Category — Real Estate

Multinationals Bullish on Warehousing in India

Due to growth in both the consumer sector and e-commerce in India, overseas investors and real estate players are increasingly investing in warehousing and logistics.

Key players such as Singapore’s Ascendas-Singbridge, Assetz Property Group, Ohio-based Logos Realty, Canada Pension Plan Investment Board and the Everstone Group, among others, have made major investments in this segment.

Some quotes from senior management:

“We are seeing extensive demand from our existing and new customers for institutional grade logistics facilities in the region,” said Trent Iliffe, joint managing director, Logos.

“We have been in India for over two decades, developing iconic business and IT Parks… Entering the industrial and logistics sector is a natural progression,” Miguel Ko, group CEO Ascendas-Singbridge said.

Srinivas N, managing director, Industrial Services, of Chicago-based JLL India, said, “Thanks to fresh investments, supply and interest in this sector, the Indian logistics industry is set to reach the next level.”

“It is a good time for developers/investors to evaluate this sector to add to quality organized warehousing infrastructure keeping in perspective the latent demand and consolidation/expansion expected post-GST roll out,” said Shyam Arumugam, associate director, Office Services, of Canada-based Colliers International India.

Amazon and DHL announced plans to expand their warehouses, reports BusinessLine.

warehouse

August 21, 2017   No Comments

Demand for Retail Space in India Surges

According to Los Angeles headquartered CBRE’s India Retail MarketView Report – H1, 2017, during the first 6 months of the year, there were 70 new entries/expansions by global and domestic brands across the cities of Mumbai, Delhi-NCR and Bangalore. Seven new global brands entered the country and investments into the segment by PE firms/wealth funds touched $200 million.

 Anshuman Magazine, chairman, India & South East Asia, CBRE said, “Our ranking on the 2017 Global Retail Index for developing countries as well as continued investment by private equity players is a demonstration of the sustained preference of international brands to set up, or expand their operations in India. With several legislation and policies in implementation mode, we are already seeing an increase in consumer and investor confidence. This will have a cascading effect on the retail segment. Overall, retail real estate will continue to grow and witness healthy demand across tier I and II cities.”

City Highlights

NCR

  • Approx. 200,000 square feet of fresh supply entered the market
  • Low vacancy levels led to select micro-markets in the city witnessing rental appreciation for prime retail developments

Mumbai

  • Leasing activity was driven by domestic F&B operators and foreign retailers from various segments
  • Over 1 million swuare feet of supply was added with opening of the  Seawoods Grand Central Mall
  • Rentals on Linking Road recorded a minor correction while rental values across other high streets and organized retail developments remained largely stable

Bangalore

  • Approximately 300,000 square feet of fresh retail supply entered the market
  • Rental values across high streets and shopping centers remained stable
  • In the coming quarters, sustained traction from both global and domestic brands may lead to rental appreciation in organized developments in the Central, Eastern and Western locations

CBRE says: Going forward, to effectively operate under the new GST regime, retailers will need to review their product pricing based on market expectations, align their supply chain and procurement strategy, rework their distribution channels, and ensure greater compliance to laws to be more cost-effective.

A Mall

August 19, 2017   No Comments

Blackstone’s Strategy in India Yields Rich Dividends

Tuhin Parikh, senior managing director for real estate in Mumbai at the New York City-based PE and asset management firm Blackstone, has aggregated a 100-million-sqft portfolio in India. Parikh and Blackstone scripted a gold rush into the country’s rent-yielding office spaces, which saw Brookfield Asset Management, Qatar Investment Authority and others investing in India.

The Times of India reports: Parikh struck acquisitions, joint ventures and made strategic investments to build the India portfolio that dwarfs Goliaths such as Boston Properties and Vornado Realty in the U.S. Now, Blackstone plans to list one of its joint ventures, Embassy Office Parks, which bankers expect to fetch a $4-5 billion valuation. Later this year, Embassy REIT will list 35 million sq ft operational and pre-leased offices, with $240 million in annual rentals, to raise as much as $1 billion. This provides both Blackstone and Embassy with liquid shares in a  publicly listed trust, offering inflation-hedged returns to investors fleeing gold and residential markets.

Real Estate

Through strong local partners and outright acquisitions Parikh has 27 projects on the ground across six cities in India. Global investors Canadian Pension Plan and GIC of Singapore, among others, are looking to invest in India’s realty market.

August 12, 2017   No Comments

Marigold Capital Set to Acquire The Leela in Chennai

Mumbai-based private equity fund Marigold Capital and Investments is set to acquire the Leela Group’s 326-room hotel in Chennai, India, for approximately $109 million. The fund specializes in buying debt-ridden hotels and commercial real estate properties and turning them around.

Mumbai-based JM Financial, an investment bank that is the advisor to the sale said, “The deal with Marigold is in the documentation stage where the final agreement will be drafted.”
The Economic Times reports that last year, the JM Asset Reconstruction Company sold the Leela Group’s hotel in Goa to a Malaysian conglomerate MetTube SD BHD for about $113 million.
The Leela Chennai

June 12, 2017   No Comments

“Co-Working” Catches on in India

Co-working, a concept where individuals or startups share a common workplace environment, is slowly catching on across prime property markets in India. Across the country, co-working space of 0.73 million sq ft was tenanted last year.

“Though still nascent, this category could prove to be a disrupter as bigger co-working players such as WeWork enter India and more such facilities pop up across cities,” said Ramesh Nair, CEO of JLL India.

With 9,600 seats available at co-working facilities across the country, Mumbai records the highest absorption nationally, followed by Delhi-NCR, Kolkata, Bangalore, Chennai, Pune and Hyderabad, reports the Economic Times.

Inside an Office

Sumit Lakhani, CMO at Awfis Space Solutions said, “Companies can make savings of up to 20-30% by working in a co-working space.” The firm’s clientele includes small and medium-sized enterprises, start-ups, freelance professionals, consultants, and corporations.

May 30, 2017   No Comments