IDFC buys BlueRidge SEZ in Hinjewadi for Rs 4500 million

Pune: Claimed to be the largest M&A real estate deal of the year in Pune, IDFC Limited has bought BlueRidge Special Economic Zone (SEZ) Phase 1 in Hinjewadi for a whopping Rs 4500 million. The sale was initiated and closed by the leading international property consultants, Jones Lang LaSalle India.  The equity stake will be bought in phases as per defined milestones.

Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India says, "Hinjewadi is the leading IT Hub of Pune and continues to be among the biggest draws for IT-based corporate occupiers as well as private equity investors. This M&A deal had been carefully structured to ensure optimal value for both parties."

BlueRidge SEZ is an IT SEZ being developed by Paranjape Schemes, one of the largest developers in Pune.

Aditi Watve, COO - BlueRidge says, "Phase One of the SEZ has approximately 1.45 million sq ft of leasable space and is already operational, with key tenants such as Accenture, Cisco and L&T. The closing of this deal is undoubtedly one of the highlights of our relationship with Jones Lang LaSalle India over a number of years. We found JLL a well-networked, client-focused partner who helped us achieve the right valuations and find the right investor.”

Jones Lang LaSalle India was instrumental in raising the private equity capital for this project in 2007 on behalf of Paranjape Schemes. This deal definitely underscores Pune's continued and ever-increasing potential and attractiveness as an IT destination of choice.

Mixed-use developments: All under one roof

The concept of mixed use development with retail, entertainment, shopping and accommodation all under one roof helps diversify the tenant mix in the total construction, and also de-risks the developer's investment. It also allows the developers to fully utilize the FSI and location. Such developments leverage on the location and provide multiple solutions under one canopy, says Shubhranshu Pani, Managing Director - Retail Services, Jones Lang LaSalle India.

Mixed-used developments have evolved to increase the viability of the projects and to utilize the location advantage. Residential market and Office market is witnessing buoyant growth and is considered as more risk free development. A new concept, which is also evolving, particularly due to FSI norms, is serviced apartments as an offering within mixed-use developments.

Malls have good reason to give space to hotels or office complexes these days:

• It increases the viability of project and also de-risks it

• It helps utilize available FSI optimally

• It makes the total use more diverse - in some cases mixed use is the best use for real estate development

Floor plate sizes have also in some cases forced developers to utilize the space for other purposes, since retail historically does not work on more than three floors

Success Rate Of Mixed Use Development Malls

Internationally, mixed-use developments have been used to form the social fabric and have done well. Mixed-use developments create a captive catchment for the retailers and other components. The model is fairly successful in both metro and Tier I cities. In fact, in light of the changing retail dynamics, the response for such projects in Tier II cities has also been encouraging.

Advantages Of Mixed Use Developments To Retailers

1. They add captive footfalls

2. Food and impulse item sales increase

3. In some cases, mixed-use developments can also help decrease the base rental and increase revenue for developers who operate on a revenue share model, which also increases feasibility for retailers

4. They generate a wholesome social fabric and create destination developments

 Retailers Please Note…

If the customer flow is not properly designed and enough parking space is not available, a mixed-use project can result in a bad experience for customers, with obvious negative repercussions on the entire development

Alchemist Buys 20 Acres For Residential Development At Durgapur

Kolkata:  Alchemist Township India Limited, a Delhi-based real estate developer, has bought 20 acres of prime land in the Aerotropolis being developed by Bengal Aerotropolis Projects Ltd (BAPL) at Durgapur, 180 kms from Kolkata. Leading international property consultants Jones Lang LaSalle India were the transaction mediators for this deal, which is West Bengal's largest land transaction in 2013 to date.

"This acquisition marks Alchemist's formal entry into the East India residential real estate space," states a company spokesperson, who further adds, "We are on an aggressive expansion and diversification drive, and the Durgapur Aerotropolis undertaking will be the first in several forays into the residential real estate domain. At Durgapur, we will be focusing on the budget homes segment."

This project envisages developing 2.4 million sq. ft. for housing. The company has set a target to develop 10 million sq. ft. for affordable homes in Eastern India, which will include Bengal, Orrisa, Assam, Bihar and Jharkhand.

