Category Archives: business

This Real Estate CEO Told us Which Specific Part of India’s Property Market is Going to ‘Take a Beating’

India’s growing middle class and burgeoning retail and commercial sectors, coupled with the dearth of properties, make the country’s real estate market a potentially lucrative place to invest.

However, there is one part of the real estate market that is set to implode – luxury and premium properties.

That’s what Anuj Puri, Chairman & Country Head, of JLL India (formerly Jones Lang LaSalle) told Business Insider on the sidelines of the World Economic Forum in Davos, Switzerland.

“Mostly all sectors of India’s real estate market are good for investors apart from one – luxury and premium properties. A lot of developers got it wrong and didn’t realise that we don’t have many millionaires and billionaires in India so the luxury and premium market is going to take a beating. There’s too much supply and too little demand,” said Puri.

“But what we do have is a growing middle class and at the moment, as latest data from March 2015, it shows there is a 18.3 million dwelling unit shortfall. Affordable housing is very lucrative. When I say ‘affordable housing’ I am talking about the $75,000 to $100,000 range. There is huge demand.”

JLL and its country head for India, Puri, are pretty perfectly placed to make the call on where the Indian property market is going. After all, JLL is one of the world’s leading and largest real estate and investment management companies with $6.2 billion in market capitalisation. Puri also oversees a team of over 8000+ employees across 11 cities in India.

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High-rise residential towers under construction are pictured behind an old residential building in central Mumbai.

Puri says that affordable housing isn’t the only potentially lucrative area for property investment – retail, warehouses and commercial real estate are all areas that are seeing demand growth.

“Retail properties are also a great opportunity for investors as people have better buying power,” said Puri.

“There is also a lot of opportunity, which not a lot of people have identified yet, in warehouse and logistics. In India, most of these compaies are non-sophisticated and ‘mom and pop’ shops and it doesn’t seem very sexy for an investor but it could be a great area for expansion if the ‘Indirect Tax Bill‘ gets through parliament.”

Indirect Tax is when the Indian government collects take from an intermediary such as a manufacturer or retailer. It’s pretty complicated but the current government led by Narendra Modi is trying to get this changed and more streamlined by introducing a uniformed Goods and Services Tax (GST) bill.

And Puri thinks this could be the key to opening the market up more to foreign investment and “trust” for companies looking to bring business to India.

“Hopefully the bill (which unifies tax rates) will go through. At the moment, India has 29 states with 29 taxes,” he said.

“As a company like Proctor and Gamble for instance, you aren’t going to set up units or warehouses in different parts of India and worry about what taxes they have to pay in each different state. It makes it too difficult for people to do business.”

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Phone Companies Shed Surplus Real Estate by skyline construction bangalore

Old-school telephone companies are wrestling with a dilemma their younger rivals would love to have: what to do with all that real estate.

Buildings accumulated over decades, from windowless and fortresslike switching centers built to handle landline gear to modern warehouses filled with web servers, are up for sale after their telecom owners decided to focus on wireless services.

 

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Some spaces “were purpose-built to be telephone buildings,” said John Vazquez, head of global real estate at Verizon Communications Inc. “They were never intended to be anything else.” In addition to unloading older facilities, Verizon is considering placing its newer data center businesses on the block.

Mr. Vazquez’s department is taking different approaches to the 114 million square feet of office and equipment space it oversees. Older telephone buildings, which often occupy prime real estate in the Northeast, often go to condominium developers. Newer data center buildings designed for computers, not telephones, are being shopped to prospective telecom and private equity investors.

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.”