JLL India Appoints Manish Aggarwal as MD for North and East

Leading international property consultancy firm JLL India has appointed industry veteran Manish Aggarwal as Managing Director - North and East India operations. Previously, Aggarwal was MD - North and East India at Cushman & Wakefield, and prior to that held key positions at Knight Frank and Colliers. He will be based in Gurgaon.

Manish Aggarwal

Manish Aggarwal will primarily focus on strengthening JLL's Delhi NCR transactions businesses, while simultaneously overseeing the firm's Eastern India operations. As a part of his new role, Aggarwal will also assume a senior leadership seat within JLL's India Leadership Council (ILC), a press note from JLL India said.

Santhosh Kumar, CEO - Operations & International Director, JLL India said: "Drawing on his extensive experience as a real estate expert across asset classes, Manish Aggarwal will drive our growth in North and East India. He has managed a variety of complex, high-value assignments with major Indian and international corporate clients, developers and funds. His indubitable abilities and deep connections with key stakeholders in these two critical markets made him the natural choice for JLL."

"As a real estate services professional, the move to JLL India is a logical transition for me," said Manish Aggarwal. "During my long career in the realty space, I have witnessed the transformational growth of this firm globally as well as in India. It is the pre-eminent and leading name among international property consultancies in India, with a vast operational platform that presents me the kind of challenging professional opportunities I prefer. I am highly enthused about applying my core competence in the North and East Indian markets to advance JLL's business there and to spearhead the next phase of growth in these critical markets," he added.

Manish Aggarwal's multi-faceted expertise, which includes identifying new business avenues, cross-selling opportunities, strengthening client relationships and ensuring service delivery have come into play from Day 1 of his appointment at JLL India. He is one of the rare real estate professionals specialized virtually in all key aspects of the realty business. Apart from office real estate transactions, he is an expert in real estate-focused Capital Markets, Land and Industrial services and Investment Services, including Valuations.

With the Delhi NCR office being one of JLL's most dynamic business centres, Aggarwal's leadership will contribute significantly to reaffirming the firm's stature as the region's leading International Property Consultancy.

Air India plans REIT route to reduce debt

New Delhi: In a move that could give the company significant tax breaks and also improve its finances ailing state-owned airline Air India is mulling to convert its non-core real estate assets into a real estate investment trust (REIT) and list it on the stock exchanges.

Air India has about 800 properties at prime locations across the world, which include several acres of land, office buildings, sports stadiums and residential colonies. Its Mumbai headquarters on the high street of Marine Drive alone is estimated to be worth about Rs.2,250 crore.

In 2013-14 the air carrier reported Rs.19,300 crore revenue but ended with a loss of Rs.5,388.82 crore. The airline’s debt was stood at Rs.40,000 crore as on 31 March.

“We have a lot of land assets and this is one of the routes of monetization. We are considering the option, but a lot of work has to go in,” an Air India executive, who did not want to be named, said.

He said financial experts had already made a presentation to Air India management on the merits of the REIT route and that the airline’s finance team plans to move forward with this.

“If it works out, we will hold 51% in the REIT; the properties will remain ours but be leased out at the best prices,” he added.

REITs, which were first introduced in the US around 50 years ago, are listed on exchanges and use money raised from the public to buy real estate.

A REIT can be set up by a developer or any independent fund manager. The minimum investment to be made is Rs. 2 lakh. And if the REIT pays out 90% of its distributable income to investors, it gets a tax exemption. However, those who get the dividends are liable to pay income tax.

The civil aviation ministry has asked Air India to consider this option to reduce its debt. The airline has an 18% share of the domestic market and a 17% share of the international one, and is in the midst of a Rs.30,000 crore equity infusion by the government that is expected to turn around its fortunes by 2021.

There is no clarity on how much the airline plans to raise through its REIT, a MINT report said. If Air India goes ahead with its plans, it will create among the first REITs in India, after the Modi-headed government allowed the creation of such entities in July.

India’s capital market regulator, the Securities and Exchange Board of India (SEBI), too has recently approved final regulations for REITs, although these are yet to be notified.

REITs may provide a new source of funds to Indian firms with large land banks, helping them reduce debt, and by 2020, some $20 billion worth of property and land could be held through REITs, according to an estimate by property broker Cushman and Wakefield.

 

“A REIT offers a regular return on investment and it also captures upside on the appreciation in the value of underlying property. Most of the other instruments either offer regular return (debt securities) or only upside (equity/equity-linked securities),” said Bhairav Dalal, associate director, PwC India.

Villas In The Sky-line of Bangalore

Chennai: Cushman and Wakefield, the global property services consulting firm has announced that it has been appointed as exclusive marketing partners by Equinox Realty, the real estate arm of Essar Group, for Villas In The Sky range of apartments at Water’s Edge in Hebbal, Bangalore. 

These super premium homes christened ‘Villas In The Sky’ are luxury four bedroom apartments with study that come with exclusive features such as a private elevator, lap pool and Jacuzzi, raising the luxury quotient.

