum Mall, which further increased the value of the locality. In fact Forum is one of the earliest malls in the country, which was constructed to meet international standards. Even to this day, it is one of most successful malls in the country.

At present, the rentals for mid-segment residential properties are expected to grow by 5-10 per cent in the Koramangala locality over the next few months. “This is due to good social as well as physical infrastructure, good connectivity to various business districts and availability of premium developments,” said Naveen Nadwani, director South India, for Cushman & Wakefield, a real estate consulting firm.

“Rentals for residential properties in the high-end segment are expected to remain stable while mid-segment are expected to witness further increases on account of persistent demand. While in the commercial office market space as well as in the retail segment, rentals may remain stable in the short to medium term,” added Mr Nadwani

While the rate for land parcels range between Rs 13,000-15,000 per square feet, not much of commercial space is available for sale. “At present, no major land parcels suitable for developers are available in Koramangala. Only a few scattered small plots ranging up to a size of 3,500 sq ft owned by individuals are available,” added Mr Nadwani. The residents of Koramangala are buying whatever is available. Recently, a well-known local businessman bought two adjacent plots in the vicinity. 


Realty Industry Feels Rate Cut as Benefit for All

The interest rate sensitive realty industry Tuesday welcomed the Reserve Bank of India’s (RBI) decision to cut key lending rates by 50 basis points, and felt the move will boost builders’ and home loan customers’ sentiments alike.

“For the real estate in particular, this is indeed a welcome step by RBI. While the sector was already reeling under the pressures of high interest rates, this will allow banks to lower down the interest rates significantly. Both buyers and developers shall get benefitted from this,” said Pradeep Jain, chairman, Confederation of Real Estate Developers’ Association of India (CREDAI).

Home loan buyers are currently paying a higher rate of interest in the range of 11.50-13 percent on floating basis. Customers, who had earlier opted for dual rate scheme and now just exhausted their fixed tenure rate, are paying the same rate of interest.

Other industry players like Unitech and real estate consultancy firm Cushman & Wakefield also welcomed the move, which they said would boost business confidence.

“This development will have a positive impact across the economy and particularly in the real-estate industry. Not only will the cost of borrowing rationalize, this reduction will also provide an impetus to growth and enhance business-confidence,” said Ajay Chandra, managing director, Unitech.

Cushman & Wakefield India said that the banks are expected to pass on the reduction in interest rates to consumers, which will provide a positive boost to market sentiments especially in the residential sales markets.

“We expect to witness some pickup in the volume of sales transactions. For the whole of last year, end buyers had to defer their purchase decisions as they were facing the double-edged sword of rising interest rates and stubborn price levels,” said Anurag Mathur, managing director, Cushman & Wakefield.

The RBI’s announcement also buoyed the BSE Realty index which grew by 32.50 points at 1,813.97 points around 2:50 p.m. Stocks of realty industry players also surged with DLF’s scrip growing by 3.75 points or 1.88 percent at 203.25 points.

Real Estate Sector Brokers bail out Developers with Buyback Deals.

The prices are not moving up in metros for more than a year now and the buyers including investors are staying away from making a purchase decision, so brokers are in a fix currently.

An Industry watcher said that the Real Estate Developers are facing a cash crunch in the NCR and Mumbai Metropolitan Region and are approaching brokers to underwrite their properties to save the day and maintain prices of properties in a bid.

“So as the new real estate projects that are launched, brokers underwrite a bulk of apartments and the developer can show it as sales,” said Sachin Sandhir, managing director, Royal Institutions of Chartered Surveyors.

Kaustuv Roy, executive director, Cushman & Wakefield, said “For the whole system to work two things are very important, first there should be buyers in the market and second the prices should continue to increase at a faster rate.”


Top Brand Hotels looking for growth on Noida-Greater Noida Expressway.

Noida-Greater Noida Expressway is going to have one more addition to its glory as the top brand Hotels such as Marriott, Starwood, Oberoi and Hyatt have turned their interest in this locality.

As per the Analysts, it is going to be one among the greatest hotel hub in the country with an addition of around 2,500 hotel rooms. Projects such as Marriott Hotel, Marriott Executive Apartments and Fairfield Inn are already announced. These projects are expected to be very successful as the tourists will arrive in New Delhi, Agra and Formula One which is close to Greater Noida.

Akshay Kulkarni, director-hospitality, Cushman & Wakefield has recently said that “Availability of land in New Delhi to construct future hotels is low. As the most projects on the expressway come under mixed land use category, it has created an opportunity for hotel firms to bring their brands into the NCR region”.

After the recent Supreme Court judgement, hotel companies that were allotted projects by the UP government in 2007 are also likely to construct hotels. In the list of hotels, Canadian luxury brand Four Seasons, Inter-continental Hotel’s brands, including Crowne Plaza, Holiday Inn and Holiday Inn Suites are also going to be included.

Ankita Mehta, vice president, hospitality & commercial, Logix Group, said, “The availability of large tracks of land on the Expressway will lead to the development of five stars and luxury hotels in the area.” Marriott Hotels will manage the Logix Group Hotels.

HVS India, a Hotel Consultancy firm has tracked that construction of around 30 hotels has started in Noida and Greater Noida. They also believe that average room rates may get affected by the large supply of hotels in such a short term and may also create pressure on occupancies.