Tag Archives: Indian property market news

Piramal Finance lends INR 1100 crore to Embassy Group

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News Point: Piramal Enterprises Limited through its subsidiary Piramal Finance Limited (PFL) has financed the Embassy Group for an amount of  INR 1100 crore.

Piramal Fund Management, Lodha Group, Private Equity in Indian real estate, PE Fund in real estate, India real estate news, Indian property news, NRI investment, Track2RealtyPiramal funding to Embassy Group has been done sequentially across both residential and commercial projects in Bangalore, Chennai and Hyderabad over a span of the last six months.

PFL first funded INR 360 crore towards Embassy Residences in Chennai – a premium residential project spread over 25 acres with 0.3 million sq. ft. of built up area. This has been followed up with an investment in Phoenix-Embassy which is a joint venture between Embassy and Phoenix Group of Hyderabad.

The JV is developing 1.5 million sq. ft. of grade-A commercial space in the financial district of Hyderabad with a potential to develop a further 4 million sq ft. Subsequently, PFL has provided INR 650 crore of growth capital to the Embassy Group in Bangalore.

Khushru Jijina, Managing Director, Piramal Finance Limited said, “We are pleased to have extended our relationship with the Embassy Group and look forward to a long and mutually beneficial association. I have always admired Jitu Virwani’s vision, track record and execution capabilities and we are happy to provide them with customized financial solutions as they scale up their presence across both residential and commercial. ”

Jitu Virwani, Chairman and Managing Director, Embassy Group said, “We are delighted to be working closely with a large diversified conglomerate like the Piramal Group who is known for their structuring capabilities and quick turnaround time. We look forward to leveraging their capabilities as we partner with them on our growth capital requirements going forward.”

The Embassy Group has already delivered 30 million sq. ft. of marquee commercial office space and 6 million sq. ft. of premium residential developments. The Group has a pipeline of 17 million sq. ft. of commercial developments across Bangalore, Hyderabad and Chennai.

Diary of a real estate journalist

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Track2Realty Exclusive

Bottom Line: It is challenging to be an objective real estate journalist when the business environment and media realities are constantly forcing to create a mutual appreciation club.  

Ravi Sinha, CEO & Managing Editor Track2Media Research Pvt Ltd, Track2Realty, Investment Magnet Report, Indian best housing projects, NRI investment in Indian property, Indian real estate market, Indian property market, Indian real estate news, Indian property magazinesIt was 9 AM in the morning and the repeat ring of call bell forced me to wake up. It is not easy for a journalist to leave bed so early after the occupational hazards of late night assignments. I opened the door with visible anger on my face, only to find a smiling PR guy whose smile actually made me even more angry.

But wait! The real anger was yet to come when he offered me a packet sent by his client – a builder. It was not Holi or Diwali; not even New Year or my birthday that the whole world nowadays gets to know, thanks to the necessary social addiction called Facebook.

“What is that?” I asked. It was…hold your breath! A gift that an ordinary journalist like me can not afford with hard earned money – an expensive Rolex watch. “Would like to speak to your client,” I said calmly.  This has been a prominent real estate developer and I had only last week done a negative review of one of his luxury property. My expose against his buyers’ grievances had also not gone down well with him only recently. And hence the gift was a surprise, if not shock, to me.

I asked the builder as to what prompted him to this largesse. Pat comes the reply, “a very small token of friendship.” I wondered when did we become friends. However, I said politely but sarcastically, “It will take time before we become friends.” Smart answer over the other side of the phone says “please keep it as a token of love from your younger brother. Had got one more piece for another journalist friend and so…” Younger brother? The man is at least 20 years older than me.

At this point of time I wanted to cut short the conversation. And hence a curt “No” was the best that I could think of.  “I think you should test the waters before throwing your cards boss. You can’t throw wild cards everywhere.” A brief pause over the phone at the other end and then a breaking voice, “Ok. Sorry.”

This is not a one-off incident when a real estate journalist faces the dilemma of not accepting the beyond one’s purchasing capacity expensive gift from a builder against whom one is writing on a routine basis.

