FDI to develop township in Bangalore
Thursday, May 17, 2007
Even as local
real estate developers are mulling greener pastures in metros outside the state, Bangalore continues to be a star attraction for FDI-promoted township developers.
Fire Capital Fund Pvt Ltd, a global venture capital fund, plans to enter Bangalore in the next three months with an equity investment of $ 35 million on integrated township project near Whitefield in Bangalore. Fire Capital Fund Pvt Ltd plans to invest up to $ 250 million to develop integrated townships in 10 cities in India. By the year-end, the firm would also raise $ 500 million for dedicated real estate and infrastructure component development.
They made their first investment in Indore-based M Jhaveri Group on the 137-acre upcoming township Silver Springs being developed. It is Madhya Pradesh’s first
Foreign Direct Investment (FDI) promoted integrated township, whereas in Bangalore it is one of the top five FDIs. They have also invested in the range of $10 million each for townships in Chennai and primarily tier II cities such as Nagpur, Bhubaneshwar, Indore, Jaipur and Dehradun.
The 500-acre township in Bangalore will usher international life style in the city. The township will be a new benchmark in quality development and people can experience a life style comparable to the best in the world. With Fire Capital as an active participant in development of the township, they assure timely delivery, quality construction, green, open township and the highest standards of maintenance to the customer.
The Bangalore township will have a shopping mall, an office with world-class facilities, hotel, and over 3,000 to 3,500 residential units including town houses, villas and apartments. To enhance the quality of living, the project will also have a club, health care facilities, a school, creche and places of worship. The project brings in best practices in design and master planning through a leading international architectural firm.
The township has been designed keeping in mind Bangalore’s potential for IT sector growth. The Bangalore township is expected to contribute greatly to creating quality urban infrastructure, generating revenue, fuelling the growth of IT and acting as a catalyst to attract FDI in the state, besides creating jobs for many.
The
Bangalore project will be shortly announced with the completion of land assembly and convergence sale. The project will mainly be targeting people dreaming about owning a house near work place with all needed facilities.
Labels: Bangalore Real Estate
Author: Rakesh Malhotra » Comments:
Oversupply to bring down commercial rentals
Thursday, May 10, 2007
The oversupply discussed in the last post is probably going to benefit in on way at least and that is a drop in
commercial real estate (especially Grade A office space) rates upto 15%. The primary reason being oversupply. Pune leads the race in commercial realty with oversupply of 208% by the end of 2007, followed closely by Chennai at 200%. While Kolkata is expected to be 66% surplus, Bangalore will have 38% more supply than demand, and Hyderabad, 33%. In Delhi NCR, it is expected to be at 20%, among the lowest. Mumbai is the only exception with the demand projected to exceed supply by 8%, according to global property advisers DTZ.
Grade A leasehold office space across most cities is seeing the beginning of an oversupply situation that will continue in the short to medium-term, even though demand continues to be strong. Property experts opine that the first casualty would be rentals which could drop as much as 15% in the next few months.
“Our city-level demand supply analysis, seen in conjunction with the macro-economic fundamentals, clearly indicates that office space rentals are likely to hit a plateau in the next six to twelve months. Barring a few exceptions (primarily the central business districts), the oversupply situation will lead to a correction in office rental values. Or, very simply, this correction in Grade A office space rental values will not be driven by a lack of demand but due to an oversupply build-up,” says Ankur Srivastava, managing director, DTZ India.
For instance, the estimated supply of office space in 2007 in Delhi NCR is expected to be around 15.9 million sq ft (as against 10.6 million sq ft in 2006) with the estimated absorption being pegged at 13.2 million sq ft, resulting in a 20% excess supply. Bangalore is estimated to have 18.3 million sq ft of commercial space in 2007 (as against 12 million sq ft in 2006) with the absorption estimated at 13.3 million sq ft. This works out to 38% of excess supply in the city this year.
Chennai is expected to have the largest supply of commercial space this year at 19.5 million sq ft (which was only 5.3 million sq ft in 2006) with the estimated absorption pegged at only 6.5 million sq ft, resulting in an excess supply of a whopping 200%. Same is the case with Pune, which is estimated to have a supply to the tune of 17.9 million sq ft while demand could be just 5.8 million sq ft.
Kolkata with an estimated supply of 8.3 million sq ft (3.9 million sq ft in 2006) and an absorption of 5 million sq ft will have an excess of 66%. Hyderabad, on the other hand, is estimated to have a supply of 6.1 million sq ft (3.8 million sq ft in 2006) and an absorption of 4.6 million sq ft, resulting in an excess of 33%.
Mumbai is the only city, which is expected to be in the negative as far as oversupply is concerned. With its estimated supply pegged at 6.9 million sq ft (6.4 million sq ft in 2006), the absorption is estimated at 7.5 million sq ft.
