Amrita Jain was crystal clear about what she wanted while looking for a new home in Bengaluru.
The Karnataka High Court lawyer, who moved to the city from Dimapur in Nagaland, wanted a house that was well-connected by public transport, located close to schools and hospitals, and made by a builder she could trust.
Things changed when the city’s civic body Bruhat Bengaluru Mahanagara Palike (BBMP) initiated a demolition drive this month in a bid to tackle encroachment, just days after rain-triggered floods wreaked havoc in the city.
“My husband and I are… looking to buy our dream home. But reality is hard-hitting,” said Jain, who has since reworked her priorities.
“Earlier the criteria in zeroing down on an area for relocating were transport connectivity, office hours, proximity to schools and hospitals, and experience of the builder. But now my list has expanded to include encroachment-related issues as top priority,” she said. Jain is not alone.
Many potential property buyers in India and abroad have been alarmed by the anti-encroachment drive in Bengaluru. Some have delayed their plans to buy property. Many others are pushing for more due diligence and shunning parts of the city such as Yemalur, Bellandur, Marathalli, Sarjapur, BEML Layout, Whitefield and the Outer Ring Road that were severely affected by the floods and targeted by BBMP for encroachments, property consultants told DH.
“Most buyers looking for a house in these areas would either need a bigger assurance or might transfer their preference to other parts of the city that were less or not affected by the floods,” said Rohan Sharma, the research head at property consultancy JLL.
Hesitancy can also be seen in the resale market because people are more cautious about properties that came before the RERA Act was implemented in 2016, said Prashant Thankur, the research head at property consultancy ANAROCK.
“Such developments are an alarming concern for us as NRI buyers,” Dubai-based Saurabh Kumar, who is the manager of Faith international General Trading, said. “Moreover, I’m also now convinced about investing with reputed developers rather than local developers so that we don’t end up with similar situations.”
A proptech startup has “seen a spike of almost 150% in enquiries” by its NRI clientele since the demolition drive began, it told DH on condition of anonymity.
In fact, things have become so serious that property developers in “India’s Silicon Valley” have started taking unusual steps to reassure potential clients.
“In addition to making sure that all the relevant documents are in place, we now carry out site visits and look at the BBMP’s masterplan to strengthen due diligence on our end. We also encourage our clients to verify facts from their end,” Thakur said.
Bengaluru has traditionally been amongst the top three preferred destinations for real estate investment in India. The city witnessed a rise in demand for property yet again after the pandemic, especially from NRI buyers after the rupee fell.
Demand for rental properties had also climbed in recent times as professionals made their way back to offices, said Bhavesh Kothari, the founder of Property First Realty LLP.
But things might change if property developers fail to assuage buyer concerns.
“Ramifications of the demolition drive might be felt across six months and that too throughout the country,” said Debarpita Roy, Research Fellow at Center for Social and Economic Progress.
Knight Frank, Brigade Group and the Karnataka government declined comment.
Legal experts such as Ankita Paul urged prospective buyers to pay more attention to details such as title rights, mandatory clearances, RERA certification and developers’ prior litigation battles.
Fellow lawyer Jain agreed, but was not ready to give up on the city.
“I have never considered a plan B because I am determined to settle in Bengaluru for the rest of my life. However, I am willing to run an extra mile to ensure that I invest in the right place,” she said.
The stake sale will be executed through block deals on stock exchanges.
The exact quantum of the proposed stake sale, the third so far since the REIT’s listing in April 2019, has not been decided as yet and depends on the unit price of the REIT on the day of execution of the block deals.
On Friday, Embassy Office Parks REIT units closed at Rs 354.67 on the BSE.
Abu Dhabi Investment Authority (ADIA), the sovereign fund of Abu Dhabi, is believed to be participating in these block deals and picking up a stake worth $200 million in the REIT.
“The proceeds of this transaction are likely to be used to return money to participants in Blackstone’s close-ended fund that had invested in the REIT,” one of the persons mentioned above told ET.
Blackstone and ADIA could not be reached immediately for a comment. Reuters reported the story on Friday evening.