It is not that I am not conscious of the media reality in this sector where even the press conferences are organized to dole out expensive gifts and even cash gift vouchers. Hence, it is not easy to be a journalist if you want to practice your profession with certain amount of dignity and professional pride. The fellow journalists do not want to be seen with you. How come you are not having tribal instincts while being part of the same tribe is something that is often a question in their eyes.

Dilemma of journalism 

  • If you don’t have a price tag, you are of no use in an eco system where survival of the most corrupt is the mantra
  • From tempting one’s personal integrity to marketing pressures, it is not easy being an objective real estate journalist
  • You are out of the journalists’ tribe if you don’t have tribal instinct to accept gifts and bribe
  • For a builder it is the price tag that alone defines the value of mutual appreciation club with the journalist 

Once the marketing head of a leading Gurgaon-based developer told me, “You don’t know my boss. He can change your life if he likes you.” I kept wondering that in the last nearly two decades of my career when none of my editors could change my life how come a builder would do that. I nevertheless wanted to make a fund of it and hence asked, “You mean he will gift me a house?” “Well, if only you add value to us. He is always generous to people who are beneficial in general and journalists in particular,” said the man with certain level of inquisitive look in his eyes, as if judging whether I can be bought or not.

These are the instances where you are directly being approached with a price tag. Then there are other indirect pressures through the necessary survival mechanism of media – the marketing.

A Noida-based developer once asked the marketing guy that he is ready for a cover jacket of Track2Realty Brand X Report if only his company figures into Top 3 of the yearly brand rating. The marketing guy definitely thought he had made a great deal for the company. “Ask them to give this offer in writing,” I said knowing that the developer would be either smart enough to understand what I mean or else if he will make a fun of his brand. The developer proved to be smart. I am deliberately not using the word cunning.

A Mumbai-based builder told me that his PR agency has conveyed that I am very blunt journalist who does not entertain them. “Thank you,” I said with certain degree of pride, “I am very satisfied with my kind of identity. It adds to my credibility as an objective journalist. I might be blunt many a times but never pointless. I will be really ashamed the day anyone said that I can also be managed with or without a price tag.”

Another marketing head of a Noida-based developer where the CMD is known to take a moral high ground on industry issues and is a champion of developers’ cause, told the marketing team, “Ask your editor to call me if you want advertising business. Other editors come to us.” Such overt & covert messages not only tell me a lot about the lack of professional practices, forget best practices, in the sector but also lack of integrity on part of those editors who go for ego massage to these second and third rank hierarchy of builders.

“I know my PR team could not respond to your editor’s queries on time but then he should not have blasted the PR team,” said the brand custodian of a developer. Incidentally this brand custodian of Noida-based builder claims to have worked with one of the leading TV news channels in Delhi. “Excuse me! Your builder might have delayed the projects for 7-8 years as a matter of this chalta hai (its ok) attitude. But journalism does not give liberty to such delays for inexplicable reasons.” I can just wonder what kind of journalism this gentleman might have done in his television career.

I can understand the primitive human instinct of survival of the fittest. But as a real estate journalist I am yet to learn how to live with the modern reality of ‘survival of the most corrupt’. After having weathered pressures ranging from personal temptations to marketing pressures, I often think I am not fit to be a real estate journalist in today’s world of mutual appreciation club.

Names of respective builders have been withheld in this diary 

By: Ravi Sinha

 

RERA realities & concerns of homebuyers

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News Point: As the Real Estate Regulatory Authority (RERA) kick starts across the major property markets of India the homebuyers have many queries & concerns.

Homebuyer Confusion, Confused homebuyer, Homebuyers grievances, Homebuyers' legal options, India real estate news, Indian property market news, Track2Realty“Equal penalty for the delayed project to homebuyers to the extent of what builders charge in the wake of delay in payment is the most welcome beginning with RERA. I believe it creates an equitable justice in the property market and also forces the developers to finish projects on time,” says a jubilant Jayant Shah in Mumbai.

However, Shah is still not clear about many of the RERA compliances, including whether the delayed penalty is applicable to the existing under construction projects or not. And he is not alone to not have full information about the various clauses of RERA. But they are all happy that a welcome beginning has been made.

