Category Archives: Bangalore

Investors Turn Pessimistic on Commercial Real Estate

Monthly rentals and capital value expectations in commercial real estate in India rose in September quarter, albeit, at a pace lower than expected before, according to the Royal Institute of Chartered Surveyors (RICS), the UK-based qualifications and standards body for land, property and construction.

The Indian commercial property monitor also indicated that more number of respondents – investors and tenants – in the previous quarter felt that market valuation of the commercial properties were expensive compared to the quarter before.

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In contrast, the percentage of those who had previously felt that office spaces were fairly priced dipped in the third quarter ended September 30 compared with the earlier quarter.

In terms of the property price cycle of the commercial segment in the real estate sector, a large percentage – 38.3% – feel that it was in stabilisation phase. The percentage, which believed it was in an early uptrend, was also high at 27.2%. An almost equal percentage of 24.7% felt the commercial property segment was in mid-downturn. Only 6.2% felt it was in mid-upturn and a small 1.2% felt it had peaked.

Devina Ghildial, managing director, South Asia, RICS, said the Indian commercial property market was on the upswing as demand was outstripping supply but growth in rentals was modest compared with earlier expectations.

“There is a dearth of available supply of grade A office or commercial spaces across major cities in India. Many new MNCs are looking to come into the country while existing large corporates are also ramping up their operations at a solid pace, but supply of grade A office space is not able to match up to this demand, leading to healthy appreciation,” she said.

According to the report, there was a spurt in the demand for commercial property in the sector as auto, banking financial services and insurance (BFSI), telecom, fast moving consumer goods (FMCG), consumer durables, IT and e-commerce start-ups in the national capital region (NCR), Bangalore and Mumbai, which remained upbeat with closures of several large-sized transactions during the quarter.

Ashutosh Limaye, head – research & real estate intelligence service, JLL India, said commercial properties in India were most affordable when compared to other global markets with rentals having bottomed out and making its way up.

He said the rise in rental was “gentle” but the direction was definitely up.

“The rentals in the commercial segment of real estate is currently fair and competitive as it is still below the previous peak (in 2008),” said Limaye.

According to him, Bangalore was the only market that had reached its peak of 2008 while most others remained more than 10% below it.

Limaye said Chennai was 2% below its peak, Pune 10% while the rest were over 10% lower than their peak.

He said Mumbai and Delhi had reached a high of Rs400 per square feet (sq ft) per month in 2008.

“Today, Nariman Point is 30% below that (2008 commercial property rentals) while suburbs like Andheri, Kurla and others were 20% lower,” he said.

J C Sharma, managing director of Sobha Developers, said India offered arbitrage in two things – wages and salaries and office rentals. He said MNCs came to India because of these two arbitrages available to them to be competitive in the global market.

“If you, exclude markets like Mumbai, Bandra Kurla Complex (BKC) and Delhi, 90-95% of the transactions in the Indian commercial property sector were less than $1 per sq ft, which is very cheap compared to markets in other emerging markets and some of the Southeast Asian countries like Malaysia, Bangkok, Jakarta, etc,” he said.

Sharma said high absorption rate in the commercial sector over the past few quarters in markets like Chennai, Kochi and others had resulted in better realisation in rentals.

Chinese Real Estate Developers Eye Opportunities in India to Float JVs for Big Projects

Chinese Real Estate Developers Eye Opportunities in India to Float JVs 

MUMBAI: After global private equity and sovereign funds, now Chinese developers are eyeing investment opportunities in India’s property sector.A team from international property consultancy JLL is holding exploratory talks with Indian developers to seek investment opportunities for their Chinese clients. The Chinese developers are looking to forge strategic partnership and enter into joint ventures with Indian builders to invest in large scale residential projects.

China’s outbound investment directly into global real estate has risen 50% to $15.6 billion since January this year with New York, London and Sydney becoming the leading investment destinations.As a first major investment by a Chinese company, one of the largest developers Dalian Wanda Group has announced its intention to invest $10 billion in India in the next 10 years to construct industrial townships and retail properties.

