Altico to finance Mumbai & NCr projects for Rs. 130 cr

With a focus on senior secured lending to residential projects in the real estate sector across Tier-1 cities in the country, Mumbai-based NBFC, Altico Capital has closed two deals worth Rs 130 crore for residential projects in Mumbai and the NCR.

“We have closed an Rs 50 crore transaction with Noida-based Lotus Greens group for a residential project named ‘Arena I’, which is a part of a larger Sports City development in the city. And In the second deal, we have invested Rs 80 crore in Mumbai-based Shree Sai group for a residential project called ‘The Nest’ being developed in Andheri,” the company said in a statement.

“While the funding for the Arena-I in NCR will be utilised for construction of the project, Shree Sai will use the capital for refinancing the existing lender as well as for completing the construction of the project,” the release added.

“We are looking at last mile financing for projects in advanced stages of construction and sales,” Altico’s Chief Executive, Sanjay Grewal said, adding that the company will also evaluate and fund projects wherein corporate houses like  Godrej have tied up  under joint development arrangements  with existing land owners and developers to market and construct projects under their corporate brands.

Godrej The Trees Vikhroli East Mumbai

The launch of Godrej Properties flagship project ‘The Trees’ residential phase II in Mumbai has led to an increase of 2.4% in the company’s share price during intra day trading on Thursday.

Phase I of the flagship project was launched last year in November. The company in its filing states “In first phase, we saw rapid sales with 348 apartments representing 93 percent of total available units sold within one month of launch. The Trees is one of the largest real estate projects in Vikhroli, Mumbai. This second phase of residences contains a total of 256 apartments with a saleable area of approximately 32,000 square meters (3,44,000 square feet).”

The Trees is mixed-used development with a vast commercial space spread across over 9.4 acres.

Godrej Properties

In September 2015, Godrej Properties, the real estate arm of the Godrej group, sold 4.35 lakh sq ft office space at Bandra-Kurla Complex in Mumbai for an excellent valuation of Rs.1479 crore. In keeping with this buoyant mood, the realty firm is targeting a sales revenue of Rs.1500 crore this year through monetisation of other commercial assets in Mumbai, Kolkata and Chandigarh.

In this regard, Godrej Properties MD and CEO Pirojsha Godrej was quoted saying “We have commercial assets worth about Rs 1,400-1,500 crore in BKC, Kolkata and Chandigarh. We are targeting to sell these properties this year.”

Further he added that, “the company has completed the construction of its commercial properties at Kolkata and Chandigarh, while the BKC project would be completed in next 3-4 months.”

About 3 lakh sq ft of office space still continues vacant in the BKC project and about a million sq ft of commercial space in Kolkata and Chandigarh for Godrej Properties.

The realty firm has recently entered the Noida market by partnering with local developer Lotus Greens to launch a residential project in the coming fiscal. Under the project, the firm is looking towards constructing about 3000-4000 flats in a phased manner.

Despite the downturn in the market, the company has been able to achieve a sales booking of more than Rs.1200 crore for the third consecutive fiscal of the current quarter. During the nine month fiscal, Godrej properties have improved the sales booking for the corresponding year-ago period by 96% to Rs.4,422 crore.

The company recently reported a 10 per cent increase in its consolidated net profit at Rs 51.99 crore for the December quarter as against Rs 47.24 crore a year ago. Operational income during Q3 declined to Rs 422.27 crore as compared to Rs 519.30 crore in the same period of the previous year.

With an eye on further expansion, the company is developing residential, commercial and township projects spread over 115 million sq ft in 12 cities.

Muscat to host 6th India Property Fest

After the extraordinary success of the last five editions of the India Property Fest, Adsync LLC is all set to host its flagship property show in Muscat this time. The company, which is an established property expo organizer in India, has been arranging this property fest since 2013. The sixth edition is scheduled for April 15 & 16, 2016 at Holiday Muscat in Muscat, Oman.

The 2-day property exhibition is positioned to provide the perfect platform for the opulent NRI community in the Sultanate of Oman to experience an array of real estate offerings by premier developers from India that suit every budget. The show would enable buyers to understand the pulse of property markets in India and view exclusive and featured properties in tier I, II and III cities and towns. Consumers will have a wide range of choices as the show will focus on cities such as Bengaluru, Mumbai, Delhi, Pune, Navi Mumbai, Chennai, Hyderabad, Mangaluru, Gurgaon, Noida, Coimbatore, Kerala, etc.

Best of Indian developers, real estate agents and financial institutions will participate in this property show. Developers like Godrej Properties, Lodha, Tata Housing, L & T, Mahindra Lifespaces, Mantri Developers, Puravankara, Goel Ganga, Rustomjee, K Raheja, and Sapoorjee Palonjee are only a few names from the Indian contingent. ICICI Bank and Bank of Baroda will represent the financial sector for lending purposes.

The sixth India Property Fest is a must visit show as for the first time, Adsync Advertising has ventured into international real estate arena. The exhibition also promises to present lucrative investment options from Damac Properties, Emmar, and Danube Properties from UAE among others.