Rukshana Khan, another homebuyer, is confused to find many ongoing projects without the Occupation Certificate (OC) and the Completion Certificate (CC) still being advertised. She believes the market is still not clear as to what precisely to expect with the new set of rules.

“I was clarified by my property agent that my under construction project need not wait for registration to advertise. They can continue all their activities as usual. However, those projects for which application for registration is not made even by July 31 to the regulatory authority cannot market their projects,” says Rukshana.

Sumer Singh, a trader in Mumbai, has another query. He wants to know whether the regulator can send the homebuyers to jail if he defaults on payment. He feels such reports would deter a homebuyer like him to ever approach the regulator.

“I have read the newspaper reports that the regulator has the powers to penalize the homebuyers also in case of delay in payment. My worry is that such provisions can be grossly interpreted in favour of the developer, even if the consumer defies the regulator’s order due to financial duress,” worries Singh.

Concerned buyers

Whether there would be equal penalty on delays in current under construction projects

Till when the under construction advertisements without OC & CC will continue

Whether the homebuyers can be sent to jail for delay in payment

Whether regulator can force the government agencies to grant approval on time

Industry is nevertheless clear that such apprehensions are just teething problems. Jaxay Shah, President, CREDAI maintains that even though most states have not been able to implement it immediately and are in the process of doing so, yet both consumers and developers need to look at it optimistically. There will be teething problems initially, but as the regulatory mechanism sets in place, we will see a smoother transition into the new administration. For the moment, avoid any hasty conclusions and false assumptions for they will only serve as a hindrance. Engaging and diligently moving towards the common goal of building a professional, accountable, transparent and innovative sector should be the objective of all stakeholders.

“There has been a long standing call for a regulation like RERA, both from the industry as well as the consumers. The purpose of such a regulation would be to build equity amongst the stakeholders, create accountability, promote delivery driven project execution and facilitate financial and administrative transparency. The present RERA requirements fulfill all these needs. Though the compliance burden is heavy, the Act has provided the right impetus on ensuring that all due diligence which any and all consumers may require are fulfilled. This will go a long way in restoring consumer faith in the real estate sector,” says Shah.

That said, the discerning homebuyers in the city are convinced that the RERA will lead to a weak start for Mumbai’s property market. The property registration data ahead of RERA seem to support these apprehensions. Facts speak for themselves. In January-March period this year, there were 14,239 registrations recorded, according to data sourced from Director General of Registrations, Mumbai. This is over 21% fall compared to January-March period of 2016, and again the lowest in six years.

The registrations touched a six-year low for two months in a row in November and December last year. January and February numbers were lower than the levels seen in November and December. Due to year end rush to register properties and also to avoid paying long term capital gains tax, March numbers are traditionally higher. Industry experts say that the weakness in residential real estate market is there because the consumer confidence is yet to be restored. Once RERA restores that confidence the market will bounce back. 

Moving forward, the moot point is whether the builders would decide to postpone their new launches keeping RERA in mind to avoid mid way issues. Within the built environment of real estate it is increasingly being questioned as to whether penalising builders for delays in the projects is justified given they rely on so many external factors. At one point government is coming up with consumer friendly RERA 2017 on the other hand government does not have any system or mechanism to give time bound permission to real estate sector developer, then how government will be successful in implementing the real estate.

Of course, RERA protects the interests of homebuyers and would drive out unscrupulous builders from the realty market. RERA is a landmark legislation that is about to change real estate into a more customer centric industry. It focuses on increasing accountability of the builders and their agents and on boosting buyer confidence. But till the time there is more clarity every stakeholder has own set of apprehensions.  

By: Ravi Sinha

Virtuous Retail acquires North Country mall for 700 crores

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News Point: The aggressive growth strategy of the retail chain also plans to invest in rebranding and expansion.

North Country Mall Chandigarh, Virtuous Retail South Asia,  Retail in Punjab, India real estate news, Indian property market, India housing newsVirtuous Retail South Asia has acquired the 2 million sq ft North Country Mall from Sun Apollo/Gumberg for INR 700 crores (USD 108 MM), including paying down debt. With this acquisition, VRSA establishes its presence in North India, adding to its existing award winning portfolio of community-centric centers VR Surat and VR Bangalore, and the 2 million sq ft. VR Chennai slated to open in Q4 2017.