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“Major attraction for this investment is growth. Next 10 years of growth cycle in Indian real estate will be similar to what China had experienced in the past 10 years,” said Alistair Meadows, head International Capital Group (Asia Pacific) JLL, Singapore.

Apart from expectations of attractive returns, slower real estate market in China itself is also prompting Chinese developers to look elsewhere, including India. “We can expect at least $3-4 billion investment inflow from China into the Indian property market over the next 3 years,” said Shobhit Agarwal, MD, Capital Markets & International Director, JLL India.During his visit to Beijing in May, Prime Minister Narendra Modi had pitched for Chinese investment into India to help bridge a widening trade gap. According media reports, his visit had witnessed deals worth $22 billion being signed.

“Indian developers are achieving returns more than most mature markets the world over are fetching,” said Darren Xia, Head -International Capital Group, JLL China, while explaining Chinese developers’ interest in the Indian property market. “A number of Chinese developers have been studying the Indian market since the past 12 months.”

Meadows and Xia, who have been holding talks with Indian players for striking an alliance with Chinese builders, expect Chinese insurance companies to start investing here. According to an estimate by JLL, Chinese insurance groups could allocate up to $240 billion to real estate outside of China, based on current metrics over a longterm period.

Continued loosening of outbound investment regulations since 2012 is driving China’s insurance groups to actively seek real estate assets in gateway cities around the world. These funds are keen to take advantage of the asset class’s income-producing characteristics, its relatively low risk, and the benefits of a diversified portfolio.

Investments from China-based builders are expected in big-ticket projects in key property markets of India. “While investing, scale will be crucial for Chinese developers as they are familiar with the large scale development. To begin with, investments are expected in Mumbai, Delhi and even Kolkata. Most of what they (Chinese developers) will do will be opportunity led,” Meadows added.

Regular For Driving Development Organizations is Capability by skyline construction

Regular For Driving Development Organizations is Capability:-

You can see this wonder in rising worldwide problem areas. Development inside of these spots compared greater with better. Development organizations keep on building towering inns, high as can ascend, and mammoth shopping edifices. These foundations are all respected the place’s symbols riches and also stature inside of the International economy. These structures in like manner serve as business, relaxation, and private venues for its visitors, travelers, inhabitants and the expat populace.

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One of the qualities of a trustworthy and incredible development organization is its dedication to natural wellbeing. The most dependable development agencies execute unbending wellbeing and security measures as far as transportation, stockpiling, treatment, gathering, and an additional transfer of perilous squanders. They guarantee that administration procedures are as per all the neighborhood regulations, and worldwide benchmarks end with a particular objective. Besides, verify that their undertaking will represent no destructive effect on their representatives, the future building inhabitants, the overall population, the group, and additionally the earth.

Another regular for driving development organizations is capability and superb client support. Driving development firms nowadays ensure that their methodologies with their undertakings are inside of its custom. It would further imply that occasion the most common structures are the inherent agreement with the most noteworthy principles, from the idea to the materials and gear used, to the whole development procedure.

Real Estate Company Skyline Constructions

Real Estate Company:-

Skyline Constructions is a land organization best known for its different private developments in the South Indian city of Bangalore. The bunch’s birthplaces can be followed back to more than a hundred years, having at first begun off as a family-run undertaking with interests in espresso ranches. From that point forward, Skyline has figured out how to achieve the exceptionally top of the property improvement industry through a mix of reliable hard working attitudes, straightforward business rehearses and persistent advancement. Perceived by CREDAI-Karnataka, Skyline has figured out how to end up a standout amongst the most presumed and trusted manufacturers in the city.

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A deliberately amassed group of modelers and architects power Skyline to fabulousness in different private undertakings. With ventures, for example, Skyline Olympia, Skyline Solstice, and Skyline Ambrosia effectively finished and massive spending plan offerings including Skyline Boulevard and Skyline Dynasty in the offing. It is anything but difficult to see why clients, both existing and proposed, have such confidence in the Skyline brand.