Property investments are always believed to be the smartest investment move. India Property Fest comes in at the right time to offer an unparalleled opportunity to NRIs in Oman to leverage the power of their additional income more so when the value of rupee is depreciating and real estate companies are promoting attractive schemes & discounts.

Godrej Properties’ first project in Noida

Although Godrej Properties has already developed six projects in the National Capital Region (NCR), this is the first time it is entering the Noida real estate market. The company will be developing a group housing project within Lotus Greens Sports City in Sector 150, it said in a statement.

The project which spreads over 36 acres, will offer four million sq ft of saleable area consisting of apartments with diverse configurations. The Godrej Properties site is within a 300 acre integrated sports city township being developed by Lotus Greens Developers Pvt Ltd.

While NCR, India’s largest property market has been the worst hit by the slump in the property market, Noida has been the only pocket that has performed well in terms of sales. Pirojsha Godrej, managing director and chief executive, Godrej Properties said, “We have seen strong growth in the scale of our operations in NCR and now look forward to taking advantage of this momentum in Noida also.”

commercial real estate

In most recent realty news, southern real estate developer, RMZ Corp is in the advanced stages of negotiations to acquire Equinox business park in Mumbai from the Ruias of Essar Group. Sources familiar with the development confirmed that the transaction has been concluded for a monstrous Rs. 2400 crore. While billionaire brothers Shashi and Ravi Ruia are divesting non-core assets to pare Essar’s debt burden, this is by far the largest real estate deals of Mumbai and one of the biggest in India.

Bangaluru  based RMZ, backed by Qatar Investment Authority (QIA), will pay around Rs 19,000 per sqft for Essar’s 1.2 million sqft biz park, located adjacent to Bandra Kurla Complex which houses lessees like IDFC, Tata Communications, Crompton Greaves, Nissan and Lafarge among other Essar companies. RMZ manages about 20 million sqft of commercial office space across multiple cities and is currently on the prowl for large acquisitions to build an 80 million sqft portfolio in the next five years.

Anshuman Magazine, chairman and managing director, CBRE South Asia, notes that The Essar – RMZ deal shows an improvement of interest in commercial real estate. Such core rental yielding assets have lower risks associated as there is no pressure of development and leasing.

Anuj Puri, JLL India chairman and country head,  said in spite of the various influences that shape up real estate markets across India, Mumbai’s intrinsic equity as India’s financial capital remains undiminished and continues to drive major decisions by corporate and investment houses.

In some of the other large transactions, GIC of Singapore acquired 69% stake in Nirlon, which manages a 2 million sqft office park in Goregaon suburb, for 1300 crore in December 2014.

About two months ago, pharmaceutical conglomerate Abbott acquired 4.35 lakh sqft of commercial space in a tower developed by Godrej Properties in Bandra-Kurla Complex for Rs 1,479 crore.

In another massive multi-layered deal in office real estate market, Brookfield purchased Unitech’s Corporate Park for Rs 2050 crore  for majority control of six parks in NCR and Kolkata. Furthermore, Embassy Office Parks, backed by Blackstone, acquired Vrindavan Tech Village in Bangalore for Rs 1950 crore.

India’s large grade office buildings, riding on a robust services economy, have returned stable yields to investors in an otherwise volatile real estate market. Assets worth nearly $3 billion have together been acquired by global investors like Canadian Pension Plan Investment Board, Brookfield Asset Management, Blackstone  and Middle East sovereign funds among others during the last calendar year.

RMZ Corporation Banglore

Essar is in initial negotiation stage with real estate developer RMZ Corp to sell its Equinox Business Park, which is located in Mumbai. According to sources the price of deal will be about Rs 2,400 crore, or $ 360 million. In recent years, this could be the biggest commercial real estate deal in the MMR region as billionaire brothers Ravi Ruia and Shashi Ruia are divesting their noncore assets to repay the debt of Essar.

Equinox Business Park, which owned by Ruia family is located adjacent to Bandra Kurla Complex and it is the house of leading market players such as; Nissan, Tata Communications, IDFC, Crompton Greaves and Lafarge and of course Essar companies as well. However; Bangalore based real estate developer RMZ Corp is backed by the QIA (Qatar Investment Authorit) and it is expected that it will pay about Rs 19,000 per sqft for Equinox Business Park, which is spread on an area of 1.2 million sqft. It is expected that RMZ will conclude the deal in tow equal stages over the period of six months. It will be 100 percent acquisition from both parties as both parties will meet certain milestones in their business. According to Manoj Menda, Vice Chairman of RMZ, “We confirmed the rumors of deal, but at this point of stage we cannot comment”, however; on the other side Essar declined any comment. According to statement of Anshuman Magazine, Chairman and Managing Director of CBRE for South Asia division, “This deal shows that how commercial real estate is generating interest among real estate developer, especially when it comes to core rental yielding assets. The risk associated with these kinds of properties is much lower than the fully constructed properties where there is no pressure of development and rentals”.