In September 2021 too, the global private equity major trimmed its stake in Embassy Office Parks REIT through block deals in the open market.
The institutional investor then raised $275 million by selling around 6% stake in the listed entity. The transactions reduced Blackstone’s stake in the REIT to 32%, from 38% previously.
Prior to the 2021 stake sale, Blackstone had $1.7 billion worth of exposure in Embassy Office Parks REIT.
Blackstone had then sold around 57 million shares of Embassy Office Parks REIT at Rs 355.2 per unit.
Institutional investors and funds, including BNP Paribas Arbitrage, American Funds Global Balanced Fund, Stichting Depositary APG Tactical Real Estate Pool, and Integrated Core Strategies (Asia), were among the key entities that had bought these REIT units in block trades.
Co-sponsored by the Blackstone Group and Embassy Group, Embassy Office Parks REIT is India’s first REIT that listed in April 2019.
This will be the third time Blackstone will be trimming its exposure to the REIT through open market block deals.
In June 2020, it had raised over $300 million by selling an 8.7% stake in the listed entity.
In December 2020, Blackstone and Embassy sold Embassy TechVillage, an integrated office park in Bangalore, to Embassy Office Parks REIT. Apart from this, a fundraising exercise by the REIT through a Qualified Institutional Placement (QIP) at that time had lowered Blackstone’s holding in the REIT to 38% from over 46%.
Embassy REIT owns and operates a 42.4 million sq ft portfolio of eight infrastructure-like office parks and four citycentre office buildings in India’s key office markets of Bangalore, Mumbai, Pune, and the National Capital Region. Its portfolio comprises 32.3 million sq ft completed operating area and counts over 190 global companies as occupiers.
Blackstone is the largest office, retail and warehousing landlord in India and has deployed over $11 billion in the country’s commercial real estate so far.
Bengaluru recorded 15.2 million square feet of gross leasable area in the first half of 2022, according to the latest report by Knight Frank India, a global property consultancy company. The gross leasable area of a commercial property is the area designated for the exclusive use of a tenant.
In Bengaluru, Grade B malls account for up to 50 per cent (7.6 million sq ft) of the total mall stock in the city. Grade A and C malls accounted for 42 percent (6.38 million sq ft) and 8 per cent (1.21 million sq ft) of the total mall stock, respectively.
“The existing Grade A malls have over 95 per cent occupancy, which is indicative of the demand for quality real estate in this segment. The scale and quality of development would require developers to specialize in shopping centre development and operations. Retail real estate will offer a great opportunity for investments, including REITs, in the future,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
The total GLA across 271 operational malls in the top eight cities in India stood at 92.9 million sq ft in H1 2022. Of the top eight cities, NCR (31.7 mn sq ft) leads the chart with the highest GLA space, followed by Mumbai (16.1 mn sq ft).
According to the report, between FY22 and FY28, organised retail sales volume is projected to grow at a constant annual growth rate (CAGR) of 17 per cent, reaching $136 billion in FY28. Factors such as organic consumption, growing consumerism, and improved economic momentum will contribute to the growth. Sales volume in India’s top eight cities increased at a CAGR of 24 percent and stood at $52 billion in FY 2022.
In terms of vacancy, mall vacancy stood at 15.4 sq ft on a national scale. According to Knight Frank data, ghost malls (malls with more than 40 per cent of vacancy) occupy 8.4 million square feet spread across 57 malls in the country .
“To assess the true picture of mall health, we have identified all mall properties with a vacancy of more than 40 per cent as ‘ghost malls’. It is prudent to exclude ghost malls as this stock does not attract widespread retailer interest due to various constraints. Once these malls are removed from the stock, the overall mall health improves drastically in India,” said Vivek Rathi, Director of Research.
September 13, 2022
India and Australia elevated their space relationship as six new industry-to-industry memorandums for collaboration between the two countries were signed at the seventh ‘Bengaluru Space Expo 2022” on Monday.