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Horizon has as of late gone into the business property advancement field and will probably be hoping to convey its prosperity over from the lodging undertaking industry into this new pursuit. The firm intends to develop business edifices on the edges of Bangalore at places that incorporate Whitefield, Kanakapura Road, and Bannerghatta Road.

Toward the day’s end, it is basic to be reliably superb if one is to succeed in an exceedingly aggressive business sector like the Bangalore land industry. Horizon’s thriving image quality is abundant verification of the dedication the organization shows to conveying results that experience the grandiose principles it sets for itself. Development arranges in other national markets like Mangalore and, also, universal markets, for example, Dubai are in progress, and the organization looks ready to develop from quality to quality within a reasonable time-frame.

Analysis: Crowdfunding of U.S. Real Estate Deals Gains Momentum

U.S. Real Estate Deals Gains Momentum

A tipping point may be near for U.S. investors seeking to benefit from crowdfunding in real estate, an industry that is a clear winner in the early stages of raising capital for small businesses over the Internet.

The amount of money raised, size of deals and the speed at which they occur – at times in a matter of hours – has steadily increased, suggesting crowdfunding for real estate is maturing.

Lifting a regulatory ban that bars ordinary investors from crowdfunding could greatly boost the volume of deals and capital raised for companies, while allowing investors to directly access annual returns of 7 to 12 percent, industry executives say.

Crowdfunding is the practice of financing a project or venture by raising small amounts of money from many people, typically through the Internet. Crowdfunding for real estate, despite rapid growth, is still a speck in the investing ecosystem, said Nav Athwal, founder and chief executive of San Francisco-based RealtyShares.

The company wants to make real estate investing as easy as investing in stocks, a common industry refrain, but a big hurdle at present is that only accredited investors – those with at least $1 million in assets excluding their home – can invest in the online marketplaces that connect borrowers with investors.

“We are very eager to one day be able to open our platform to anybody that wants to put $1,000 or a couple hundred bucks into real estate, because let’s face it, real estate is one of the best ways to build wealth and you shouldn’t have to have a certain net worth to invest in real estate,” Athwal said.

According to a posting on the website of the U.S. Office of Information and Regulatory Affairs, the implementation of Title III of the Jumpstart Our Business Startups Act – which would open crowdfunding to small investors – was tentatively expected this month.

THE RACE IS ON:-

Real estate has been the crowdfunding standout since the JOBS Act two years ago allowed an exemption to the ban on the public solicitation of private capital investments, said Crowdnetic Corp, a provider of crowdfunding data and research.

Over the two-year period ended September 2015, total capital raised for real estate development and investment in the United States through crowdfunding was $208.3 million. That represents almost a quarter of the $870 million committed since September 2013 through the 506(c) clause of the JOBS Act, Crowdnetic said in a report citing data from 18 leading intermediaries, or online platforms for crowdfunding.

The market is bigger, though, as RealtyShares has originated more than $100 million in loans via the 506(b) clause, which prohibits marketing securities by solicitation, while 506(c) allows it if all investors are accredited.

A race is now on among the online marketplaces to better vet the companies seeking capital to reduce investor risk. RealtyShares receives almost 1,000 applications a month, but puts only 5 percent onto its platforms, Athwal said.

Peer Street, a real estate platform that has been operating in beta mode since January, launched its site on Monday, hoping to tap existing loans from private money lenders. Historically it might take $100,000 to $250,000 to get into a single loan or pool of loans, said Brew Johnson, a co-founder of Peer Street.

“Now you can take that same amount of money and create a diversified portfolio across many loans to reduce the risk,” he said.

FOLLOW THE SMART MONEY:-

The real estate crowdfunding industry, as measured in total volume and number of deals, is poised for possible annual growth of 25 percent or more, said Luan Cox, president and chief executive of Crowdnetic.

An announcement two weeks ago that venture capital firm CSC Upshot raised $400 million to invest in startups on AngelList suggests a tipping point in crowdfunding, as it will allow small investors to mingle with angel investors, or those who back small startups or entrepreneurs, she said.