BAPL's Aerotropolis (or Airport City) is a massive project in Durgapur, which is poised to reshape the aviation and industrial map of Eastern India. With Changi Airports International - one of the world's largest airport management companies - as a 26% equity stakeholder, the Durgapur Aerotropolis will have the country's first privately-owned and operated airport. The Aerotropolis is a unique urban development model that places the airport at its core, to act as a major economic growth driver for areas surrounding it.

Mayank Saksena, Managing Director – Land Services, Jones Lang LaSalle India says, "We have already seen the Aerotropolis model successfully implemented in Hong Kong, Singapore and Dubai. The Durgapur Aerotropolis is definitely going to change the socio-economic profile of the Durgapur-Asansol region, and is all set to become a major game-changer for West Bengal.

“Alchemist Group's acquisition of this massive land parcel for residential development is important not only because it the largest in West Bengal this year, but because it will be a vital chapter of real estate history in the making. The Durgapur Aerotropolis is going to be one of the most dynamic employment generators in the region - and indeed in India."

Partha Ghosh, Promoter Director - Bengal Aerotropolis Projects Ltd says, "This acquisition is a significant milestone for BAPL as well as the Alchemist Group. We are talking about the formation of a new metropolitan destination in Eastern India, which will rival Kolkata. The Durgapur Aerotropolis is already attracting substantial investments into industries, services and associated sectors - not only from organisations in Bengal but from across India as well as globally."

DB Realty achieves 19 per cent growth in sale value

DB Realty Limited, a Mumbai-based real estate Company founded in 2007, has in a short span of time covered enormous ground, thereby establishing its place as a leading real estate Company in India. DB Realty Limited builds residential, commercial and gated community developments. The company's expanding portfolio mostly focusing in and around Mumbai, under various stages of planning and construction.

DB Realty Ltd, announced its results for the financial year 2012 -13 .Commenting on the results, Vipul Bansal, CEO, DB Realty said.We remain committed to completion and delivery of our projects in a timely manner. We have completed Orchid Suburbia and the progress on our key business parameters continues at a reasonable pace. We have also seen a 19% growth in sales value as compared to last financial year and the company continues to consolidate its steps in the right direction for growth.

DB Realty consists of 90 million sq. ft of prime property - carefully crafted by 15,000 experts and managed by over 500 internationally and nationally acclaimed executives across 36 exclusive projects that have served close to 20,000 satisfied customers till date. Most of the projects are based in and around Mumbai, and are under various stages of planning and construction.

Widely accredited with redefining luxury living in Mumbai, DB Realty constantly seeks to design aesthetically striking residences, responding to changing needs and evolving lifestyles. Our residential projects include a wide range of premium condominiums and duplexes across North and South Mumbai, built in partnership with best-in-class contractors and master architects.

With a notable and consistent track record of growth, customer satisfaction and innovation, DB Realty is known to execute challenging projects with efficiency, speed and confidence. And being backed by a highly experienced team of experts from diverse backgrounds only strengthens our ability to do so.

Robust Demand For Mall Space In Chennai

Chennai:  Chennai retail mall space market saw a robust retail real estate demand, which ensured that vacancy levels in the city improve by 2% even after addition of 1 mn sq.ft. of new retail mall space.

According to Cushman & Wakefield’s latest retail reports, the overall vacancy levels in malls dipped to 15.8% on account sustained leasing action in both main streets and malls. Despite the infusion of 1 million sq. ft. of mall space in this quarter in Chennai, the city witnessed the maximum q-o-q fall in mall vacancy levels by about 2% in the wake of healthy demand and upbeat transaction activity.

In Chennai, Velachery witnessed the launch of the city’s largest mall accounting for 1 million sq. ft. of new mall space with almost full occupancy level. This quarter witnessed the deferment of 5 malls amounting up to nearly 1.73 million sq. ft. with Chennai witnessing the deferment of 2 malls amounting to 530,000 sf. Although the overall mall vacancy level dropped by 2% to nearly 6.5%, the mall rentals maintained a status quo.