Currently, RMZ is managing about more than 20 million sqft of office space in different cities and now this real estate developer is looking for some large deals to acquire more space in commercial segment as RMZ aims to build a 80 million sqft portfolio in the next three to five years. RMZ’s this acquisition is one of the largest and latest among the series of high profile office space deals because some global investors such as; Brookfield Asset Management, GIC of Singapore, Canadian Pension Plan Investment Board¸ Middle East and Blackstone are over sign a funds to down transaction opportunities in the India. In last calendar year these global investors have acquired assets worth $ 3 billion. In present all the major global real estate developers seeing Indian real estate market as a golden opportunity as in India “Grade A Office” buildings are riding on a robust services economy. Anuj Puri, Chairman and Country Head of JLL India stated that in spite of different influences which shape up real estate markets in India, inherent equity of Mumbai as India’s financial capital remains undiminished and it is expected that it will continue to drive major decisions by large corporates and investment houses.

In December 2014, GIC of Singapore was acquired 69 percent stake in Nirlon and currently it is managing 2 million sqft office space in Goregaon suburb and its cost is Rs. 1300 crore. Apart from that we all know that last month pharma MNC Abbott was acquired .35 lakh sqft in one of the commercial tower at BKC which was developed by the Godrej Properties and cost of deal was about Rs 1,479 crore. It was considered as the biggest transaction for any single user commercial real estate in India.

However; Brookfield’s Unitech Corporate Parks acquisition was seen as the biggest acquisition in Indian office space market. However; it paid Rs 2050 crore for majority control of six parks in Kolkata and NCR. Apart from that with undisclosed amount they also buy 40 percent holding in Unitech.

Real Estate market of Mumbai

Now some of the buyers are finally returning to the real estate market of Mumbai, as real estate developers are offering 5 to 10 per cent discount and other offers as well such as; foreign trips, free parking space, free car, free AC and more. Now in Mumbai’s real estate market due to reduced size of apartments and falling interest rates now it’s easy to sale the residential property and now currently home sales in Mumbai is 28 percent more in comparison of last four quarters, as per the reports of JLL India.

According to the Ramesh Nair, COO of JLL India, This is the balance of factors as; interest rates are dropping and real estate developers are offering huge discount, freebies with attractive schemes, sizes of apartments are dropping to make the apartments more affordable, buyers are thinking that market is all time low and it have bottomed out and all these factors lead towards the overall marginal improvement in the confidence of customers”. However; as per the trend it’s clear that in few launches people prefer to buy residential units whereas; in broad market there is no progress. Local property markets are not convinced with the latest numbers and statement that real estate market continues to be sluggish and these numbers may or may not be reflect an improvement in end-user sentiments.

According to Yashwant Dalal, President, Estate Agents Association of India, “In present, resale segment is seeing thin volume and even in primary market new launches, financial institutions are underwriting inventories. The more he added that we have the last year numbers and this year its much more than the last year”. As per the JLL India report, “Real estate developers in Mumbai have managed to sell more than 16,990 units in new projects in primary market in the duration of last four quarters, which ended on the September 30. And in previous four quarters the sales of residential units were 13,290 apartments. In slow market it is the sign of improvement and it has released the pressure on real estate developers. Due to weak price and more supply than demand in the market, real estate builders are shying away from the launching of new projects. However; the new launches in the first six month of 2015, was declined by 26 per cent from a year ago. As per the local brokers, real estate builders would prefer to hold the supply as well as construction than reduce prices and incur losses.
According to real estate market expert JLL India is not expecting rise in the price of houses for next two to three years as still builders are focusing on the inventory cleaning. In past few months we have seen some price correction which happen in last quarter, but capital values have not gone up. According to local brokers, real estate developers would prefer to hold the supply and the construction in different projects to bring down the price and incur losses. However; real estate developers are maintaining affordability of apartments just by reducing the size of residential units with the average reduced size of roughly 6 per cent annually.

Performance in Stock Market:

There are many real estate developers which are listed in stock market such as; DB Realty, Oberoi Realty, Hubtown, Mahindra Lifespace Developers and Godrej Properties and they are operating in Mumbai. The hottest property markets in the country have declined by the rate of 214 per cent in the past one month. According to real estate analysts, the second half of the financial year will be better for the organized players as they are ready with new launches to erase the debut. As per the statement of Samar Sarda, Lead Analyst in Real estate Segment at the Kotak Institutional Equities, “The overall real estate market will continues to shrink and most organized developers will get the more growth and gain in terms of market share.

Godrej Properties Launches ‘The Trees’ in Vikhroli

Godrej Properties on Thursday launched The Trees, a flagship project spread over 34 acres of land, the Mumbai based real estate arm of the Godrej Group said in a report filed with the BSE.

In the first phase, the company plans to develop a residential project that will have a total of 374 apartments with a sale able area of nearly 5 lakh square feet.

The Trees consists of 1 BHK, 2 BHK, 2.5 BHK, 3 BHK, and 3.5 BHK apartments with carpet areas ranging from 480 square feet to 1,334 square feet. The project will also build Penthouses with carpet areas ranging from 2,043 square feet to 2,465 square feet.

The shares of Godrej Properties jumped nearly 5 per cent intra day on the news of this launch.