Coming within 6 months of creation of the VRSA platform in late 2016, the acquisition is in line with the company’s rapid, nation-wide, expansion strategy through both ground up development and acquisition of existing, high quality assets.  VRSA’s India retail portfolio now stands at 5.5 Million sq ft.

Commenting on the acquisition, Sid Yog, Chairman of the Board, VRSA, said, “We are pleased to add a high quality acquisition to our award winning portfolio of flagship centers in India. North Country Mall offers an exciting opportunity to reformat and reposition a well-built mall in a great location, into a community centric VR flagship for the residents of the Chandigarh Capital region, and into a regional lifestyle destination for residents of surrounding cities like Ludhiana and Jalandhar. The acquisition expands our footprint into North India, has numerous portfolio synergies, and is value accretive to our stakeholders, including retail partners and investors.”

Rohit George, Executive Managing Director, VRSA, added, “This acquisition immediately adds 1 Million sqft. of high quality retail space to our existing leasable portfolio. We look forward to working with existing and new retail partners, in offering a platform worthy of their brands, amplified by the operating and programming quality they expect at a VR Center. This acquisition, combined with VR Chennai which is in final lease up stage, also enables VRSA to simultaneously offer retailers, two new, exciting retail developments of scale, in key metropolitan markets, at a time when quality retail space is scarce and the economy is poised to grow strongly.”

North Country Mall, located in the Chandigarh Capital Region, is one of the largest operating malls in Punjab. Built on a sprawling 22 acres on the arterial NH 21, it benefits from a great location in the upmarket and high income residential suburb of Mohali, also known for its iconic Cricket Stadium and the Indian School of Business campus.

A leasable area of 1 million sqft., is anchored by top national and international brands like H&M, Zara, PVR, Forever 21, Westside, Lifestyle, Central & Home Center, across key retail and lifestyle segments, and a regional Reliance Market. Additional leasing and further development potential of 600,000 sq ft, will see new retail brands, F&B formats, and entertainment facilities added. VRSA will also invest in rebranding the mall as a VR flagship center.

Cushman & Wakefield Appoints Kaustuv Roy as MD-New Business Acquisition

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Bottom Line: Appointment marks Kaustuv Roy’s return to Cushman & Wakefield.

C&W Logo, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyCushman & Wakefield has appointed Kaustuv Roy as its Managing Director for New Business Acquisition in India. Kaustuv will be responsible for driving the firm’s business by tapping into the emerging real estate business opportunities from across key regions, especially focused on the India-US corridor.

He will also look at expansion opportunities for Indian conglomerate in foreign markets. He will be engaging with various stakeholders in identifying the opportunities for global companies to augment their real estate portfolio.

India’s potential as a global business destination remains positive. The GDP outlook is pegged at 7.7% in 2018 -19, highest growth rate in the world. It has remained resilient despite disruptive events of 2016 Brexit and election of Donald Trump as President of the USA and currency demonetization in India.

This was demonstrated by the steady net absorption of office space (31 msf), while private equity investment saw its best year (US$ 6 Bn approx.). With the global GDP also looking up at an estimate of 4% by 2018, India’s role in this growth remains crucial. It will continue to be a big destination for cross border business and will be an attractive market for investment for global businesses.

Cushman & Wakefield’s is perfectly poised for this growth phase. The company has the depth of experience and leadership strength in India to provide best in class solutions to our clients. From entry to growth strategies, to investment advisory and transactions, Cushman & Wakefield provides for seamless integration of its services to create value for our clients.

Anshul Jain, Managing Director, India said, “Kaustuv’s appointment is an important step for our India operations that is moving forward at an aggressive pace. His experience as a real estate professional is a significant addition to our formidable leadership team. His role in creating business opportunity from overseas markets will give us a competitive advantage to further solidify our position in the Indian real estate industry. Kaustuv is a very well respected professional within the real estate fraternity, which complements the company’s brand.”