The deal is “a very public and substantive nod to the market and a signal for retail investors to follow the ‘smart money,'” Cox said.

However, most people still do not know what crowdfunding is, and those who do fail to understand how to invest through this medium, said Mark Robertson of Salisbury, North Carolina, who launched a website, CrowdDD.com, this year to facilitate the discussion of crowdfunding opportunities among investors.

Robertson said he can now invest in real estate deals that in the past required knowing the right people in a syndication.

Over the last decade Robertson might have learned of two or three investment opportunities, but crowdfunding has “democratized” investing and increased transparency.

“With crowdfunding I’ve literally looked at over 500 deals across the country in different asset classes,” he said. “Instead of money sitting in the bank earning half of 1 percent a year, I can now earn 10 to 12 percent a year.”

China’s Q3 GDP up 6.9% y-o-y Compared to Forecast of 6.8%

China’s economy grew at its slowest pace since the global financial crisis in the third quarter, reviving expectations of further stimulus to avert a stalling of the world’s growth engine.

The world’s second largest economy expanded by 6.9 percent in the July-September quarter, slowing from a 7 percent increase in the previous quarter. The numbers were still better than market expectations.

Analysts polled by Reuters had forecast gross domestic product (GDP) in the world’s second-largest economy would grow 6.8 percent in July-September period from a year earlier.

“As growth slows and risk of deflation heightens, we reiterate that China needs to cut reserve requirement ratio (RRR) by another 50bps in Q4,” ANZ economists Li-gang Liu and Louis Lam, said in a note. A basis point is 1/100th of a percentage point.

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“Looming deflation risk suggests that the People’s Bank of China will also adjust the benchmark interest rates, especially lending rate, down further.”

Growth was up 1.8 percent quarter-on-quarter in Q3, China’s National Bureau of Statistics (NBS) said on Monday. This compared to a Reuters forecast of 1.7 percent, down from a revised 1.8 percent in the second quarter.

Bureau spokesman Sheng Laiyun told Reuters that China faced increased downward pressure on exports, and the government needed time to absorb excess capacity in traditional industries.

The survey-based unemployment rate in China was around 5.2 percent in September, Sheng added.

The government has set its annual economic growth target at “around 7 percent” for 2015, but at the weekend Chinese Premier Li Keqiang admitted that with the global economic recovery losing steam, hitting such a target was “not easy.”

Additional data released Monday showed that fixed-asset investment (FIA) growth eased to 10.3 percent year-on-year in the Jan-September period, missing market expectations. Analysts polled by Reuters predicted investment growth would come in at 10.8 percent, compared with 10.9 percent posted the prior month.

Industrial output growth also cooled more than expected to 5.7 percent, disappointing analysts who expected it to rise 6 percent on an annual basis after a rise of 6.1 percent the prior month.

Retail sales quickened to 10.9 percent. Analysts forecast they would rise 10.8 percent on an annual basis after a rise of 10.8 percent the prior month.

Asian shares outside Japan turned positive after the GDP beat. TheShanghai Composite rebounded 0.5 percent, while the CSI300 Index of the largest listed companies in Shanghai and Shenzhen advanced 0.7 percent and the smaller Shenzhen Composite moved up 0.4 percent.

Australia’s S&P ASX 200 index erased losses to edge up above the flatline. The Australian dollar also got an upward lift, traded at $0.7259 versus the greenback, compared with $0.7241 prior to the data releases.

South Korea’s Kospi also moved into the flat-zone.

Some commentators were skeptical of the numbers produced by China’s statistics bureau, however.

“Quelle surprise,” Dow Jones quoted Michael Every, Asia head of financial markets research at Rabobank, as saying. “That 6.9 percent figure looks very convenient.”

China’s stock market went into meltdown between June and August, triggered by a host of factors, including an unwinding of margin trades and concerns over lofty valuations. This, analysts said, would likely have reduced the financial sector’s contribution to third-quarter growth.

Aside from financial sector woes, a sluggish real estate market continues to weigh on the economy. Real estate is linked to dozens of other key sectors, including steel and cement, that are already grappling with oversupply.