Author: Rakesh Malhotra » Comments:
Monday, May 07, 2007
Excess supply to hit real estate
Commercial real estate market, which has been witnessing a bull run over last couple of years, will soon face a bearish phase. Oversupply of office space in most of the grade A cities in last six to 12 months, may result in a fall in rental and capital values.
According to a report by global real estate consultancy firm DTZ, ctites like Delhi, Bangalore, Chennai, Pune, Kolkata, and Hyderabad, except Mumbai will have oversupply of 20% to 200% of estimated demand in 2007. Mumbai will continue to have supply shortage.
The city-level demand-supply analysis in conjunction with the economic fundamentals shows office space rentals are likely to hit a plateau in next six to 12 months. Correction in rental values will not be driven by lack of demand but due to oversupply. The leasehold office space markets are currently at an all time high — both in terms of quantum of space leased and rents. Lease rentals in NCR has gone up by over 200% in the last two years.
The study finds that rising capital and rental values and easy availability of capital have led to start of large number of projects at major locations. The increased pace of supply of quality commercial real estate is likely to outstrip demand in the short-to-medium term. It is expected that the oversupply position will reduce in long term as demand grows and supply tapers off. So, stakeholders like occupiers, investors, developers and intermediaries will formulate their strategies accordingly.
There are various factors that will define the degree and timing of this rental value correction. The threshold for this correction has been brought closer by the two recent interest rate hikes in the first three months of 2007. Degree of Inflation and consequent measures taken by RBI in the money market will play an important role in the real estate sector.
RBI tried to stem speculative interest and reduce inflationary pressures in the economy by curtailing availability of capital and increasing the interest rates.
Author: Rakesh Malhotra » Comments:
Wednesday, May 02, 2007
Sebi chief unfazed by concern real-estate IPOs will slacken
India’s market regulator is serious about clamping down on manipulation by real-estate companies inflating their land banks to boost value and is unfazed by concerns that new disclosure norms will keep realty companies from tapping the market.
“I believe if that is the case then they should not be there in the first place,” said M. Damodaran, chairman of the Securities and Exchange Board of India (Sebi), while addressing a meeting organized by the Tamil Nadu Investors’ Association.
Sebi recently tightened disclosure norms for real-estate companies that want to raise money by selling shares. As per the norms, companies are allowed only to show land that they own, not the land they intend to buy in the future. Moreover, the valuations have to be based on the current market value and not on future projections.
Damodaran spoke of the extent to which land banks were manipulated and said the market regulator would not allow the practise to continue. Some real-estate companies are inflating landbank values ahead of a public offer of shares by temporarily acquiring land from farmers for a fee and then returning the land to them after the public issue, Damodaran said.
“I have seen documents shown to me by farmers which show that a certain plot of land has been sold to a real-estate company and a subsequent document simultaneously executed for a subsequent date which shows that it is sold back to that person,” he said.
He said the farmers are paid a “little money” for signing the documents. “The first set of documents is what is made available when you build up the landbank and having raised your money, the second set of documents becomes effective. That is, on non-existent landbank you would have parted with money,” Damodaran said.
As much as Rs4,000 crore out of a total of Rs20,000 crore raised through share issuances last year was by real-estate developers. That pace has slowed so far this year as several initial public offerings, including that of Purvankara Projects Ltd, DLF Ltd and Omaxe Ltd, have yet to be cleared by the stock market regulator.
Author: Rakesh Malhotra » Comments:
Tuesday, May 01, 2007
Dubai real estate group launches 1st residential project in India
The first freehold real estate developer in Dubai to receive an ISO 9001: 2000 certification, has recently launched its first residential project, Jasmine Court in Chennai, India, representing the start of the company’s Dh11 billion investment foray into the Tamil Nadu region.
“We are very excited about Jasmine Court as we have already achieved major success with our two residential developments Binny Crescent and The Gardens in nearby Bangalore. Chennai is a great place for property investment at the moment as it is the third largest commercial and industrial centre in India and it attracts a large number of professional residents and also many tourists who come to visit the numerous sporting venues in the city,” said Abid A. Junaid, Executive Director, ETA Star.
Construction will commence within the next few months on the Dh800 million Jasmine Court residential development, offering investors mixed-size apartments distributed over 4.4 acres of landscaped property near the Chennai International Airport, with facilities including a children’s play area, a swimming pool, a gymnasium and basketball court. ETA Star has also recently announced its plans to invest more than Dh11 billion on five additional projects in Tamil Nadu, including an exclusive 1,200 acre integrated Township in Sriperumbudur.
Author: Rakesh Malhotra » Comments:
