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Affordable office space in India

Affordable office space in India

March 9, 2018 in Investment News

Indian office markets continue to be amongst the most affordable and attractive in the world for occupiers as occupancy costs per workstation are one of the lowest, reports ET. Hong Kong is the most expensive office space location globally in terms of workstation costs of $27,431 per annum. Mumbai with its space in Bandra-Kurla Complex (BKC) ranks 163. According to the data for 215 global office markets, Delhi-NCR ranks at 84, Bangalore at 213 and Hyderabad at 214, indicating globally competitive pricing with regard to the talent available. In India, Delhi–NCR has emerged as the most expensive office location costing nearly Rs 430/sq ft a month per workstation. Rest of the Indian office markets ranked below the 100th position, making them some of the most affordable globally. Sorce: Economics Times

Blackstone is negotiating to buy three shopping centers to pursue retail realty play

Blackstone is negotiating to buy three shopping centers to pursue retail realty play

March 7, 2018 in Blackstone, Investment, Real Estate News

US-based private equity major Blackstone Group is stepping up efforts to spread its retail real estate assets footprint across the country and is currently in talks to acquire three retails malls, said two persons familiar with the development. These proposed acquisitions spread over around 2 million sq ft will push Blackstone’s retail portfolio from 5.1 million sq ft to over 7 million sq ft, making it the largest retail mall operator in India. “To support the next level of growth in the retail portfolio, Blackstone is eyeing opportunities in both tier-I and -II cities. The sizes of these assets vary from 2 lakh sq ft to 1 million sq ft, depending on the location that makes them commercially viable,” said one of the persons mentioned above. Blackstone, through its retail subsidiary Nexus Malls, has charted out an aggressive plan to expand its current portfolio of eight retail malls acquired over the past two years. The private equity major is already the largest investor in the commercial real estate in India with over 56 million sq ft portfolio and is now looking to take control of more retail real estate assets. Blackstone has recently roped in the former managing director of Godrej Consumer Products and Hindustan Unilever’s executive director — New Ventures, Dalip Sehgal as CEO at Nexus Malls, to help its strategy to grow retail assets portfolio. Blackstone’s current portfolio of retail assets includes 1.15-million-sq-ft Elante Mall in Chandigarh, nearly 1-million-sq-ft Seawoods Grand Central Mall in Navi Mumbai and two assets each in Indore and Pune. In November 2015, it had also acquired two malls in Amritsar and Ahmedabad from Alpha G Corp. Over the past few years, Blackstone has emerged as the most aggressive institutional investor in India’s real estate sector, picking up properties across major cities in deals that are turning out to be benchmarks in the sector. The company owns India’s biggest portfolio of income-producing office assets, totaling over 31million sq ft across key property markets of Noida, Mumbai, Pune, and Bengaluru. In its real estate portfolio, Blackstone has over 27 investments that own 56million sq ft across 28 operating office and non-office assets. Of its total $4.1 billion real estate investments, it has invested $2.8 billion in office real estate assets, while $1.3 billion has gone towards non-office real estate assets. It also has 19.2 million sq ft of commercial realty space under development across the country. With an aim to creating a portfolio of assets as the Indian market expands, some of the leading global private equity and sovereign funds, including Blackstone Group, Canada Pension Plan Investment Board (CPPIB), APG Asset Management, Xander Group and GIC have started investing in retail real estate, and this trend is expected to strengthen further. Source: Reality-Economics Times

SBI raises lending rates

SBI raises lending rates

March 5, 2018 in Investment News, SBI News

State Bank of India (SBI) on March 1 increased the marginal cost-based lending rates (MCLR) across various maturities, effective immediately. It is the first rate hike in the 1-year MCLR since the inception of a new lending rate system in April 2016, according to Thomson Reuters data. The rise in lending rates generally hints that EMIs (equated monthly installments) will go up. SBI, which accounts for more than a fifth of India's banking assets, raised the key 1-year MCLR to 8.15 percent from 7.95 percent, according to a notification. MCLR is a methodology introduced by the Reserve Bank of India (RBI) which sets the lending rates by the banks. SBI-raises-lending-rates-graph Banks are raising interest rates even though the Reserve Bank has left rates unchanged for a while now, as risks such as surging bond yields and more provisioning requirements erode their profit. On February 28, SBI raised interest rates on domestic bulk term deposits across most maturities. The country's top lender by assets has hiked interest rates on retail and bulk deposits by up to 50 and 75 basis points respectively (100bps = 1 percentage point). Source: The Times of India, Delhi/NCR

