India Investment Property » Indore

Overbuilding Promises A Kick In The Gut For Realtors

Mon, 29 Sep 2008 05:31:53 +0000

Nipun Sahni, director and global head of commercial real estate at Merrill Lynch Capital, says the number of information technology parks and special economic zones in the 21-km Old Mahabalipuram Road — popularly known as OMR — in Chennai surpasses demand in the entire IT industry in India.
he said at a Ficci seminar, “It will be difficult for builders to raise finances for their other developments and in subsequent phases, projects will also be postponed”.
OMR, realty analysts say, is symptomatic of the overbuilding that has happened in far too many pockets.
Two other plum areas that are likely to face the same fate, they said, are Lower Parel in Mumbai and Noida in the National Capital Region, both of which are hotspots for A-grade office space. They predict high vacancy rates.
Lower Parel has a ready office space of 4.5 million square feet and will add a minimum 5 million square feet by 2009, taking the total commercial space to 9.5 million square feet.
Of this, DLF, India’s largest realtor, alone will add 3.8 million square feet through office space and a mall.
Indiabulls Real Estate, Peninsula Land and Orbit Corporation are also busy completing their projects in the locality.
To boot, top players such as DLF, Unitech, Emaar-MGF, Akruti City, Puravankara and others have expanded to states they were not present in, and have ended up in close proximity to each other, creating oversupply pockets.
What started as a building boom in 2007 across emerging markets such as Chennai, Hyderabad, Bangalore and Indore is a year later, a very different story thanks to the Reserve Bank of India’s rate hikes, the wealth-depletion effect of falling stock markets and economic headwinds.

Airports to emerge as business hubs

admin — Mon, 19 May 2008 09:39:14 +0000

NEW DELHI: All new airports in the country will emerge as business nucleus with world class office, hospitality and retail space. The modernization and development of airports will not only provide the facelift to respective cities but also improve the real estate sector, said a report by Cushman & Wakefield.
To exploit the trend of rising city centers around airports, the Airport Authority of India has provided huge land for development of commercial realty and retail space. For airports in Mumbai and Delhi, the report said, 50 per cent of the total real estate space has been allocated for commercial development.
India has come into view as one of the most favored destination in Asia-Pacific region for strong performance of businesses, which led to an influx of MNCs. This has sustained the demand for commercial office space in large cities. The high economic growth across the country also made the smaller cities like Lucknow, Kochi, Coimbatore, Mysore, Jaipur and Indore among others attractive destinations to do businesses.
The report said apart from commercial office space supply, these airport projects will also allow time saving between business meetings during the transit/ waiting period with the proposed convention and business centers that form part of the overall development plan.
In the retail sector also, the report said, huge opportunities are awaited. It said, “With changes in airport security, passengers today are required to arrive early, consequently finding themselves with adequate time to spend before departing.” This provides the opportunity to tap the captive consumer base with high spending power.

High Price of real estate forcing BPO to shift in smaller city

admin — Thu, 17 Apr 2008 12:37:43 +0000

The rush in real estate prices and a talent crisis in metros are forcing the $11 billion Indian BPO industry to shift to Tier II cities in the country, according to a study conducted by consultancy firm Everest Group.
“It is difficult to maintain the growth in Tier I cities because of the increasing real estate prices and talent crunch. There is no choice but to move to Tier II cities,” Everest Group’s Country Head (India) Gaurav Gupta said.
As of now, BPO industry is concentrated in seven cities namely Bangalore, NCR, Mumbai, Pune, Chennai, Hyderabad and Kolkata.
“Movement to lower-cost cities within India is likely to result in additional 15-30 per cent reduction in operating cost despite lower employability and higher management costs,” Head of Global Services at Everest Research Institute, Nikhil Rajpal, said.
Everest Group is a global consulting firm specialising in sourcing and offshoring advisory services. The study ranks several Tier II and Tier III cities on their potential to become BPO hubs for various domains in the future.
For finance and accounting services, Ahmadabad, Nagpur, Jaipur, Indore and Nasik emerge as ideal cities to host BPO firms. Similarly, Nagpur, Vishakhapatnam, Ahmadabad, Coimbatore and Mundra are ideal to have BPO operations in logistics domain.