Australia continues to look at new ways to enhance its space collaboration with India, said the Head of the Australian Space Agency (ASA), Enrico Palermo, in his address to the international conference and exhibition. “The establishment of a Consulate-General in Bengaluru from 2023 will allow us to further develop the space relationship,” he said. “We also recognise the significance of India’s national space programme and are glad to be supporting the inspirational ‘Gaganyaan’ human space flight mission,” Palermo added. Highlighting the strong commercial links in space between Australia and India, six separate Australia-India space industry memorandums were exchanged at the inauguration of the space summit. Australia’s Space Machines Company will collaborate with Bengaluru-based aerospace and defence manufacturer Ananth Technologies on product integration, testing, technology development and joint-space missions. Australian startup HEX20 will work with Hyderabad-based Skyroot Aerospace to provide launch services, spacecraft avionics and components to Australian Space Initiatives. Perth-headquartered QL Space will also partner with Skyroot Aerospace to further develop launch facilities in Australia and support joint mineral exploration missions in space. Perth is known as Australia’s resources, mining and mining technology capital. QL Space will partner with Chennai-based GalaxEye to develop a hybrid optic and Radar payload to reduce the adverse environmental impact of critical mineral exploration in Australia and beyond. QL Space and Bengaluru-based SatSure will work together to build satellite and AI-based solutions to support the agriculture, mining and defence industries, and apply this technology to the outer space environment.
Australia’s SABRN Health, Altdata and India’s DCube will work together on the development and integration of hardware, sensor technology and software to provide health support to astronauts, it was stated.
”They (Australia) were able to attract (Indian) startups to work together. This shows that Australia is also open to launching our satellites from their land sometime, and vice versa”, Secretary in the Department of Space and Chairman of Indian Space Research Organisation, S Somanath said.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
Domestic and international developers of warehousing and industrial funds that are eyeing the segment include Panattoni, Investcorp-NDR Group, RMZ, Hiranandani-Blackstone, Actis, Assetz Property, Ivanhoe Cambridge and Prologis.
“The industrial and warehousing segment is at a very nascent stage and there is a huge runway available for investors and developers. The sector is also showing increased potential, with the creation of new JV platforms and increased commitment from the existing ones,” said Shishir Baijal, country head of property consultancy firm Knight Frank India.
According to investors and warehousing developers, India’s move towards becoming a global manufacturing hub, supported by international corporations’ growing interest in reducing their dependence on China and its supply chains, is expected to be a key driver in accelerating the development of the domestic logistics sector. Other enabling factors include increasing ecommerce adoption, infrastructure development and regulatory reforms.
Panattoni, one of the largest industrial real estate developers in the world, has marked its debut in the Asian markets with the opening of its first operational headquarters in Bengaluru.
The firm aims to launch two to three projects by the end of 2023, involving an initial investment of $200 million.
“The infrastructure push by the government will open up new locations across the country. The ecosystem is right, and it is easy to scale now.
Greater supply chain efficiency, rapid ecommerce growth, and consolidation among third-party logistics providers are all fundamental market drivers that India increasingly shares with its counterparts in the US and Europe,” said Sandeep Chanda, managing director, India, at Panattoni.
Bengaluru-based real estate developer RMZ Corp is firming up plans to venture into the industrial and warehousing space as it looks to diversify its portfolio.
India’s Infosys Ltd on Sunday reported June-quarter profit that missed estimates, hurt by higher employee expenses, but the IT services company raised its annual revenue outlook, citing a strong demand outlook.
Infosys’ larger IT rival Tata Consultancy Services and also smaller rivals such as HCL Technologies and Wipro have seen their margins erode as they battle a higher sector-wide talent churn and try to retain employees.
Overall expenses surged more than 29%, while operating margins for Infosys for the June quarter came in at 20.1%, down 3.6% year-on-year. The company also retained its operating margin guidance for full year at 21%-23%.
The company was making investments in talent through hiring and competitive compensation revisions, which will impact margins in the immediate term, Nilanjan Roy, chief financial officer, Infosys said in a statement.
However, Bengaluru-based Infosys expects revenue growth of 14%-16% for the financial year to March, slightly up from its view of 13%-15% forecast in April.
“We see good volume growth, good pipeline of large deals and that gives us the confidence for increasing revenue guidance,” chief executive officer Salil Parekh said in a media call.
