Author Archives: Rachna Ranjan

U.S. office vacancy rate flat for third straight quarter: REIS

U.S. national vacancy rate for the office sector in the third quarter was flat from the second, even as vacancy fell 20 basis points year to date, according to real estate research firm Reis Inc. Asking and effective rents growth for the office sector increased compared with the previous quarter, Reis said in a report. National vacancy rate remained at 16 percent for a third successive quarter, while the year-over-year decline in vacancy was 40 basis points, the company said. Construction activity fell from the second quarter, with 6.4 million square feet of new office construction completed during the quarter.

Read more: Economic Times

Accenture leases 280,000 sq ft office space in Bagmane’s Bengaluru SEZ

Consultancy and management services provider Accenture has leased around 280,000 sq ft office space on a long-term lease at Bagmane World Technology Center IT SEZ in Bengaluru, said two persons familiar with the development. The lease, which was formalised early this year, has a monthly rental of Rs 59 per sq ft, that translates into an annual rental payout of around Rs 20 crore. Accenture in an emailed response said, “We regularly evaluate our real estate options to meet our business needs. Bengaluru is a strong talent hub and we continue to have a significant foot print here, supporting and driving innovation for our clients.”

Read more: Economic Times

Milestone Capital Advisors looks to raise Rs 1,400 crore

Private equity firm Milestone Capital Advisors is looking to raise Rs 1,400 crore through its Milestone Commercial Advantage Fund to invest in pre-leased assets, including commercial offices, IT parks and logistic parks, a top executive at the firm has told ET. The fund raising will have a greenshoe option of Rs 700 crore. This will be Milestone Capital’s 11th fund and its fourth private REIT fund. Tenure of the fund will be up to 7 years, including two extensions of one year each. The fund will invest in grade A commercial assets in top five property markets—Mumbai, Pune, Bengaluru, Delhi-NCR, Hyderabad and Chennai. It will make investment primarily in pre-leased assets with the aim to generating periodic yields and capital appreciation on exit.

Read more: Economic Times

Coworking space firm Instaoffice to lease around 1 lakh sq ft of office space by March 2017

Coworking space provider Instaoffice plans to lease around 1 lakh sq ft of office space by March next year and expand operations to Bangalore and the National Capital Region. “We are focusing on demand based expansion and aim to set up 1,500-2,000 desks, leasing around 100,000 sq ft by the end of this financial year,” said Vikas Lakhani, co-founder and chief executive officer, Instaoffice. “While Bangalore and NCR would be the prime markets for us, we will set up strategic footprints cities like Mumbai,”he added. The company, based out of Gurgaon at present, have five offices in total, with a total area of 15,000 sq ft. “We are opening one office each in Gurgaon and Bangalore in October, which will take the total easing to around 25,000,” he said.

Read more: Economic Times

Stake sale in DLF arm to be a close contest between GIC & Blackstone

The race to buy 40 per cent stake in DLF’s rental arm, DLF Cyber City Developers (DCCDL), could turn out be a close fight between Blackstone and GIC – two of the biggest investors in the Indian real estate market. According to sources in the know, the difference in bid amount of Blackstone and GIC is just Rs 500 crore and the difference in cap rates is 0.2 per cent. Cap rate shows the potential rate of return on a real estate investment. DLF’s rental arm DCCDL is valued at around Rs 2,400 crore. “Blackstone and GIC are neck and neck in bids and are currently doing due diligence,” said a senior executive at a private equity firm. According to him, though Blackstone has quoted higher, GIC could emerge a favourite to buy the stake as it is a sovereign fund and has perpetual capital.

Singapore’s DBS Bank set to lease 100,000 sq. ft in Mumbai

Singapore’s DBS Bank Ltd is close to leasing nearly 100,000 sq. ft at Express Towers, a 25-storeyed building in Mumbai’s Nariman Point, in one of the biggest office space deals in the business district since the 2008 global financial crisis that prompted many corporates to leave the locality. The bank is close to signing the lease agreement at a monthly rental of Rs230 per sq. ft, which works out to Rs. 28 crore a year, three people aware of the development said, on condition of anonymity. Global private equity firm Blackstone, which jointly owns Express Towers along with Pune-based Panchshil Realty Ltd, declined to comment.

Rahejas eye $500 million from deal with Temasek, Warburg Pincus

K Raheja Corp, one of the largest developers of IT parks, is in talks with Singapore-based Temasek Holdings and American private equity firm Warburg Pincus to sell stake in its office space holding company, said a source in the know. The C L Raheja-promoted company wants to sell 20 per cent stake in the office space arm and the final deal could be pegged at around $500 million, sources said. The group started the process two to three months ago. Sovereign and pension funds such as GIC and CPPIB have stayed away from the deal as it is a minority stake sale, it is learnt. The stake sale could be a precursor to Rahejas hitting the market with a real estate investment trust (REIT).

Office space developers set to raise $3.5 billion by March 2017

Large office space developers in India are set to raise more than $3.5 billion by March from institutional investors and pension funds. The fundraising will help the property developers bring new investors on board and expand their project portfolios.

Bengaluru-based RMZ Corp., backed by the Qatar Investment Authority (QIA), plans to raise about Rs1,700 crore by selling a stake in a portfolio of office assets. QIA, which bought a 22% stake for Rs1,200 crore in RMZ’s first office platform, will also invest in the second venture, and the developer is in talks to bring another investor on board.

Mumbai may add 16 million sq ft office space by 2017-end

Mumbai is expected to add around 16 million sq ft of fresh office space by the end of 2017. The current office stock in the city is at 106 million sq ft and is likely to add 8% of this stock, or almost 8.5 million sq ft, through this year.

The commercial capital of the country figures in the top three cities globally that will add the maximum supply of Grade-A office space through 2017, according to a recent finding. Shanghai tops the list among major global markets, followed by Mexico City, Mumbai, Beijing, Singapore, Sao Paulo, Tokyo, Moscow, San Francisco and London in the top 10, as of first half of 2016.

Read more: Economic Times

Land allocation for $100 billion DMIC project to begin in October; Ikea, Kia Motors eye plots

The $100-billion Delhi Mumbai Industrial Corridor, one of India’s most ambitious infrastructure projects, will kick off land allotments next month and those eyeing plots are said to include big global investors like Ikea, Kia Motors and China Railway Construction Corp.

The allocations will mark a significant step forward in a project that was approved by cabinet in 2011. Other potential investors include German wind turbine manufacturer Senvion, Korean Land & Housing Corp. and Chinese real estate company Country Garden, said a person with knowledge of the matter. The land will be fully developed with world-class infrastructure, a big attraction for investors ready to pay a premium for clean titles in four brand new industrial cities being developed as part of the project.

Read more: Economic Times