Triangle RE fund to raise $500 m for Indian realty

admin — Mon, 31 Mar 2008 11:45:01 +0000

To cash in on the growth of organised retail in India, UK and South Africa-based real estate investment groups have launched retail property focused Triangle Real Estate Fund (TREF) for India. The $500 million fund will be routed through Mauritius and will be managed by Property Zone – a joint venture between Old Mutual Investment Group Property investment Ltd., South Africa and ICS Realty Private Limited, India.

Strutt & Parker Real Estate Financial Service Limited (SPREFS) has been appointed as UK and European placing agent. “Unlike most other real estate investors, the fund will dedicatedly concentrate on tier 2 and tier 3 cities in India.
Four projects in cities of Aurangabad, Jaipur, Indore and Nagpur have been selected for the first phase of investment. Surat is also being considered,” Nick Harvey Jones of SPREF told DNA Money.
“It is a high net worth investor fund which requires minimum investment of $5,00,000 form an individual and $5 million form institutional investors,” he added.
Two deals, consisting of 11 projects and having cumulative worth over $200 million, are in the pipeline.

Amrapali Group Invests In Hotel Projects

Sat, 29 Mar 2008 08:28:29 +0000

Amrapali Group, a UP-based real estate developer, will be investing about Rs 600 crore in different hotel projects in 2008. These hotel projects are under different levels of construction in different parts of India, primarily the north Indian cities, like Bareilly, Vrindavan, Greater Noida, Udaipur, Indore and Jaipur. The upcoming properties will comprise all categories, from budget hotels to 5-star properties.

Mr. Anil Sharma, Chairman & Managing Director of Amrapali Group said,”While the group has signed management contracts for few of its upcoming properties, negotiations are on for rest of the projects”. The group has already signed a management contract with Choice Hotels for the budget property at Greater Noida.

Two mid-segment hotels, one at Vrindavan and the other at Bareilly, would be managed by UP Hotels Clarks Limited. Sharma said that negotiations with InterContinental Hotels Group were on for the Udaipur property, which would be a five-star property at a prime 33-acres area. Similarly, negotiations with reputed hotel brands are also on for the upcoming budget properties at Indore and Jaipur. The group has recently acquired land in Raipur for construction.

When asked about the time-frame for completing these projects, Mr. Sharma said that the group could not afford to prolong construction for more than 28 months.

Real Estate Industry Spreads Over Small Cities

Mon, 28 Jan 2008 11:10:07 +0000

Disproportionate increase in property price in metro cities has resulted into expansion of hotel industry to small cities. The Giants of hotel industry are shifting their focus to cities like Ahmedabad, Bhuvaneshwar, Chandigarh, Coimbatore, Goa, Guwahati, Indore, Jaipur, Ludhiana, Lucknow, Mysore, Nagpur, Surat Vishakhapatnam and many more.

Main reason behind the change in investment trend is sharp increase in land price in metro cities. The land prices in small cities are much lesser in comparison to metros. So, decision of setting up a hotel in small cities means less investment and larger benefits.

According to Pawan Verma, executive chairman (Operations) ITC, out of the total cost of setting up a hotel in a metro, 40 per cent constituted land-cost. But in small cities, there is more demand for mid segment hotels. When a middle-income group family goes for hotel accommodation, they look for pleasant but affordable place to stay. They mainly look for secure and hygiene accommodation with good food. They don’t want hi-fi facilities. Keeping these points in mind, hotel industry is changing. With this improvement, hotel industry has expanded to middle class also.

Real Estate Development Prospect in India

Tue, 15 Jan 2008 09:25:51 +0000

January 08, 2008. Real Estate Companies and Investors are taking India as a great Investment destination. Real estate investment in major cities is taken as a beneficial deal. Real Estate Developers from the outside countries are showing their interest in building luxury villas in top Indian cities. They are looking for the joint venture partners for to enter into India. Recently, Citiscape real estate conference, held in Mumbai, had attracted various real estate developers from middle-east. Donald Trump Jr of the well-know Trump Organization in USA was looking for partners to invest in Indian realty market. Merrill Lynch & Co also bought 49% equity in several housing projects from DLF in Chennai, Bangalore, Kochi and Indore for Rs 1,481 crore. These projects are to be developed in about 7-8 years, as per reports. DLF also tied with Nakheel and Hines and Limitless Holding to develop properties in India. Real estate investors of Dubai are founding it safer to invest in Indian real estate as comparison to their own country.