Author Archives: Rachna Ranjan

Pre-leased commercial properties: Compelling investment choice

Pre-leased Commercial Real Estate (CRE) has been increasingly becoming one of the attractive investment opportunities in India over the last 12-18 months. Large private equity funds both foreign and domestic, sovereign wealth funds, family offices, UHNIs have been very actively investing in this asset class. Especially in an era post the demonetization drive, where the returns on fixed income products like G-secs, bonds, bank deposits are witnessing a declining trend, CRE is an attractive investment opportunity that can provide stabilized returns with appreciation on exit.

Read more: Economic Times

Rental properties in residential and commercial segments pick up post demonetisation

Steady rentals, high absorption levels and limited supply, have contributed to the commercial real estate market in India witnessing an improved sentiment. This segment has witnessed a surge, relative to other real estate asset classes, on account of the growth in the IT/ITeS, BFSI and consulting sectors and the growth of high-potential start-ups. There has been an increase in demand, from 4-5 million sq ft in 2000 to over 35 million sq ft in 2015. It is estimated that around 36.2 million sq ft of commercial real estate was absorbed last year, with approximately 40 million sq ft expected to be constructed in 2017.

Reliance AIF to raise Rs1,000 crore office fund

Reliance AIF Asset Management Co. Ltd is raising a Rs 1,000 crore rental yield fund, its first initiative to buy and own office projects. Besides Reliance AIF’s fund, two more such office investment funds are expected to launched this year.

Reliance AIF, a unit of Reliance Nippon Life Asset Management Ltd, launched the fund in January and is looking at investing in high-quality assets in key cities that will generate regular rental income and capital appreciation on exiting the property.

Tech, pharma firms among main drivers of Asia-Pacific office demand

There is strong demand in the Australian cities of Melbourne and Sydney, as well as in Bangalore in India and Bangkok, especially in their central business districts (CBDs). Other cities such as Ho Chi Minh City, Manila and Hong Kong continue to hold steady in terms of rental outlook, the survey found. Among the top sectors fuelling the demand for office space in 2017 are technology, professional services, pharmaceutical and real-estate businesses.

It has been reported that seven of the top 10 technology firms globally have set up their regional headquarters in Singapore, with 57 per cent of the offices in the island-state’s CBD. There is also strong government support for the technology sector in the Lion City, with the launch of the “Smart Nation” initiative in 2014.

Melbourne is another forerunner, with more than half of Australia’s top 20 technology companies located in the city and several high-profile Silicon Valley companies having opened their Asia-Pacific headquarters there.

Blackstone readies new Asia real estate fund of at least $5 billion

Blackstone Group is readying a new Asia-focused real estate fund that aims to raise a record $5 billion or more, betting on strong returns from property investments in the region, people familiar with the plans told Reuters.

The world’s biggest alternative asset manager will likely launch the fund in the next 12-16 months, the people said. It has invested more than 70 percent of the $5.08 billion it raised in its first Asia-focused property fund, a threshold when buyout firms typically start considering and preparing for follow-up capital raising.

PNB Housing to invest over Rs 300 crore in Parinee’s office project

Private equity major Carlyle Group-backed mortgage lender PNB Housing Finance has entered into an agreement to invest over Rs 300 crore in realty developer Parinee Group’s commercial project, said two persons familiar with the development.

The total funding, to meet project expenses, will be provided in stages and the tenure of the facility is four years. The project, Parinee I, is an office complex being built on around 1 acre of land parcel in Andheri, western suburb of Mumbai.

Read more: Economic Times

Blackstone in talks to buy space in Mumbai’s FIFC Tower for Rs 850 crore

US private equity major Blackstone Group is in advanced talks to acquire over 3.60 lakh sq ft spread over six floors in First International Financial Centre (FIFC) Tower in Mumbai’s business district Bandra-Kurla Complex for over Rs 850 crore, said three persons familiar with the development.

FIFC has been developed by a consortium of US-based investors, including funds affiliated to Starwood Capital Group, India Property Fund sponsored by The Chatterjee Group & Vornado Realty Trust and Urban Infrastructure Real Estate Fund. These investors are holding the property through a consortium company, Earnest Trading (ETPL).

“The discussions have almost been finalised and the deal for half of the building is expected to be concluded over the next few weeks. Under this transaction, Blackstone Group is buying out Earnest Trading,“ said one of the persons mentioned above.

Read more: Economic Times

NCR saw 8 per cent drop in office leasing in 2016 on low supply

Office space absorption in Delhi-NCR declined by over 8 per cent last year due to sharp fall in supply but the situation is expected to improve in 2017 with a completion of several commercial projects, according to a property consultant.
According to the data, office space leasing stood at 8.6 million sq ft during 2016 compared to 9.4 million sq ft in the previous year. Office space supply plunged to 2.8 million sq ft last year from 10.2 million sq ft in 2015, the data showed.

Read more: Economic Times

Nasscom lowers IT export growth target to 8-10% for 2016-17 crushing commercial realty

Commercial real estate absorption is likely to be affected with the software industry body Nasscom lowering IT export growth target to 8-10% for 2016-17 amid global macroeconomic headwinds, including the fallout of Britain’s exit from the European Union as well as Donald Trump’s victory in the US presidential polls.

At the start of the year, Nasscom had projected 10-12% growth for Indian software services, including business process management, for the current fiscal. Nasscom estimated the incremental revenue addition to be between $8 billion and $10 billion in 2016-17, against $10 billion in 2015-16.

Read more: Economic Times

DSG, Inc. Accelerates Growth with Opening of New Office in Bangalore, India

DSG, Inc., leading provider of eClinical technology solutions, data management, professional services and customer support recently opened a new office in Bangalore, India, to accommodate rapid growth and better serve client needs. DSG’s Bangalore office will complement its existing facility located in Noida, India. DSG Bangalore’s state-of-the-art facility will occupy a floor in the Prestige Shantiniketan building.

The new office space will accommodate over 300 people and support the company’s growth strategy. In expanding its footprint, DSG adds expertise, scale, and breadth of services, adding staff from a highly skilled pool of manager-level employees bringing years of industry experience from some of the largest pharmaceutical companies and global Clinical Research Organizations.