Situated in a 40-storeyed-tower, each of the 4995 sq.ft. apartment offers residents a truly world class lifestyle, complete with an exclusive concierge and home support service. The sprawling apartments have their own private study, provision for a bar and home automation system. 

Each apartment is open on three sides and offers a breath taking panoramic view of the Nagavara Lake and surrounding cityscape.

Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield said, “Bangalore is a promising destination for both buyers and investors alike for making mid to long term real estate investments. The city has witnessed an increase in demand for high-end properties, thereby witnessing significant capital appreciation for quality units. The Water edge Project is one such project that offers international amenities for discerning home buyers and given its location can provide promising returns to an investor.”

Sanjay further added, “C&W strives to provide best in class real estate solutions to our clients, going beyond expectations using our experience and market knowledge. In this assignment, C&W hopes to take on a strategic role through focused and result oriented marketing services which will help our client realize the full potential of their portfolio. We appreciate the opportunity to partner with Equinox Realty, as it would give us another significant opportunity to showcase our Project Marketing services in the residential market.

Cherag Ramakrishnan, Head of Equinox Realty, said “‘VillasIn The Sky’ are residences created for those who seek that little extra in terms of luxury and lifestyle. They have been designed to give the feeling of exclusiveness and cater to a refined taste for fine living. We have appointed Cushman & Wakefield as marketing partners for these residences as we feel they have right clientele, reach and experience to efficiently market this product in the luxury segment. We are confident that this association will be a mutually beneficial one.”

Highlights of the Villas in the Sky:

·         Private elevator opening into the apartment

·         A 20 feet long lap swimming pool

·         Indoor Jacuzzi

·         Private study

·         Home automation system with control for lights, security, curtain control, climate control etc.

·         Exclusive concierge and home support services

Water’s Edge features five 40 storeyed towers, opposite the Nagavara Lake and is currently under construction. It is estimated for completion in phases during 2016-17.  Hebbal is serving as the new address for the upper crust offering a breath taking lake side scenery and creating an ambience of comfort and a tranquilizing experience.

Praveen Singla to head Debt Finance, Capital Markets at Cushman & Wakefield

Chennai: Cushman & Wakefield (C&W), a global real estate consultancy today announced the appointment of Praveen Singla as the National Head for Debt Financing Services, as part of its Capital Markets division.

Praveen is a highly accomplished banking professional with debt a focus on corporate bank and project financing, with close to 15 years of experiences, a release said, adding, Praveen will focus on expanding and building the company’s capabilities in this specialized financial service domain and contribute  towards enhancing the company’s strength in the capital markets vertical and debt services segment.

The Debt Financing Services will provide services that will include Debt Syndication, Placement of Treasury Products (Private Placement), Acquisition Financing, Refinancing, Special Situations and High Yield Financing and Trade Credit Advisory. The Debt Financing team will be complementing Capital Markets Group, which currently provides services such as structured equity and debt services, capital advisory including equity raising for pooled funds and programmatic club and joint venture transactions and development project funding.

Commenting on the recent appointment, Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield stated that, “Praveen’s appointment is a crucial step towards establishing  the new service scope of Debt Financing for C&W. Debt financing at low cost is a key element of Corporate and Developers capital needs engaged in real estate activities. C&W remains committed and well equipped to service our clients with experienced professionals like Praveen Singla and his team.”

Sanjay further added that, “Praveen brings with him in-depth experience in capital markets with expertise in Debt Syndication and structuring, Financial Modeling, Risk Analysis, Assessment and Pricing. With significant experience in lender and investor relationship in the Indian Market, we are confident that under Praveen’s leadership, the company will be able to cater to the financial needs of our clients at its best.”

Demand for office space to go up to 30 mn sq ft in 2013: DTZ

Mumbai: The demand for office space is likely to increase to 30.5 million sq ft this year, global real estate adviser DTZ said, though another acclaimed real estate consultant Cushman & Wakefield has painted a grim picture on office space absorption index for the year’s first quarter.

“Fears of downside risks for the global economy have started to fade, which combined with local economic policy amendments including the opening of 51 per cent FDI in multi- brand retail, climb-down of repo rates by the Reserve Bank of India (RBI) and stronger economic outlook, have resulted in improved market sentiment,” DTZ India CEO Anshul Jain said.

 “Consequently, demand for office space is expected to increase and reach to around 30.5 million sq ft this year, representing an increase of nearly 12 per cent year-on-year,” Jain said. 

Cushman & Wakefield in their recent report said that there has been a huge 37 per cent drop in office absorption rate in India in the first quarter of 2013 as compared to the corresponding period last year with Bengaluru and Chennai seeing a significant decline in net absorption levels followed by Mumbai and Hyderabad.

Brushing aside the negative sentiments, Jain said, “Further, companies which had stalled their expansion plans due to poor market sentiment, are expected to recommence the process in the near future as they move out of the ’wait-and-see’ phase observed over the past year,” adding, “Office demand in FY14 is therefore expected to be largely driven by business expansion and we expect to see higher levels of space absorption in 2013 than 2012.”