While property sales and prices have been on the rise in response to increasingly accommodative housing policy, housing construction is still in the doldrums. Given the large inventory of unsold housing, strong housing sales momentum for a sustained period was needed before housing construction could recover meaningfully, according to Oxford Economics.

On the bright side, consumption was holding up on the back of robust wage growth, helping to cushion the blow from weakness elsewhere in the economy, economists said.

Melbourne Looks Set to Outshine Sydney on the Property Ladder

IT’S the turf war that struggling househunters in Victoria don’t want Melbourne to win:-

Generations of friendly Sydney versus Melbourne rivalry has lead to heated banter about the “best” coffee, but this time it just got serious — whose property will be the priciest?

SQM’s 2016 Housing Boom and Bust Report out today suggests that while the general Australian property market is about to hit a go-slow phase, Melbourne looks set to outshine Sydney when it comes to price growth.

“We believe that Melbourne will be the outperformer of the year followed by the Gold Coast and Hobart. Each of these respective cities are benefiting from the lower Australian dollar,” said Louis Christopher, managing director of SQM Research.

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Despite predictions last week that Australian property prices were set to slump by 7.5 per cent, SQM’s 2016 Housing Boom and Bust Report forecasts that average capital city dwelling prices will rise between 3 per cent and 8 per cent next year. That’s a slowdown from the more substantial 9.8 per cent rise recorded for the 12 months to June 2015.

Melbourne homeowners could be laughing as property prices rise.Source:Supplied

Mr Christopher said it is “highly unlikely” that an across the board price correction will occur next year. He based this on the fact the Australian dollar is “likely to stay at current low levels, or even fall” as well as the low interest rate environment.

“We forecast the national residential housing market will slowdown in 2016 predominantly as a result of a slowing Sydney housing market. However we do not believe the market will record a fall in prices for the year,” Mr Christopher said.

“There might be one quarter, perhaps, where Sydney records a marginal decline. But that should be it,” he said.

Next year SQM forecasts that the harbour city will see property prices rise between 4 per cent and 9 per cent — a modest movement considering prices there jumped a whopping 18.9 per cent in the year to June 2015.

So Sydney’s slowdown makes way for Melbourne’s market to take the lead. The report tips a rise in Melbourne dwelling prices of between 8 per cent to 13 per cent.

The overall go slow of the Australian property market is attributed to an ongoing housing market correction in the resources exposed capital cities of Perth and Darwin and the APRA actions (which were announced earlier this year) of restricting credit growth.

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With the Aussie dollar at current low levels, there’s a buffer for the economy and the housing marketSource:News Limited

He said the big worry for the Australian housing market over the medium to long term is the looming threat of global deflation.

“This is quite a danger to our markets here given the level of debt in the housing market right now, which we note has risen again against incomes over the course of 2014/2015 to be at all-time highs. This threat became all too apparent this week when Westpac lifted their variable home loan lending rate. In a global deflationary environment the risk premiums banks would require on their lending book would most likely skyrocket due to the greater threat of defaults and falling asset prices,” he said.

“For 2016 we believe the RBA has some ammunition to offset this looming risk however we are concerned of their ability to handle the issue over the medium to long term.”

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Finally, could Australian rents be getting cheaper? Picture: Phil WilliamsSource:News Corp Australia

But all this could mean some relief for renters.

“This year, it has become quite apparent that rents have slowed, possibly as a result of the lower inflationary environment. We believe there is evidence that rents will slow further in 2016 with our average capital city forecast to be 0 per cent to 3 per cent. Perth and Darwin will experience the largest falls in rents however this is just part of an ongoing trend currently being recorded in these two cities,” he said.

But renters in Hobart, Melbourne or on the Gold Coast will have to brace — these areas look set to record the strongest rental increases.

“We believe the threat of a massive oversupply in Melbourne has been overstated. Indeed our vacancy rates for that city have fallen for the year as population growth and housing formation have quickly absorbed the new stock being completed,” he said.