Six new business centres open by Vatika Business Centre this year

Six new business centres open by Vatika Business Centre this year

March 1, 2018 in Investment News, Real Estate News, Vatika Business Centre

Vatika Business Centre, part of Vatika Group, plans to open six business centres by the end of 2018, said Vineet Taing, president of the vertical. The company will open 20,000 sq ft of business centre in Delhi, 25,000 sq ft centre in Mumbai, two centres in Pune and one centre each in Chennai and Chandigarh in coming months. It currently has 15 operational business centres in top 8 cities having a total of 4 lakh sq ft of office space. The company claims to maintain over 80% occupancy in all its existing centres. Except for Mumbai, the price range in these centres will range from Rs 12,000-25,000 per seat per month. “In BKC, Mumbai the rent will vary from Rs 25,000-35,000 per seat per month,” said Taing. For Vatika, mid-sized companies form about 45% of the total clientele, while 35% share is taken up by corporate. Rest 20% is divided among SMEs, start-ups, and freelancers. Souce: Reality-Economic Times

Indiabulls AMC buys 2.35 lakh sq.ft. office space in Gurgaon

Indiabulls AMC buys 2.35 lakh sq.ft. office space in Gurgaon

February 28, 2018 in Indiabulla, Investment, Investment News, Real Estate News

Indiabulls Asset Management Company's private equity arm has acquired an entire commercial building with fully leased 2.35 lakh sq ft office space on NH-8 in Gurgaon from the US-based realty developer Hines India. The project, Sky View Corporate Park, is a multi-phase development planned on a 21-acre land parcel in the National Capital Region (NCR). The first phase of the project consists of two commercial buildings of 2.35 lakh sq ft each. Indiabulls AMC has acquired 100% equity in the Special Purpose Vehicle (SPV) owning the commercial building. Indiabulls has tied up with its co-investor Inter-Globe Real Estate Ventures (IGR), the real estate arm of Inter-Globe Enterprises, for this particular investment. The grade ‘A’ campus-style project has already been leased to a leading information technology (IT) services firm. Indiabulls Asset Management has acquired the commercial building through its fund Indiabulls Dual Advantage Commercial Assets Fund. This is one of the first transactions involving a domestic fund picking up a pre-leased commercial asset in India. Indiabulls AMC is planning to deploy more than. ₹1,000 crore in commercial office space over the next 12 months. Launched in 2017, Indiabulls Dual Advantage Commercial Assets Fund is a category-II AIF managed by Indiabulls Asset Management Company, a 100% subsidiary of Indiabulls Housing Finance. Indiabulls currently manages four AIFs and portfolio management schemes (PMS) in the real estate space across residential and commercial assets. Source: Economic Times

In INDIA this year Trump Organization going to launch its first Commercial Project

In INDIA this year Trump Organization going to launch its first Commercial Project

February 26, 2018 in Investment, Investment News, Real Estate News

After making India its largest market with the most number of Trump-branded properties outside of North America, Trump Organization is in the process to launch its first commercial real estate project in India this year. “We will be launching a commercial project in India this year,” said Donald Trump Jr., Executive V.C. of The Trump Organization. The American real estate firm is also keen on forming alliances for hospitality projects in India but will take a decision on this at an “appropriate time”, he added. In 2016, Trump Organization had entered into its first commercial office deal in India with private equity fund and developer IREO. The high-end 600,000-700,000 sq.ft. commercial project to come up on Gurgaon's Golf Course Extension Road will be built by IREO alongside a retail complex, the company had stated while announcing with tie-up then. On January 10, in its largest super-luxury residential development in India, Trump Organization had launched a 1.25 million sq.ft. project in Gurgaon. This project marked the entry of the Trump Tower brand into the Delhi-NCR region, and this was the fourth Trump Tower to be launched in India. The project, Trump Towers Delhi-NCR, to be developed by Trump’s exclusive India partner Tribeca Developers and Delhi-based realtor M3M India. Source: Economic Times

Haryana ongoing projects to be brought under RERA soon

Haryana ongoing projects to be brought under RERA soon

February 24, 2018 in Investment News, Real Estate News

The ongoing projects which were not included under the ambit of Haryana Real Estate (Regulation and Development) Act so far will now soon have to register with the Act, the newly appointed chairperson of the Gurgaon bench of Haryana Real Estate Regulatory Authority (H-RERA), KK Khandelwal, has said. “Rules cannot supersede the main Act. It is illegal and even the Bombay High Court has categorically said it. Even the ‘ongoing projects’ will now have to register,” Khandelwal said. In December, in a victory for homebuyers, the Bombay High Court had upheld the constitutional validity of RERA and its applicability to ongoing projects across states. The Central Act simply has a completion certificate as the benchmark for exemption of projects under RERA. It clearly states that projects that have not received completion certificate on the date of the notification of the Act will be considered ongoing. The Haryana government has been facing severe criticism from homebuyers for “diluting the Central law by changing the definition of ongoing projects”, leaving almost 90% of the city’s residential projects outside the purview of the Act. “After the judgment of the Punjab and Haryana High Court, the ongoing projects will have to come under RERA,” Khandelwal said. The Bombay HC has ruled out part-completion as the basis for exemption from RERA registration. “There are around 1,000 ongoing projects in Gurgaon and nearly 300 new launches. So far just 254 new projects have been registered. The number will go up soon,” Khandelwal said. Sources: Financial Express

Reasons to Invest in Commercial Property

Reasons to Invest in Commercial Property

February 20, 2018 in Investment News

Here are some reasons commercial real estate is attracting an increasing number of persons to invest in commercial properties:

1. Higher income potential

Commercial real estate generally offers higher returns than residential property. The yield produced on the commercial real estate is usually higher than that on residential properties, both on as per square foot and an initial investment basis. This is especially true if you decide to lease or rent a multi-unit commercial property, as the more tenants you have, the more income you can generate.