“Rentals are expected to be stable in the near future. At the same time, it is anticipated that rents will increase over the next 12-24 months. This will drive the leasing decision in the short-term,” he said.

Of the estimated 30.5 million sq ft, the IT sector is estimated to take up around 15 million sq ft of space, compared to only 12 million sq ft in 2012, an increase of 24 per cent year-on-year.

According to DTZ, the demand for office space from the BFSI sector will also rise significantly primarily after the passage of the Banking (Amendment) Bill.

“This bill is aimed at attracting foreign investment and paves way for the RBI to issue new banking licenses to the private sector. This move will further increase demand for commercial office space from the BFSI sector and therefore increase its proportionate share of demand in the coming years,” Jain added.

Slow start to 2013, office absorption drops by 37%

Chennai: It seems the downward trend in the commercial real estate in India is continuing into 2013 and if one goes by the latest report from Cushman & Wakefield, the leading Global Real Estate consultants, there has been a huge 37 per cent drop in office absorption rate in India in the first quarter of 2013 as compared to the corresponding period last year.

Bengaluru and Chennai saw a significant decline in net absorption levels followed by Mumbai and Hyderabad, the report pointed out. 

The overall leasing activity in Chennai in the first quarter remained slow in the wake of cautious expansion plan of occupiers. A few companies relocating to other micro markets and overall net absorption was recorded at only 131,412 sf, a drop of around 80% from Q1 2012. IT/BPO sector continued to be the largest contributor in absorption followed by the BFSI sector. The first quarter witnessed a total supply of approximately 950,000 sf, registering a decline of 61% over 1Q 2012.  

The overall vacancy level in Chennai has witnessed a marginal increase of 0.3% and was 15.9% from the previous quarter. The rental values across the city exhibited a stable trend. However, the weighted average rentals in the peripheral-GST micro market showed decline as leasing activity was slow because occupiers preferred to be located in the suburban-Guindy locality. 

Consequently, Guindy has registered a rise in weighted average rentals with fresh supply entering the market at higher rentals. Slowdown in leasing activity is expected to continue in the second quarter of 2013 due to prevailing cautious expansion sentiments. Going forward, rentals are expected to register a stable trend, the report noted. 

 IT/ BPO driven markets of Chennai and Hyderabad have registered a decline in leasing activities in Q1 2013 over the same period last year due to the cautious approach. 

The total net absorption across top eight cities was noted at 3.6 million square feet (msf) in the first quarter of 2013 which denoted a decline of 37% compared to the same quarter last year. However, fresh supply registered an increase of 18% y-o-y and was recorded at 7.9 msf. Vacancy rates at the end of Q1 2013 were noted at 19.6%, representing a rise of 3% from the same quarter last year. Highest net absorption was noted in Pune that also saw an exceptional increase of 30% compared to Q1 2012.

Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield, said “As predicted, the first half of 2013 was no different from that in 2012 which recorded slow activity levels.  Corporate are cautious, the economic slowdown in global markets continues to affect global markets. Added to this, are the domestic sentiments, which are affected by active political conundrum in the run up to the 2014 general elections.”

“Further, the Union Budget for 2013-14 had very little for corporates on the whole, especially the IT/ITeS and BFSI sector, which has put many companies into watchful  mode. However, second half of 2013 is expected to witness an increase in activity which is expected to match the activity levels of 2012,” he said. 

City	Supply Q 1 2012	Supply Q 1 2013	% Age Change in Supply  (Q1 2012 / Q1 2013)	Absorption Q1 2012	Absorption Q1 2013	% Age Change in absorption (Q1 2012 / Q1 2013)	Vacancy Q1 2013
Ahmedabad	0	0.95	NA	0.10	0.19	90%	15.2%
Bengaluru	1.06	1.58	49%	1.35	0.23	-83%	14.7%
Chennai	0.95	0.37	-61%	0.65	0.13	-80%	15.9%
Hyderabad	0.49	0.018	-96%	0.63	0.45	-29%	19.2%
Kolkata	0.57	0.71	25%	0.28	0.17	-39%	22.8%
Mumbai	1.43	1.65	15%	1.29	0.81	-38%	20.10%
NCR	1.61	1.98	23%	0.77	0.77	0%	28.30%
Pune	0.58	0.64	9%	0.65	0.84	30%	22.10%
TOTAL	6.7	7.9	18%	5.7	3.6	-37%	19.64%

Source: Cushman & Wakefield Research

  “Given the current subdued economic conditions, most occupiers are cautious and have been concentrating on how to leverage current office supply to their advantage and reduce real estate cost from medium to long term perspective while simultaneously focusing on increasing the efficiency of their existing office spaces, alternate workplace strategy with remote or flexible work stations or hours,” Sanjay further said.

 

Companies that were relocated were forced to take either the same size as their previous accommodation or marginally increase the size thus contributing very little to net absorption level. Many corporate houses expressed interest in leasing larger space, but have postponed their decision for the later part of the year. Thus going forward, the transaction activities are expected to pick up with some bigger requirements anticipated to get finalized, he concluded.