Top 5 reasons to invest in Dwarka Expressway

Dwarka Expressway has created much hullabaloo in the real estate market of the Delhi-NCR. Top real estate developers have assured and re-assured about putting your money in this eight-lane expressway.

Also known as the Northern Peripheral Expressway, it covers areas such as Bijwasan, New Palam Vihar, Kherki Daula and finally meets the NH-8.

According to reports, Dwarka Expressway had done exceedingly well in the Oct-Dec FY2012-13 quarter with its proposed infrastructure.

Why should you invest?

Maximum Price Appreciation: Alimuddin Rafi Ahmed, MD of ILD opines that the Expressway falls in the R-Zone in the Gurgaon Master Plan-2021 which means in the coming years, the value will increase significantly.

Ideal for Investment Purpose: If you are an end-user then plan to invest in someplace else. Dwarka Expressway is excellent for people who wish to invest with a horizon of 3-5 years. Like Sohna Road in Gurgaon, the Expressway will be in proximity with commercial areas in sectors 105, 106, 109, 110, 110A, 111, 112, 113 and 114. Sectors 100 and 101 will be used for public utilities.

Location Benefit: Its close proximity to Delhi and IGI Airport will always ensure a quality price.

Better Options for Lesser Amount: Because the stretch is still under construction, there are more chances of getting a good size apartment as compared to other areas in Gurgaon. Rakesh Kaul, CEO, Experion Developers Pvt Ltd. in Times Property Virtual Expo mentioned “Look at parking your money in sectors 108, 109 and 111 along the Dwarka Expressway to gain almost 50 per cent returns ….” This stretch will soon be at par in investment potential and will also surpass Sohna Road in appreciation, he added.

Easy Connectivity: As per the new Master Plan, there will be a well-built 100m-wide roads connecting the area to the Metro corridor and the proposed diplomatic enclave. The 18km Expressway will be close to some SEZs that are coming up near Kherki Dhaula. This Expressway will reduce the travel time of commuters from west Delhi. It will be parallel to the NH8 till it merges ahead of the IFFCO Chowk.

Source: Content.Magicbricks.Com

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Shared office concept gaining popularity

Shared office spaces provide opportunities for many entrepreneurs to set up their own office at an early stage in their business in a cost effective manner.

In the last one decade, the concept of shared office space (also known as serviced offices or business centers) has become quite popular in the city. With entrepreneurship becoming big and start ups gaining momentum, there is a significant rise in the demand for such spaces in Chennai today.

A business center is a professionally managed commercial facility that offers end-to-end business infrastructure for short to medium-term duration. One can choose from a wide range of flexible options that suits one’s needs. Based on specific requirements with respect to space and infrastructure, people can enjoy the advantage of customized, unbranded serviced offices. The business centers offer tenants a private, often glass-walled office on a floor, which is also occupied by other firms. Amenities such as cafeteria, boardrooms, meeting hall and reception are shared between the firms. An organization or an individual entrepreneur can rent a desk, if they don’t need or can’t afford a huge office of their own.

According to Satish Chander Narayanan, associate director, investments, Cushman & Wakefield, “It is increasingly becoming a preferred choice for companies that operate on a small scale. For large scale firms, these help as temporary solutions until they move into their permanent facility. Additionally, these spaces were high on demand during the recent floods and almost all business centers were packed with more than their usual capacity during the months of December, and January.”

The occupancy rates are also high for this kind of property. Geethapriya R, general manager, Regus says, “People are looking at cost effective offices with good infrastructure, as real estate costs are escalating. Hence shared offices are being looked at as a viable option as it doesn’t involve infrastructural cost and initial investment. The prospective clients range from start ups to Fortune 500 companies. There is surely a good demand in this office space category.”

Sathish adds, “Over the last few years, a change is being seen in the attitude towards a serviced office, which initially posed a challenge for firms that were used to operating in their own office. With real estate costs going up, the need for a serviced office is seen as advantageous to a tenant who might be testing the waters with his new business. Besides, business centers have come in handy to provide long-term customized solutions for a number of firms who prefer operating from a serviced office than getting to invest in a full-fledged office space which would warrant them to invest in interiors and pay a significant amount as advance towards the premise. It isn’t surprising that there are firms which have been operating in these serviced offices for more than five or six years, though they have grown substantially.”

Puneet Murthika, senior business development executive, Lema Labs says, “Shared office spaces allow the company to enter a market without making a big financial commitment in an area that’s often unfamiliar. At the same time, employees get a wonderful and professional working environment. We look for work spaces that allow us to innovate and motivate us to work better. Shared offices provide such a platform.”