Speaking about his appointment Kaustuv Roy, Managing Director, New Business Acquisition said, “Cushman & Wakefield is globally known for innovation, commitment, integrity and partnership aimed at creating value for our clients’ real estate. Our brand equity and India’s global economic position will be a key catalyst for global companies to look at Indian market. Similarly Indian companies too are looking at globalisation. Our team and experience puts us in a unique position to partner with such companies. I look forward to working with a group of very talented and dedicated professionals to further fuel the growth of India business.”

Kaustuv has held multiple leadership roles during his 18-year tenure with Cushman & Wakefield from 1998 to 2016. Most significantly as the firm’s Head of International Desk, Asia Pacific based in New York from 2012 until 2015.

Under his leadership, Cushman & Wakefield built a successful cross-border business between the US and India, a legacy he will now build on to usher in accelerated growth. He also served as the firm’s Country Manager for Philippines.

An industry leader, Kaustuv brings over two decades of real estate industry experience. Kaustuv’s appointment as Managing Director for New Business growth in India marks his return to Cushman & Wakefield.

Sobha launches luxurious Sobha City in Delhi-NCR

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News Point: will launch its first luxury apartment project, Sobha City in Delhi-NCR tomorrow, Wednesday, June 29th, 2016.

Sobha City Delhi-NCR, Sobha Limited, JC Sharma, PNC Menon, Ravi Menon, Luxury real estate in Delhi-NCR, India real estate news, Indian property market news, NRI investment in India, Track2Realty, Home search  Sobha City is one of the largest group housing projects in Gurgaon which will offer best-in-class living experience to the customers. Located in sector 108 of Gurgaon, the project is much sought-after due to its close proximity to Delhi and Indira Gandhi International Airport.

Sprawled over 39 acres, Sobha City comprises of 1700 apartments across 22 towers with four units on each floor. The project offers 2BHK and 3BHK apartments that range from 1380 sq. ft. to 2342 sq. ft. Each unit is functionally planned with well-designed layouts and optimally-sized living spaces. With 85 percent open spaces, it offers an abundance of amenities along with magnificent view of the surroundings.

Speaking on the eve of the occasion, , VC & MD, Sobha Limited, said: “Over the years, Gurgaon has developed and transformed into a leading financial and industrial hub in India. It not only boasts a presence of over 250 Fortune 500 companies, but also caters to a population having third highest per capita income in the country. This has augmented the demand for luxury homes that meets the aspirations of people in the Delhi-NCR region. Additionally, Gurgaon being one of the fastest growing realty markets, offers high capital appreciation, making it a lucrative investment option. Sobha City, aims to fulfil the desires of quality conscious and value discerning customers. More importantly, the project underscores promise of international quality luxury, style and comfortable living.”

Jagadish Nangineni, Regional Head – NCR, Sobha Limited said, “Sobha City, Gurgaon is the first luxury apartment project from the house of Sobha. With this launch, we will have a product mix that will offer homes of all sizes in NCR region – 2 & 3 BHK apartments in Sobha City and villas at International City. Sobha City has been meticulously planned keeping customer’s core requirements in mind for a luxurious community living – both in terms of the apartment and amenities. These apartments are designed with a good balance of functionality, aesthetics and luxury. The amenities are the best in class – open grounds, parks, large water bodies and two clubhouses. Sobha City is going to be a landmark community development owing to its scale of development, shape of the land and location which is on the edge of Delhi.”

The common amenities at Sobha City include a large cricket ground having 45m radius, a lakelet, two oval club houses measuring 40,000 sq.ft with multipurpose halls, cafe, entertainment room, children’s play area, library and cards room.

In addition, it also offers multiple lawns and parks, specially designed camping grounds, paved pathways, swimming pool, cricket stadium, green landscaped outfield with more than a kilometre long walking and biking trail, designer landscaped greens and other amenities that match the pace and standard of living of today’s smart customers.

Resilient Chennai rising to chart a new growth trajectory: JLL

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JLL report finds Chennai market rising to new high.

Chennai City, Chennai real estate market, Chennai property, India real estate news, Indian property market news, Track2Realty, NRI investment in ChennaiChennai’s is amongst those Indian metros which has more than one economic growth driver, says JLL market report. Interestingly Chennai’s economy has a broad industrial base with the port along with IT/ITES and BFSI sectors contributing to its growth.