Main streets like Nungambakkam High Road and Khadar Nawaz Khan Road witnessed moderate increase in rentals in the range of 4-5% due to the prevalent high demand along with lack of new supply in these locations. Usman Road-North witnessed nearly 9% increase in rentals due to the scarcity of quality retail space options coupled with significant demand from jewellery brands. Rentals in most main streets and malls are expected to remain stable in the next quarter except Khadar Nawaz Khan Road, Pondy Bazar, and Cathedral Road-RK Salai, which may witness an uptrend as indicated by the enquiries.

Jaideep Wahi, Director, Retail Services, Cushman & Wakefield commented, “Malls now prefer to open with near full occupancy and a fall in the mall vacancy level, as seen in Chennai, is indeed a positive trend as a boasts of healthy demand and robust transactional activity. However, a close tab on the infrastructure activities is needed as they take a toll on the retail real estate in the short term, not only on the main streets but also on malls. ”

Given the surge in demand at Usman Road-North in Chennai, the main street rentals appreciated by about 9% over the quarter. Established main streets of Nungambakkam High Road and Khadar Nawaz Khan Road in Chennai and prime retail properties in FC Road witnessed quarterly rental escalation of 3-5% due to increased demand and limited space availabilities. This quarter also witnessed the deferment of two malls in Chennai amounting to 5, 30,000 sq. ft.

Nationally, there was only one mall of 1 million sq. ft. that got operational in Chennai while nationwide vacancy in mall spaces improved marginally by 1% over the last quarter. Activities were mostly concentrated on mall spaces rather than main streets due to non-availability of quality space in the main streets. 

This quarter witnessed the deferment of 5 malls amounting up to nearly 1.73 million sq. ft. with Chennai witnessing the deferment of 2 malls amounting to 530,000 sf.  While Pune witnessed the deferment of 1 mall of 700,000 sf mall space, NCR and Bengaluru witnessed the deferment of 1 mall each of 500,000 sf.

Retail In Asia Pacific - Mercury Rising Beyond India And China

China will witness the retail wave rise in its next 50 cities even as Hong Kong continues to leverage its proximity to the mainland to fuel its retail boom. Meanwhile, India still awaits the new FDI norms to kick-start investments, says Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India

Reflecting the improving economic sentiments within the Asia Pacific region, retail is once again emerging as a preferred asset class for investors who see consumption as being closely aligned to the region’s growth.

China will witness the retail wave rise in its next 50 cities even as Hong Kong continues to leverage its proximity to the mainland to fuel its retail boom. Meanwhile, India still awaits the new FDI norms to kick-start investments.

However, interest is also rising for the favourable demographics of Philippines, Thailand, Sri Lanka and Indonesia, where evolving consumer preferences influence expansion strategies for retailers. The retail market drivers in these countries are a growing middle class and the growing share of young, generously salaried and highly aspirational population from the IT/ITeS sector. Similar to what is being seen in India and China, the Governments of these countries are in various stages of opening up the retail markets for foreign participation.

Like India, the Philippines benefits from a considerable young English-speaking talent pool and service-oriented culture. The resultant high incomes and a enhanced level of overseas worker remittances are driving domestic consumption. With massive strides forward in infrastructure, utilities and tourism (all of which attract investments) we foresee enhanced job creation, which will directly influence consumption. The fact that the Philippines currently has four of the world's 12 largest malls stand testimony to this.

Despite various setbacks, retail consumption in Thailand has expanded by more than 50% over the past decade. In the past five years, Bangkok has received 1.73 million square meters of new modern retail space – an impressive increase of 49% from 2008.  Apart from continued economic growth, rising incomes, new residential catchment areas and the evolution to modern retail formats, Bangkok also benefits from its vastly improved mass transit infrastructure. 

Sri Lanka – particularly Colombo - is another retail hotbed attracting a lot of attention. It has witnessed a steady upward trend in the IT/ITES sector during the past decade, with several off-shore centres now operating in the country. Colombo already has eight operational shopping malls, with an average vacancy rate of only 3-8%. Another 1.05 million square feet of organized retail space will be added in Colombo by 2015.

This implies that, from a geographical expansion into the Asian markets, retailers are advised to adopt a two-pronged approach - Vertical penetration into existing markets such as China, India and Hong Kong, and a flanking strategy for countries such as Philippines, Thailand, Sri Lanka and Indonesia.

Infrastructure Status for Affordable Housing

When affordable housing sector gets infrastructure status, the Government will provide tax benefits, and institutional lending to that segment also eases. Banks are directed to increase lending to the sector and companies engaged in the segment can also raise bonds to generate funding for their projects, says Kishor Pate, CMD of Amit Enterprises Housing Ltd.

In February of this year, Union Housing Minister Ajay Maken had indicated that the Centre is considering the possibility of according infrastructure status to affordable housing. While we have still not been given greater clarity on the progress of this initiative, it is certainly a great need of the hour for India’s larger cities.

As a real estate segment, affordable housing has been languishing for a long time, even though it is the very segment in which the highest demand exists. The constant hype about the rising fortunes of India’s fast-growing affluent class has ignored the fact that most Indians still cannot afford to buy their own homes. This is true even for the original inhabitants of rural areas that have been added to city limits.

So far, infrastructure status was given only to industries and companies active in building highways, ports, airports, Metro rail systems, etc. Real estate in any form has so far not been extended these benefits. When an industry is given infrastructure status, it basically means that the Government has recognized it as a necessary sector which caters to the general good of the nation.

By virtue of this, it becomes eligible for various incentives and subsidies at the Central and State level. When a segment of housing gets infrastructure status, the Government provides tax benefits, and institutional lending to that segment also eases. Banks are directed to increase lending to the sector, and companies engaged in the segment can also raise bonds to generate funding for their projects.

However, it should also be noted that companies enjoying the benefits of infrastructure status eventually wind up paying more taxes. This is because the incentives that make the creation of affordable housing more viable for them also lead to higher earnings, which are naturally taxable.

Nevertheless, the good news is that this initiative – when implemented – will boost investments flows both from domestic and foreign investors, thereby increasing supply. Increased supply results in higher competitiveness and helps keep prices down.

RBS launches real estate services for HNIs

Mumbai: British lender Royal Bank of Scotland has launched a real estate services

vertical aimed at high networth clients.

"The Real Estate Services is a referral based offering which will offer a comprehensive range of real estate solutions to high networth clients," it said in a statement.

The bank staff will work with clients, understand their goals and risk appetites, and then help them select a real estate service provider.

Product head Anand Moorthy said investors are looking beyond purchase of premium homes and are also attracted to pre-leased commercial and retail property which creates the need for real estate solutions.

Shiv Gupta, managing director, RBS Private Banking and director of RBS Financial Services said real estate occupies for 20-30 of the investment portfolio for a high networth client.

Jain Group plans affordable housing projects in four cities

Kolkata: The city-based Jain Group is planning to build affordable housing projects across four east Indian cities, covering five million square feet of space at an investment of about Rs.2,000 crore by 2014-end.

The real estate firm is currently developing eight projects in Kolkata, Durgapur, and Siliguri in West Bengal and Bhubaneswar in Odisha.

It has recently launched a residential project, christened 'Dream Eco City', at Durgapur in West Bengal's Burdwan district.

"Under the first phase of this project, we have already launched 800 flats. The first phase of the project will be completed within 40-48 months," Jain Group executive director Rishi Jain told IANS.

According to Jain, the total investment in the first phase of the project would be Rs.350-400 crore.

The company said the unique residential project, spread over one million square feet, uses biophilic design, which means right from the designing stage, nature will form an intrinsic part of the project. It would also house a five-star hotel within the campus.

The firm would tie up with an international hotel brand for running it.

Jain said the real estate developer had planned two phases for this project and it would decide whether to come up with more phases based on the demand.

The group will also roll out two more residential projects in Durgapur -- one in 2013-end and another in mid-2014.

It is also developing a housing project at north Bengal's Siliguri at an investment of Rs.150-200 crore.

"We are planning to give possession by the end of this calendar year," the official said.

The group, having diversified into hospitality business, has already launched hotels in Kolkata, Siliguri and Durgapur. It has tied up with Best Western, the world's largest hotel chain, for its five-star hotel in Kolkata.

It has a plan to roll out 15 hotels around the country by 2015.

Unitech to invest Rs 500 crore for 'The One' project in Gurgaon

Real estate major Unitech has decided to invest over Rs 500 crore on developing a luxury housing project in Gurgaon, which it was announced a few months back. 'The One' project will house around 300 flats, at the starting price of Rs 4.5 crore, a report said.

According to sources, Unitech is expecting an estimated sales revenue of Rs 1,500 crore from the project once it is completed by 2017.

"This is a very ambitious project for the company. It is being developed on an area spread over 16 acres. Unitech will invest over Rs 500 crore to develop the entire project," a source told PTI.

The project, comprising six residential towers, is being developed at Sector 69 in Gurgaon and will be completed in little over four years of time. The company started the construction about six months ago and more than 10 percent of the work has already been completed.

"The company is going very aggressively on the project. It has already spent Rs 60 crore on construction of The One... All the funding will be done through internal accruals and sales revenue," said a source.

When contacted, a company spokesperson said: "The One is a premium product of Unitech. We are happy with the encouraging response from customers for The One."

Sources said meanwhile that prices of the flats will start from Rs 4.5 crore. The average size of the flats will be around 4,500 sq ft.

The company will construct six towers in the project and each will have two flats on every floor.

The National Capital-based Unitch has total land bank of around 6,500 acres and is developing about 100 projects across the country.

In December, developers including Supertech, Ansal API and Mantri Realty had announced investments of nearly Rs 8,000 crore on various projects over the next four years, signalling bounce back of the real estate sector after a prolonged slowdown.

In addition to this, Mantri Realty had said last month that it plans to launch six housing projects within next 3-4 months to develop around 2,300 flats across the country, entailing an investment of about Rs 1,500 crore in the next three years.

Pune's New 'Green Living' Communities

India is now seeing a strong trend in 'smart' and 'green' homes, which have high levels of lifestyle quotient attached to them, says Kishor Pate, CMD - Amit Enterprises Housing Ltd.

Over the last decade, lifestyle has evolved as an important and often decisive factor in the Indian real estate industry. With the increasing presence of the IT / ITeS sector in many cities of the country, a large segment of Indian home buyers have entered a higher level of affordability and therefore tastes in homes. This has led to a greater emphasis on larger sizes, evolved ambience and interior décor in the choice of properties. India is now seeing a strong trend in 'smart' and 'green' homes, which have high levels of lifestyle quotient attached to them.

 

For an increasing number of Indians, the focus of home buying has now shifted from functionality and inflexible budgets to lifestyle homes. Comfort, convenience and environmental awareness and responsibility play an important part in home buying today. Likewise, privacy and self-sufficiency are also part of the new mantra.

 

Home buyers in India who have been exposed to residential real estate trends in countries such as the US, UK, Singapore, Australia and Canada now wish to emulate the developed world's focus on sustainable living. Among other things, this has resulted in an increasing demand for green homes. Many developers now focus on bringing the world’s contemporary residential concepts to India - and projects with green living features are in increasing demand.

Green homes are more than just a prestige tag. Residential projects that have been designed and constructed on such lines ensure the lowest possible environmental impact of the building and its premises during the entire project's life-cycle. The result is reduced energy consumption, pollution and waste generation.

Interestingly, the fast-emerging concept of green homes is having a visible socio-economic impact on the neighbourhoods which are thus created. Inhabitants of environmentally sustainable residential projects are aware that the onus of maintaining the overall sustainability quotient of the project is not solely on the developers and the infrastructure and facilitation provided. They are aware that true green living requires a new mind-set and a new lifestyle, as well.

The whole concept of green homes is admittedly still in its infancy in India. However, if we take the city of Pune as a case in point, it actually emerges that there is now an annual increase of 10-15% increase in home buyers who will not settle for anything less. These homebuyers are committed to the health of their families, exercising their option of wasting less energy and towards preserving the city's environment for the future generations.

As a result, more and more green home projects in Pune are now actually populated by inhabitants who passionately believe in and adhere to sustainable living concepts. In a market where many of Pune's neighbourhoods were previously tailored according to professions, income brackets and social status, today we are talking about an entirely new and highly progressive selection process whwrein entire residential communities take up the cause of environmental sustainability.