Infosys saw its large deal signings dropping about 35% to $1.7 billion rupees, while gross addition of clients during the quarter dropped to 106 from 113 a year ago.
But chief executive Parekh said the company was seeing good traction with large clients.
Consolidated net profit for Infosys rose 3.2% 53.60 billion rupees ($12.5 million), but missed analysts estimates of 56.26 billion rupees, according to Refinitiv data.
The April-June quarterly earnings reports have started on a weaker note for Indian IT services companies, with TCS, HCL Technologies and Wipro also missing their first-quarter profit estimates.
Revenue from operations for Infosys jumped 24% to 344.70 billion rupees.
Financial advisory firm Sambhav Consultancy facilitated the deal.
The construction of this 18-acre project got significantly delayed because of the dispute with the joint venture partner.
Ansal Buidwell bought back the 50 per cent stake of its partner in the JV firm Ansal Crown Infrabuild Pvt Ltd to end the dispute. Ansal Crown Infrabuild Pvt Ltd is now a 100 per cent subsidiary of Ansal Buildwell.
In November 2019, the Centre announced a Rs 25,000-crore fund, named Special Window for Affordable and Mid-Income Housing (SWAMIH), to help complete stalled housing projects across the country. SBICAP Ventures is managing this fund.
The first phase comprising 527 units is almost complete and will be handed over in 4-6 months. The second phase, having around 350 units, is 70 per cent complete and will be completed by December 2023.
Ansal Buildwell will launch the third phase of around 150 units once the second phase reaches near completion.
”In the Delhi-NCR market that is suppressed with delayed deliveries of homes, this deal will help provide relief to hundreds of troubled homebuyers. We helped raise funds for Ansal Crown Heights project, which is a large stalled project in Faridabad and this will enable its completion in due time,” Vaibhav Jain added.
As per the data compiled by real estate consultant Anarock, 4,79,940 units worth Rs 4,48,129 crore are ”stalled or heavily delayed” across seven cities — Delhi-NCR, Mumbai Metropolitan Region (MMR), Kolkata, Chennai, Bengaluru, Hyderabad and Pune — as of May 31, 2020.
In its research, the consultant has taken only those housing projects that were launched in 2014 or before. Homebuyers who booked flats in housing projects in the Noida-Greater Noida property market are worst affected, with over 1.65 lakh flats worth Rs 1.18 lakh crore currently stalled or significantly delayed in these two cities, according to Anarock.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
Owing to surging demand, the city witnessed a sale of 13,663 new residential units in the first quarter of 2022, posting a year-on year growth of 34%
Following covid-led disruptions, realty market showed steady signs of recovery led by few cities like tech heartland of Bengaluru. Data showed increase in residential property sales in
FINANCIAL SECURITY BOOSTING GROWTH
Knight Frank attributes factors like financial security and growth in wealth for the increase in demand for residential units in Bengaluru. The supply also remained robust at a ten-quarter high with 10,106 residential units in Q1 2022. The average pro followed by Pune property prices in Bengaluru grew at 7% and Mumbai at 5% and 4% YoY respectively. Additionally, the mushrooming of start-ups is a boon for the real estate sector in Bengaluru. What’s more, millennials from across India have played an important role in driving up sales in the affordable category.
Experts recommend looking into properties in and around commercial areas such as Whitefield, Indiranagar, Hebbal, Electronic City, etc. Investing in such regions would mean a value-buying for long-term benefit for an individual.
Also, developers in Bengaluru have started to capitalise on the most elite segment of the housing market, for which they have ready buyers. However, Bengaluru is still an emerging real estate market, as unlike cities like Mumbai or Delhi, there is scope of urban land to develop.