Manufacturing sector in Chennai mostly includes the automobile industry, computer, technology and hardware manufacturing. It is known as the Detroit of Asia as it accounts for over 60% of the country’s automobile exports.

In addition to this Chennai’s economic development has been closely tied to its port and transport infrastructure. Showing their faith in India’s economic growth after a long time after the global financial crisis the corporate occupiers also have been in an expansion mode Chennai.

Companies especially in the sectors of e-commerce, telecom and health care have expanded strongly and drove the demand for office space.

Lately we have seen a shift in global and Indian economy towards technology driven enterprises out of which several cities which are a hot bed to such activities emerged as big commercial centres.

Chennai continues to be a preferred growth market for BFSI. Scope Intl, Citibank, BNP Paribas, BNYM & Yes Bank transacted over 1.2 million sq ft in 2015.  Although the contribution of space take-up by start-up firms has not been very significant they were seen to pick up pace and leased over 0.1 mn sq ft of space in 2015.

Private Equity investments have also seen a tremendous growth in the country. Income yielding projects were a major attraction for Private Equity Investments and Chennai stood third in the country by attracting 14% of the share of these investments.

Market highlights

  • Housing sales remained stable in 2015 and was around 20, 500 units which were close to sales reported in 2014.
  • Chennai witnessed a 62% drop in launch of units in 2015 as compared with 2014. This indicates that developers have been cautious to launch projects and have check on the piling inventory.
  • Absorption rate increased to 31.3% in 2015 from about 26.6% in 2014. Even though there was a decrease in launches this year the sales rate showed a rise. This resulted in the much needed sales of the piling unsold inventory and helped in the correction of the market. Chennai stands last amongst the top four metros in India in terms of to be sold inventory.
  • Rents stagnate across all sub markets. Rental values and Capital values remained stable across all sub-markets over the past year.
  • Most of the sales were registered in projects in Southern Suburbs followed by Western Suburbs and Northern suburbs. Increasing activity in office space in these location are attracting buyers towards these sub-markets.

Outlook

As the state government went all out to bring investments by conducting a Investors meet, heightened economic activity can be expected to further support the residential market.

Developer’s initiatives like offering attractive deal terms and schemes coupled with the lowering of interest rates by RBI have given the fence sitters a much-needed inspiration.

The improvement in the overall business scenario will prompt the developers to build fresh supply in order to meet with the growing demand.

Key demand drivers

  • Senior Living: Gone are the days where only youngsters and middle aged people are the major investors. Lately, seniors have marked their presence in the market owing to the fact they are independent and are better equipped to take decisions post retirement. This offers a tremendous growth opportunity to the service providers.
  • Luxury consumerism: The current increasing prosperity in India’s economy has resulted in the increased number of rich people. Thus, luxury consumerism is seeing new heights. More developers are now looking to tie up with the international brands and are working towards launching more units.
  • Foreign Direct Investment: Foreign Investors interest in real estate sector is on a rise after almost five years. Recent easing of FDI rules is expected to bring in more capital into the property sector.
  • Make In India: Once the GST is rolled out, warehousing sector will take a huge leap forward reaching an inflecting point. Developers / Investors acquire corporate owned land parcels across the city with deals in excess of INR 1,100 crores. 1.5 –1.8 mn sq. ft. of Grade A Industrial / warehousing space leased in Chennai

The government at the Centre has been actively working towards formulating positive measures to boost up the economy and promote business expansion in all the sectors. The effort is clearly reflected by the increased demand in the year of 2015.

Occupiers’ expansion and growth plans in the city have continued despite the recent floods. However, they are now engaging in the study of flood plains, proximity of water bodies to their facilities and indulging in rigorous technical due diligence to assess possible risks and mitigation measures.

Likewise, developers are also taking precautionary measures such as revaluating the placement of electro-mechanical equipment in the basement, gradient of land and building to alleviate the possibility of damage from future floods. When the tide turns the other way local developers and domestic investors with their familiarity in the micro markets are the ones to rely on.