2. Cash flow stability and predictability

Predicting cash flow year-on-year is easier with the commercial property as commercial real estates leases are usually longer (3, 5 years or up to 15 years usually) than residential leases (12 months to 2 years).

3. Professional relationships with business tenants

The commercial property landlord-tenant relationship is between two businesses rather than two individuals, meaning interactions are usually more professional. As a result, commercial tenants and property owner interests are aligned, which helps the owner maintain and improve the quality of the property, and ultimately, the value of their investment. Furthermore, business owners and tenants generally take pride in their businesses and have a vested interested in maintaining their store and storefront; the same does not necessarily apply when dealing with residential tenants.

4. Limited hours of operation

Most businesses usually operate during the day (during business hours), meaning as a landlord you can rest assured that you won’t get a call from your tenant late at night informing you of boiler breakdown or loss of keys.

5. Diversification strategy

Owning a commercial property and leasing to multiple tenants lowers the chance that you will lose your rental income in any given month as the likelihood of all tenants vacating your commercial property at the same time is low.

In this case, you will still have tenants generating an income as opposed to a single-family residence where your investment income is dependent on the rent of a sole tenant.

         Souce: Domusholmes  

Top 8 urban areas to add 19.4 million sq.ft. retail space by 2020: Report

Top 8 urban areas to add 19.4 million sq.ft. retail space by 2020: Report

February 17, 2018 in Uncategorized

Top eight property markets across India are expected to add 19.4 million sq ft retail space supply over the next three years from 2018 to 2020. Demand for retail space is estimated to be around 15 million sq ft during the same period, showed a JLL study. These property markets will also witness a parallel rationalization of existing mall spaces that will help the market avoid an oversupply situation. As a natural course of events, it expects a few malls to close down or temporarily suspend their operations for repairs, renovation & upgrades. This will help the market create the necessary balance to maintain the rental values. The study revealed that 2018 will see the highest retail space supply since 2011. The total newly completed malls in 2017 were recorded at 5.6 million sq ft that are expected to see an increment of close to 40% year-on-year and rise to 7.8 million sq ft by the end of 2018. The largest contribution to this will be coming from the two southern cities of Hyderabad with 2.2 million sq ft and Chennai with 1.5 million sq ft which will see a significant influx of mall supply. Delhi-National Capital Region will be witnessing the highest supply of 2.3 million sq ft of new mall space in 2018, albeit recording an on-year decline of 28% since 2017. The year 2017 saw a withdrawal of nearly 5 million sq ft retail space with a closing down of 28 malls. Most of the rationalization took place in the markets of Delhi-NCR and Mumbai owing to the fact that these markets have significant mall stocks with a considerable percentage of the same performing below par. Encouraged by the urbanization, young population and rising proportion of nuclear families in urban locations, consumption growth along with the opening up of the FDI route for retail brands entering into India, is expected to further boost retail investments. Mumbai that has, in the past few years, seen a slowdown in retail development activities will continue to witness remain cautious. In 2018, it will see a decline of 13% on-year in new mall completions, further maintaining the status quo in the market. Source: Realty-The Economic Times

Gurgaon’s residential real estate market in revival mode

Gurgaon’s residential real estate market in revival mode

February 2, 2018 in Uncategorized

Over the past two years, the residential real estate markets in India have been passive. In Gurgaon, until the middle of 2016, the city witnessed subdued transaction activity and restricted new supply, with the demonetisation drive further impacting the market. Cautious buyer sentiment, coupled with high levels of unsold inventory, resulted in a slowdown in construction activity and sales. While there were a few projects in the third quarter of last year, the focus of most developers continued to be on offloading existing inventory, completing their ongoing projects and deferring new project launches. Ambiguity around the implementation of the Real Estate (Regulation & Development) Act (RERA) during the first half of the year resulted in transaction activity remaining low. On the flip side, the office market continued to see robust demand. During the April-to-June period this year, Delhi NCR witnessed close to 2 million square feet of office space absorption. A majority of this take-up was recorded in the Gurgaon micro-market. Due to sustained occupier interest, Golf Course Road, DLF Cyber City and NH8 contributed to almost 50% of leasing activity here. IT and SEZ spaces were the preferred options by occupiers. This positive traction in the office market, improving clarity around RERA, coupled with the effects of the demonetisation drive dissipating, are resulting in transaction activity in Gurgaon’s residential segment witnessing an uptick in recent months.        

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