DROP IN INVENTORY
Bengaluru has registered a 23% drop in the inventory of unsold houses. This is one of the steepest drops among significant cities for the first quarter of 2022, according to the first edition of the e housing price tracker report, by
The areas that have been showing more returns than average in the ‘garden city’ of India are located at Whitefield, KR Puram, Hebbal and Yelahanka to name a few. Sale of flats in these locations has escalated at a steady rate while the areas steady rate: high in areas promise an increase in the capital values of properties and rental Infrastructure push in alds as
BENGALURU: Bengaluru’s booming tech industry has directly contributed to an increase in residential and office spaces in the city. According to a report released by Knight Frank India, an international property consultancy agency, the city has accounted for 31 per cent of the country’s office transactions in the first half of 2022. In addition, Bengaluru has also registered a 117 per cent increase in transactions related to office space going from 3.6 million sq ft in 2021 to 7.7 million sq ft in 2022. Meanwhile, residential sales went up by 80 per cent, despite Covid-19, adding 21,223 units in the city.
The report titled ‘India Real Estate: H1 2022’ analyses and records residential and office market highlights in eight major cities in the country for the first half of the year from January to June. It attributes the increase in Bengaluru’s housing and office market to the working population slowly shifting back to working from their offices.
The report also found that hiring had gone up by 35 per cent in the city between January and May, which may have contributed to the demand for an office.“We expect the momentum to continue as the physical occupancy rates are expected to pick up,” said Shantanu Mazumder, Knight Frank India, Bengaluru.
Construction work of nearly 4.8 lakh homes worth Rs 4.48 lakh crore are currently stuck or significantly delayed across seven major cities, although builders have completed 37,000 such units so far this year, according to property consultant Anarock.
For its research, Anarock has taken only those housing projects that were launched in 2014 or before across seven cities — Delhi-NCR, Mumbai Metropolitan Region (MMR), Kolkata, Chennai, Bengaluru, Hyderabad and Pune.
As per the data, 36,830 languishing homes were completed in these cities between January 2022 and May 2022.
At the end of May 2022, Anarock said that 4,79,940 units worth Rs 4,48,129 crore were stuck in various construction stages across these seven cities.
”Developers remain committed to completing their projects and are capitalizing on the ongoing demand for ready-to-move homes,” said Prashant Thakur, Senior Director & Head – Research, Anarock.
”What is notable is that they are maintaining momentum despite considerable headwinds from increased input costs, which have gone through the roof in the last five months. The fact that housing demand has remained strong in last two years obviously helps,” he said.
Pune has about 9 per cent share, while Kolkata accounts for 5 per cent.
Among cities, Delhi-NCR saw the maximum completion of 16,750 units during January-May, 2022. Currently, the NCR region has 2,40,610 stuck/delayed units worth Rs 1,81,410 crore.
At the end of December 2021, NCR had 2,57,360 stuck/delayed units worth Rs 1,94,034 crore.
In MMR, 1,28,870 units are stuck/delayed worth Rs 1,84,226 crore. The region had 1,34,170 languishing units worth Rs 1,91,807 crore at the end of the last year.
Around 5,300 units were completed in MMR during January-May this year.
Bengaluru saw completion of 3,960 units during January-May 2022. Currently, the Bengaluru city has 26,030 stuck/delayed units worth Rs 28,072 crore.
At the end of the last year, the IT city had 29,990 stuck/delayed units worth Rs 32,345 crore.
In Hyderabad, 1,710 units were completed during January-May 2022. The city currently has 11,450 stuck/delayed units worth Rs 11,310 crore, while at the end of December 2021, the figure was 13,160 units worth Rs 12,995 crore.
Chennai currently boasts of the lowest burden of stuck units among the top seven cities, the consultant said.
At the end of May 2022, Pune had 44,250 units worth about Rs 27,533 crore. In 2021-end, the city had 48,100 stuck homes worth Rs 35,220 crore.
As many as 3,850 stuck/delayed units in Pune got completed during January-May this year.
Kolkata saw completion of 1,580 homes during January-May this year. Currently, Kolkata has 23,540 stuck/delayed units worth over Rs 11,847 crore. In 2021-end, there were 25,120 stuck/delayed units worth Rs 12,639 crore.
Anarock, which is one of the leading property consultants in India, achieved a 32 per cent growth in its revenue at Rs 402 crore during the last fiscal year.
Anarock, established by Anuj Puri in April 2017, is majorly into housing brokerage and sells flats on behalf of the developers. It also provides consultancy in other segments of real estate like office, retail, warehousing and data centre.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)