Author Archives: Rachna Ranjan

High times for the Chennai real estate market

2016 was year of many big announcements. From the Smart Cities mission to demonetization, there were several headline-making events that would change the face of Indian real estate in the times to come. Chennai embraced these changes and lived up to its reputation of being a city that bounces back, regardless of the odds.

Chennai is among those metros which has a healthy diversification of economic growth driver. Its economy has a broad industrial base, with Chennai’s port and its thriving IT/ITeS and BFSI sectors contributing to its growth. The city’s manufacturing sector includes the automobile, computer, technology and hardware industries.

What REITs (Real Estate Investment Trusts) mean for Indian Real Estate

The real estate sector in India has been lucrative for savvy investors over the last decade, but it has not been without accompanying uncertainties. The introduction of REITs (Real Estate Investment Trusts) will open up a platform that will allow all kinds of investors – even those with smaller budgets – to make safe and rewarding investments into the Indian real estate market. The best thing about REIT is that investors can start with as small a sum as Rs. 2 lakh to secure units in exchange.

The REIT platform has already been approved by the Securities and Exchange Board of India (SEBI) and like mutual funds, it will pool the money from all investors across the country. The money collected from the REIT funds will subsequently be invested in commercial properties to generate income.

Bengaluru beats Silicon Valley and Shanghai, becomes the most dynamic city in the world

Bangalore has emerged as the most dynamic city in the fourth annual City Momentum Index of cities around the world, followed by Ho Chi Minh City of Vietnam and Silicon Valley in the U.S. Hyderabad also makes it to the Top 10, ahead of London, and Chennai and Pune to the Top 20, but environmental factors push Delhi and Mumbai to the 23rd and 25th spots.

Also, India has taken over from China as home to some of the world’s most dynamic cities.

The Index tracks the speed of change of a city’s economy and commercial real estate market. It covers 134 major established and emerging business hubs and identifies cities that have the potential to maintain the greatest dynamism over the short and long term.

Six Indian cities feature in the CMI Global Top 30, with the country’s primary technology hub, Bangalore, moving into the top spot for the first time.

The report noted that dynamic labour markets help fuel some ‘Emerging Megacities’ such as Chennai, Manila, Delhi and Mumbai. However, this group faces significant infrastructure and quality of life issues, with high levels of inequality, congestion and pollution hindered by weak city governance.

Source: Knowstartup.com

Office space absorption in first half of 2017 to be muted

Commercial real estate activity across top cities in the country could be muted in the first half of 2017 after seeing a mixed trend in the year gone by, according to a property consultant. According to the report, while Bengaluru, Hyderabad and Mumbai saw double-digit growth in office take up in 2016, net absorption in Delhi-NCR was about 4.3 million sq ft, a 9 per cent drop from the previous year, as companies continued to consolidate their offices in Gurgaon and Noida for greater productivity and cost efficiencies. While fall in net absorption of office space was 47 per cent in Pune, it was 20 per cent in Chennai and a 22 per cent in Kolkata.

Ascendas India lifted by strong Q3 results

Ascendas India Trust (a-iTrust) posted strong third-quarter results due to more income from a recently acquired information technology (IT) park and a new office building. Distribution per unit (DPU) for the quarter rose 5 per cent to 1.42 Singapore cents.

Net property income for the three months that ended Dec 31 grew by 7 per cent, compared with the same period last year, to reach $26.4 million. In rupee terms, it grew 9 per cent to hit 1.27 billion rupees.

MCX opens new office at GIFT City in Ahmedabad

The Gujarat International Finance Tech (GIFT) City on Tuesday moved yet another step closer to its goal of becoming a comprehensive international services centre with the inauguration of India’s largest commodity player, MCX’s new office.

It is, however, becoming increasingly evident that a slew of regulations need to be put in place before India’s first IFSC can become a viable option to international exchanges in Singapore, Dubai and Hong Kong.

Hyderabad raring to occupy quality office spaces

While 2016 was a good year for Hyderabad’s commercial leasing sector, with offices furiously picking up a whopping 6 million square feet along the city’s IT belt, this year will be no different, says the latest report published by CIRIL, a country-wide real estate network.

According to the report, Hyderabad stands ahead of cities like Mumbai, which witnessed a total office space absorption of 2.75 million square feet and Kolkata, which saw 1.5 million square feet office space absorption in 2016.

Softbank mulling a $1 billion investment in office-sharing space provider ‘WeWork’

Softbank unveiled its plans of investing $100 billion in tech companies along with the Saudi Arabian sovereign wealth fund known as ‘The Vision Fund’, just a few months back. With regards to the same, SoftBank Group Corp is now mulling over investing a massive sum of $1 billion in a co-working space provider, WeWork. Though both the leads, SoftBank and WeWork have declined to comment on the matter, the reports were first published by WSJ citing people familiar with the investment talks.

Office space market remains immune to demonetisation

Of the total uptake of office space in 2016, nearly 40% of the total net absorption took place in the last quarter of 2016, according to a international property consultant.

Bengaluru recorded the highest net absorption during the year. The city’s net absorption rose 28% to 12.7 msf during 2016. The new high in 2016 is roughly 5% higher than the last net absorption peak that Bengaluru witnessed in 2011. However it was Hyderabad that caught everyone’s eye. The city is in the midst of frenzied activity from investors and businesses since last year resulting from the government’s proactive steps to create “Brand Hyderabad” through investor-friendly policies and improving infrastructure.

45% of respondents across India expect commercial real estate prices to soften

The November 8 announcement of the government to demonetise high value currency notes of Rs 500 and Rs 1000 has dampened sentiments of the real estate sector across India, which until now had been comparably more upbeat than most markets in Asia. Both the Occupier Sentiment Index (OSI – an index that shows supply, demand and rent expectations) and Investment Sentiment Index (ISI – an index capturing overall market momentum) readings turned negative in the National Capital Region and Mumbai after demonetisation, according to RICS’ Global Commercial Property Monitor.

The OSI index recorded a reading of -3 in the Q4 (October-December, 2016). It represents the weakest number reported for this indicator since the end of 2013. Demand for retail property fell over this period. Office space was more sought after though the rate of demand growth appears to be moderating.