The story is set to be better with demand rising from domestic and international players. “For firms that place a lot of importance on convenience and flexibility, these spaces are being much sought after. With flexible options like single seat occupancy, many start-ups are also preferring to go with a cost per head arrangement.” says the spokesperson from Doxa Business Center.

“Features such as cost being calculated per workstation, convenience, ease of accessibility, flexibility, lesser planning, lower capital investment, hassle-free maintenance, professional reception services, high-speed broad band and single in voice attract entrepreneurs as they allow them to concentrate on their work. It also gives room for scalability. These are valued highly by emerging enterprises,” adds Puneet.

Source: CredaiNCR.Org

Private equity investments in realty rise 40 per cent to Rs 3,840 crore in March quarter

Home sales in the top Indian cities may not be growing at a brisk pace but private equity investments in real estate rose 40% year-on-year in the quarter to March at Rs 3,840 crore. Of this, 48% or Rs 1,870 crore went into the residential segment, according to a report by property consultancy Cushman & Wakefield.

The retail real estate segment witnessed the second highest investment, accounting for 26% of total investments in the quarter since 2008 on the back of a single investment, where Singapore’s sovereign wealth fund GIC bought the Viviana Mall in Mumbai from Sheth Developers for Rs 1,000 crore.

The commercial office segment recorded total investment of Rs 470 crore again in just one transaction where Blackstone invested in Salarpuria Sattva group’s project in Knowledge City in Hyderabad.

In 2015, private equity investments from foreign as well as domestic funds in Indian real estate grew 72% over the previous year to Rs 25,680 crore, the highest since the peak of 2008. In 2015, 70% of the total investments went to the residential segment, followed by the commercial segment at 21%.

In the quarter to March 2016, investments in Mumbai increased 12 times from the corresponding quarter of the previous year to 44% (Rs 1,710 crore) of total investments. This was followed by Hyderabad, which got a 19% share with investments of Rs 720 crore.

The Delhi-NCR region got 12.5% of the investments at Rs 480 crore, though investments here were only in the residential space.

“Domestic funds have continued to invest and focus primarily on the residential asset class as developers raised funds to meet their growing funding needs for working capital, construction financing and refinancing of loans,” said Sanjay Dutt, managing director-India at Cushman & Wakefield.

Dutt pointed out that the investments are being made mostly at the special purpose vehicle (SPV) level, amid a slowdown in residential sales over the past few years. Some of the large foreign PE funds such as Blackstone, GIC and Xander have sought to diversify their investment portfolios in India and are venturing towards the retail, mixed-use and hospitality segments apart from investments going into commercial and residential segments.

“This could be attributed to several opportunities arising across India wherein developers have been trying to raise capital by monetizing their distressed or non-core assets to reduce the high debt levels,” he said.

The total number of deals closed during the March quarter increased 13% to 17 from 15 in the corresponding quarter of 2015. The average deal size increased 23% to Rs 230 crore. But unlike the year-ago quarter that saw investments only in residential assets, the quarter to March 2016 witnessed investments across asset classes.

In the residential space, financial services firm IIFL invested Rs 500 crore with Aristo Realtors in Mumbai through a structured debt transaction. KKR India Asset Finance put in Rs 150 crore with Sunteck Realty in Mumbai.
Dutt said the SPV level route continues to be the most preferred by domestic as well as foreign PE funds.

“However, it is observed that joint venture partnerships and strategic alliances route have picked up over the past two years, wherein more foreign PE funds, pension funds and global financial institutions have entered into such partnerships with their Indian counterparts and real estate developers,” he said.

In the last few quarters, funds dedicated to specific asset classes have been set up through partnerships between builders and funds to invest in income generating commercial and residential assets besides the warehousing sector.

Source: Economictimes.Indiatimes.Com

Office rentals up in Gurgaon, Bengaluru

Office space rentals have appreciated in Gurgaon and Bengaluru, while remaining stable in Mumbai. Noida’s information technology segment saw a marginal rise.

Corporates were seen pre-committing space in under-construction developments in three cities – Bengaluru, Gurgaon and Mumbai – due to the limited availability of investment-grade space at prime locations, said Ram Chandnani, Managing Director-Transaction Services, CBRE South Asia.

Bengaluru office rentals witnessed an increase of 2-6 per cent q-o-q across non-IT spaces in certain micro-markets during the January-March quarter.

Chandnani said sustained demand led to marginal rental appreciation across South Bengaluru and areas of Indira Nagar, Koramangala, Old Madras Road, Domlur and CV Raman Nagar.

