Author Archives: Rachna Ranjan

Blackstone forays into retail real estate, to double mall portfolio to 2.5m sqft by 2016-end

The world’s largest private equity manager Blackstone Group has entered India’s retailing sector by setting up a fully owned subsidiary Nexus Malls. The new entity will own and manage shopping centres in Asia’s third largest economy with a focus on turning around underperforming malls in the country. Nexus has already acquired AlphaOne malls in Ahmedabad and Amritsar having a combined 1.3 million sqft retailing space, and has a pipeline of deals to double the portfolio to 2.5 million sqft by the end of the current calendar, people directly aware of the matter said. Globally, Blackstone owns more than 1,000 malls across US, Europe and Asia Pacific. It controls Brixmor, a mall owning platform in the US, and a similar entity called Multi, which operates shopping centres in 14 European markets.

Read more: Economic Times

Prestige Estates may sell 40% stake in rental unit to raise around Rs 2,000 crore

India’s second largest listed real estate developer Prestige Estates Projects plans to raise at least $300 million, around Rs 2,000 crore, by selling up to 40% stake in its rent-yielding commercial assets and has drawn interest from Canadian Pension Plan and GIC of Singapore. The southern developer has hired JP Morgan to advise on the deal involving a string of shopping malls and office spaces valued at about Rs 5,000 crore, or $750 million, sources directly familiar with the matter said. Prestige is likely to sell anywhere between 26% and 40% stake in the income-generating commercial unit, which will be a subsidiary of Prestige Estates.

Read more: Economic Times

Blackstone plans to raise Rs 4,000 crore via India’s maiden REIT listing

The world’s largest private equity manager Blackstone Group, which is also the most prolific investor in Indian commercial properties, is finalizing plans to raise Rs 4,000 crore (about $600 million), through a listing of Real Estate Investment Trust (REIT) on the domestic stock exchanges, people directly familiar with the matter said. This will perhaps be India’s first REIT listing and a test case for global investors who have poured big bucks into the country’s rent-yielding commercial assets, especially tenanted office spaces.

REITs are listed trusts holding income generating properties, earnings from which are distributed to shareholders. Market regulator Sebi came out with REIT guidelines two years ago, helping real estate developers list their rent-yielding assets, and also providing large and small stock market investors with an inflation indexed product.

Read more: Economic Times

US investors to sell stake in BKC’s landmark project for Rs1,500 crore

A consortium of US-based investors that developed First International Finance Center (FIFC), a landmark commercial building in Mumbai’s financial district, Bandra Kurla Complex (BKC), plans to sell its stake in the property for around Rs. 1,500 crore, said two people aware of the development. Around 300,000 sq. ft of the total 657,000 sq. ft office complex is currently owned by Citibank NA. The firm had signed one of the largest commercial deals by value in 2013 by acquiring six floors of the 14-storey building for Rs. 985 crore.

The group of investors, including US-based Starwood Capital Group, India Property Fund and Urban Infrastructure Real Estate Fund, which owns the remaining portion of the building is in talks with global investors and other potential buyers, according to one of the two people cited above.

Fall in UK commercial property values slows in August: IPD index

UK commercial property values fell less sharply in August than the month before, a closely-watched index showed on Thursday, suggesting concerns about the impact of Britain’s vote to leave the European Union on the sector may be easing. Overall property values for UK commercial assets fell 0.65% year-on-year in August, the IPD real estate index, compiled by MSCI, showed on Thursday. This compared with a 2.8 percent fall in July, which was the biggest slide since March 2009 and reflected a sharp drop in market confidence after the June 23 vote.

The UK property market was a focal point for investor uncertainty in the days after the referendum, and at one point more than 18 billion pounds ($24 billion) worth of commercial property funds were suspended from trading.

Read more: Economic Times

Co-working gathers ground as startups look for affordable work spaces

With startups looking at affordable work spaces and central government creating an enabling environment for entrepreneurship, demand for co-working spaces has gone up. For a tech startup, cost of setting up an office in Mumbai, Delhi and Bengaluru range from $25,359 to $30,081 per annum, while operating out of co-working space would help these startups save anywhere between 72 per cent and 76 per cent, showed a report. Startup data tracking firm, Tracxn said there are 61 co-working spaces in India, of which 16 were set up in 2016. Recently, New York-based office rental startup WeWork, valued at $10 billion, said it plans to enter India by setting up its first office in Bengaluru. Another commercial builder, RMZ Group has also opened its community workspace venture CoWrks recently.

Read more: Economic Times

Godrej Properties opens 2nd overseas office in Singapore

With a view to spread footprints in global market, realty player Godrej Properties (GPL) has opened an international representative office in Singapore. This is the second overseas office of the city-based developer with the first one set up in Dubai two years ago, the company said in a statement issued on Wednesday. GPL has been working with customers in various global markets including Singapore, Dubai, Hong Kong, Australia, Africa, United Kingdom and the USA. “With the opening of this new representative office, GPL will engage directly with the Indian diaspora located across Singapore and neighbouring geographies,” its Executive Director Mohit Malhotra said.

Read more: Economic Times

RMZ Corp plans REIT by April next year

RMZ Corp, the Bengaluru-based property developer backed by Qatar Investment Authority (QIA), is looking to file a prospectus for a real estate investment trust (Reit) by April next year. The company is looking to list its Reit by the third quarter of 2017, RMZ Corp chairman Raj Menda told Business Standard. “Preparation are at a preliminary stage and we are in the process of appointing bankers,” said Menda. US-based private equity giant Blackstone, with its partners – Bengaluru-based Embassy and Pune-based Panchshil – are also believed to have started preparation for forming a Reit, sources said. Menda said they prefer a private Reit structure, as allowed in the case of the infrastructure investment trust (InvIT).

Developers step up focus on mixed-use office-cum-retail realty formats

The combination of retail and office complexes may not be entirely new to metro cities, but the trend of setting up such combined projects is fast catching on. Developers are now looking at experimenting more with a mixed-use format rather than standalone retail formats, allowing for quality retail on the lower floors and commercial spaces on the upper floors. Even today, key portions of several office buildings in major property markets are occupied by food & beverages and retail BFSI outlets. Such mixed-use retail developments have opened up a new format that would attract select categories of retailers.

Read more: Economic Times

Prestige Estates converting Bengaluru mall into IT park

Prestige Estates Projects that recently bought back Singapore headquarters fund CapitaLands stake in a mall project in Bangalore, is converting it into a IT business park due to lower supply in this segment. The Bangalore based company now plans to set up 1 mn sft IT park on the 4 acre property in The city. “There is short supply of IT space in Bangalore whereas demand is high,” said Irfan Razack CMD prestige group. The company had earlier planned to build a retail mall on the property that it bought from Graphite India in 2008. It had formed joint venture with CapitaLands for the same. “We bought back CapitaLands stake earlier this year,” said Razack. Prestige paid around 57 crore for the stake and now owns 80% stake in the project.

Read more: Economic Times