COMMERCIAL PROPERTIES

BENGALURU: Mumbai-based developer Indiabulls Real Estate Ltd (IBREL) and its joint venture partner, Blackstone Group Lp, are acquiring three office assets in Delhi and Gurugram, even as it is in talks to exit the real estate business, said two people familiar with the development, seeking anonymity. Acquisition of two office properties will be completed in the June quarter, while the third one will be closed after that. All assets will be part of the joint venture portfolio. Commitments for these acquisitions, which will bring assets with annuity income under the joint venture, were made earlier, and the partners will go ahead with them, said the first person. Last March, Blackstone had bought a 50% stake in IBREL’s office properties One Indiabulls and Indiabulls Finance Centre in central Mumbai for $730 million ( ₹4,750 crore), which helped the developer reduce its debt. Days after Indiabulls Group chairman Sameer Gehlaut said the firm will give up the real estate business if needed, ahead of the proposed merger of Indiabulls Housing Finance Ltd with Lakhsmi Vilas Bank, the promoters initiated talks with potential buyers to exit the business. Promoters’ stake in IBREL stands at 38.8%. The Indiabulls Group is believed to have sounded out joint venture partner Blackstone and other leading developers to offload its stake in IBREL, The Economic Times had reported last week. “Most of IBREL’s residential projects are at an advanced stage of construction and the firm hasn’t launched anything significant recently. The commercial office portfolio is fairly large and once the acquisitions are completed, Blackstone will own a large part of the firm’s projects," said the second person. When contacted, Blackstone and IBREL spokespersons declined to comment. In an analyst presentation last week, IBREL said its rental portfolio is ready for a real estate investment trust, or REIT, listing, which will provide an opportunity to unlock value. In the past couple of years, IBREL has been streamlining its realty portfolio, exiting office and residential projects in markets such as Chennai, and deciding to focus primarily on Mumbai and the National Capital Region (NCR).

Indian real estate sector attracted investment of Rs 17,682 crore in the January-March period, highest quarterly funding since 2008, on strong inflows from foreign investors in commercial assets, according to property consultant Cushman & Wakefield. The investment was up by 7 per cent from Rs 16,528 crore in the corresponding period last year. Foreign funds investment in Indian real estate rose 81 per cent to Rs 11,338 crore in the first quarter of 2019 calendar year from Rs 6,260 crore in the year-ago period, the data showed. “Higher participation of foreign investors this quarter is a signal towards sustained interest in the country’s real estate story backed by increasing transparency and friendly investment policies,” Cushman & Wakefield (C&W) India Country Head & Managing Director Anshul Jain said in a statement. Office and retail segments continued to attract high investment, he said, adding that warehousing/logistics segment was also providing opportunities for investors. “The first successful REIT (real estate investment trust) listing has opened another avenue for investors to participate in the momentum visible in office markets while also reinforcing the attractiveness of Indian realty,” Jain said. Asset-wise, C&W said the housing segment got 57 per cent less investment during the January-March quarter of 2019 at Rs 3,697 crore from Rs 8,518 crore in the year-ago period. The funding inflow in residential sector got affected owing to liquidity issues of NBFCs which have been a major source of refinancing and lending to this asset class in last 4-5 years, the consultant said. Investment in office properties rose to Rs 7,925 crore from Rs 6,100 crore during the period under review. Hospitality segment got Rs 3,950 crore in the first quarter of 2019, an over three-fold jump from the year-ago period at Rs 1,200 crore. Investment flow in retail real estate jumped to Rs 1,000 crore from Rs 250 crore, and that of in mixed-use projects to Rs 350 crore from Rs 110 crore. Industrial segment (warehousing and logistics) received Rs 760 crore as against Rs 350 crore during the review period.

GURUGRAM: Government agencies have failed to curb commercial activities being run from residential buildings on Golf Course Road, despite repeated complaints. As per norms, commercial activities are not allowed in residential areas, be it colonies — which come under, or plots in sectors — falling under HSVP (formerly Huda). The agencies are also failing to check commercial properties coming up on the stretch — marked as a residential area — flouting all norms, which are causing revenue loss to the state exchequer that run into several crores. Sources said there are over 20 residential buildings, in which the builders, after procuring occupation certificates, made changes in the structures to start commercial activities that include gyms, salons, showrooms, clinics, educational institutes, etc.

MUMBAI: At a time when India’s housing market is yet to recover from a prolonged slump, demand for commercial real estate has continued to grow with several large institutional investors pouring big investments into the segment. “India is a multi-decade story for Brookfield and not a five year story. We have a large footprint in India but we still call ourselves a start up in the larger context of the Brookfield platform we have globally. Real estate houses the economy and the economy is doing well," said Ankur Gupta, managing director & regional head, India real estate, Brookfield Asset Management. India is an important market for the Canada-based investment firm and its presence would not be restricted just in the office market but would look at expanding into other emerging real estate segments like rental housing and industrial housing, Gupta said at a panel discussion on “Real Estate: Finally out of the woods", as part of the Mint India Investment Summit 2019.

Residential property prices across India’s major markets are expected to rise in the second half of this financial year as sales momentum is expected to pick up pace with an increase in demand. The downtrend in prices was arrested with some markets witnessing an increase in demand. “In the past five years, bigger residential markets like Delhi-NCR (National Capital Region) and Bengaluru saw a marginal dip in average property prices while Mumbai, Pune and Hyderabad witnessed 2-3% rise rise in average prices, said a recent report by 360 Realtors and Liases Foras.

NEW DELHI: American hotel chain Hyatt Hotels & Resorts plans to launch 14 new properties in the next two years totalling 2,100 rooms. The new hotels in India will come up in Kochi, Thrissur, Udaipur, Bengaluru, Gurgaon, Dharamshala, Jaipur and Vadodara.

Despite the slowdown witnessed in India’s real estate sector that has brought in drastic changes in buying patterns amongst home and commercial property buyers, the industry continuous to be vibrant and strong on delivery and the businesses intact.
The sector has grown nearly eight per cent during FY19 as against the same period in FY18 even as financial pressures and fast changing dynamics of the industry has more or less created turmoil in the real estate market. Post-parliamentary elections from next month should have more demand and that will enthuse more interests amongst buyers and have its positive impact on the overall real estate market in the country.
Though there is a lot of discussions around how well will the real-estate perform and create value, the strong foot-holding that the sector has created over many decades will continue to ensure its niche and the goodwill that it brings with it. While demand for housing and commercial properties in some markets may have been subdued, properties that are good and at right location are worthy and showing value to buyers are selling. In year 2018, demand picked-up for residential housing and commercial businesses in top seven Indian cities namely the Delhi-National Capital Region (NCR), Mumbai Metropolitan Region (MMR), Pune, Kolkata, Bengaluru, Hyderabad and Chennai. Infrastructure developments has also complemented to the growth of real estate with slew of emerging micro-markets. Some of these projects include Pirangut in Pune Airoli in Navi Mumbai, Madhapur Nacharam in Hyderabad and many more such industrial hubs are seeing traction to demand for housing. These upcoming infra projects is opening up new avenues for homebuyers and developers.