The rise in rentals in Gurgaon was led by DLF Cyber City and Golf Course Road. Noida too witnessed a marginal appreciation in rentals the IT segment, led by high demand for space in certain quality developments along the Expressway.

In other micro-markets of the region, however, rental values remained largely stable.

According to Chandnani, in Mumbai, rental values of corporate real estate across remained largely stable during the first quarter of 2016, with a marginal increase in certain office districts.

The peripheral locations of Malad/Goregaon in the Western Suburbs were the exceptions that noted a slight quarterly increase due to increased occupier demand in quality IT projects.

Meanwhile, the city recorded capital value growth for non-IT space across most front office space locations in the first-quarter, said Chandnani.

“As seen in past years, the first-quarter of the year usually witnesses muted transaction activity as most corporate real estate occupiers’ use this time to strategise their plans for the year ahead,” said Chandnani.

Source: CredaiNCR.Org

7 bottlenecks that hold back affordable housing in India

Incentivizing developers to enter the affordable housing segment and including mass housing zones in city master plans are must.

Large-scale affordable housing in cities is the greatest necessity of urban India today. Because Indian cities have such a severe shortfall on this front, we are seeing the proliferation of slums and unorganized real estate. These are detrimental to planned growth of our cities.

Large-scale urban developments – the only way to create affordable housing in the required magnitude in our major cities – are becoming increasingly difficult due to lack of land parcels, congested transit routes, lack of finance, rising input costs and regulatory hurdles.

If we take a bird’s-eye view of the problems plaguing this sector, the vision of Housing for All by 2022 becomes a hazy one at best. It is vital that these issues are addressed on a priority basis so that a comprehensive framework can be established for ensuring the development of affordable housing.

On analyzing the bottlenecks that currently hold affordable housing in India to ransom, it emerges that any approach towards a workable solution will have to encompass these functions.

1.) Formulate guidelines for identifying right beneficiaries:

It is important to formulate guidelines that will identify the appropriate beneficiaries for affordable housing projects. This is critical, as the involvement of speculative investors in such projects defeats the whole purpose. The National Population Register and issuance of unique identities via the Unique Identification Authority of India will become crucial elements in identifying the right beneficiaries if they are linked with income levels.

2.) Innovate on micro-mortgage financing mechanisms to ensure a larger reach:

Effective financing through micro-mortgages by utilizing the reach of self-help groups (SHGs) and other innovative financing mechanisms can ensure that housing finance is available to large sections of lower income groups (LIG) and economically weaker sections (EWS). Flexible payment mechanisms should be put into place, as households in low-income groups typically have variable income flows.

3.) Incentivize developers to enter affordable housing segment:

Urban local bodies can develop guidelines by giving free sale areas, extra floor space index (FSI) and other policy-level incentives to real estate developers, thereby attracting them to develop affordable housing. Schemes for redevelopment and slum rehabilitation should be developed with incentives that generate sufficient returns for the developers, while simultaneously controlling the development density.

A cost-benefit analysis of regulations should be carried out from a development perspective to ensure that schemes to facilitate affordable housing development are actually realistic and feasible.

4.) Streamline land records to improve planning and utilization of land:

Adequate availability of land for housing and infrastructure can be ensured by computerization of land records, use of geographical information systems, efficient dispute redressal mechanisms and implementation of master plans. The central government and some state governments have already begun work on this front, but there is still a lack of required pace.

5.) Include mass housing zone sin city master plans:

Additionally, ensure that these zones are developed within a pre-determined schedule, accounting for the future requirement of affordable housing. Some cities have already dedicated zones for development of affordable housing in their master plans. This needs to be replicated in other cities and towns – with a sharp focus on development timelines.

6.) Deploy well-researched rental housing schemes in urban areas:

Authorities like the Mumbai Metropolitan Region Development Authority (MMRDA) have experimented with rental housing schemes in the past. However, these have not been very successful as a proper framework for such schemes was missing. The most visible limitations were that development of rental housing took place in farflung areas which are not suitable for affordable housing, and the lack viable means to identify the right end-users.

7.) Formulate policies for greater participation from private sector:

The private sector can play a big role in affordable housing, most notably in terms of providing technological solutions, project financing and delivery. Disruptive innovations on these fronts, with a specific focus on affordable housing, are the need of the hour. We need imaginative, workable solutions to reduce the costs of construction in the face of rising input costs. As construction costs account for a significant portion of the selling price of affordable housing units, savings accrued on the back of such innovations can immensely benefit the occupier. The author is chairman and country head, JLL India.

Source: Hindustan Times (Estates), Apr 16, 2016, Page 03