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Now the overseas firms such as; APG, a Dutch Pension Fund Manager and Warburg Pincus, a US Buyout Group are looking for an opportunity to invest in the Indian warehouses with a hope to cash the demand for efficient and modern storage space as in past few years Indian has recorded great book in online shopping.

Godowns vs Warehouses:

In present the country’s logistics and warehousing sector is stretched to $ 110 billion as more and more Indians are coming online for shopping and other activities. Existing spaces, which was famous with a name “Godowns”, a low rise sheds with poor infrastructure and ventilation to ward off heat and dust are too old and out of dated for the retail giant such as; Amazon.com and its core rival Flipkart or Snapdeal. According to experts retailers never prefer to use these Godowns because on these places goods frequently get spoil or soiled. Apart from that now e-tailers are looking for the way to move their goods swiftly with minimal damage and due to that they demands for climate control, levelled loading bays, fire sprinkler systems and paved roads to warehouses. If you have existing warehouse, so after adding these facilities you can lift the rents by up to 20 percent, as per the statement of the JLL, a real estate firm.

Growth in e-commerce sector:

According to Ben Salmon, Head of Singapore-Based Assetz Property Group, “We have got many people around us who have bags of money, but not that much assets”. The more he added that Assetz Property Group has raised $ 50 million from Asian investors with an aim to buy warehouses on Indian soil. Meanwhile, e-commerce sector in India is booming and it is expected that by the end of 2025 the market will grow in terms of value of goods sold will be about by $ 220 billion and it is expected that for this years the value of goods sold will be $ 11 billion, as per the reports of Bank of America Merrill Lynch. Demand of these kinds of warehouses is good news for property developers in India as most of the real estate developers are doing business with high debt and struggling with sluggish residential sales. For the duration of 2009 to 2011, the office leasing was slower.

As per the estimates of JLL India, to satisfy the above requirements, the supply of modern warehouses in India can be get double by 2020 with 200 million square feet space, which will be fuelled by online retailers as they have already taken up 20 percent of the space in the first half of 2015. The more demand will push the rents which are about 156 rupees ($2.34) a square foot a year in some city outskirts, but this rent can go up by the 20 percent, as per analysts. Whereas; in present, the average annual returns In UK for industrial assets are expected to be 10 percent by next five years, as per the reports of Colliers International, a real estate firm.

Needed facilities in warehouses:

In New Delhi, there are many steel-framed, large and modern warehouses, which have ventilation as well as 24 hour security, but retailers and logistics firms are line up to serve the country’s capital. Amazon is one among other retailers, who want to own large, modern, white and red warehouse as Godowns are increasing their size from family garage to a basketball court. It is noted that Amazon India has leased more than 20 fulfillment warehouse centers where company is used to store goods and packs the orders from many different landlords. However; still company is looking for bigger, modern spaces with the average size of 200,000 square feet.

The e-commerce has attracted more than $ 1.5 billion through private equity funds since year 2011, as per the data of Venture Intelligence. Whereas; Embassy Group and Warburg are jointly planning to invest $ 250 million to lease, operate and build a portfolio of up to 20 million square feet of warehouses in next 5 to 7 years, as per the statement of Anshul Singhal, CEO of Joint Venture and Embassy Industrial Parks.

According to Sachin Doshi, Head of its private real estate investments in Asia Pacific, “APG is also looking for a local partner who can invest in the build logistics parks in India”. No doubt there are some basic challenges for investors who want to acquire land as ownership cannot be disputed. Major real estate developers like; Assetz is betting on buying larger existing warehouses in the market rather than building warehouses from the scratch. After previous investments, now Assetz is planning to raise $ 100 million to buy 10 million square feet of warehouses space.

Real estate sales record 2015

One of the leading real estate firm Prestige Estates Projects Ltd record more than 13 per cent sales increase in booking at Rs 5,013 crore for the fiscal year 2014-15.

On the March 31, 2015 the fiscal year ended for company and it record the sales of 4,058 residential units with more than 0.81 million sq ft of commercial space with total space of 7.73 million sq ft, of about Rs 5,013.5 crore of sales and t was up by the 13 per cent from the last fiscal year. Prestige Estates Projects stated that it collects total Rs 3,884.3 crore during 2014-15 which was up by the 32 per cent in comparison of last fiscal years.

In the FY 2014-15, the company has launched 14.63 million sq ft developable area and it delivered 8.92 million sq ft of area in the duration of FY 14-15. However; Prestige Estates stated that it has delivered the 8.92 million sq ft area out of targeted 10 to 12 million sq ft area.

Godrej properties is planning to launch 14 new projects in the current year

India’s leading real estate firm Godrej Properties is going to monetize commercial assets of worth Rs 2000 crore in the period of next two to three years to reduce the debt.

Apart from that now company is also planning to launch the 14 new projects in the current year to explore the more opportunities and more residential as well as commercial projects of the future development, as per the statement of Pirojsha Godrej, CEO and MD of Godrej Properties. The more he added that our debt is increasing and it’s about Rs 2,750 crore at the end of March 2015, but still hopes that by selling commercial properties of worth Rs. 2000 crore in next 2 to 3 years we will reduce the burden of debt.

On March 31, 2015 the net debt of the company was about Rs 2,764 crore however; at the end of December 2014 it was Rs 2,605 crore. Apart from that one of the Mumbai based local real estate developer is construction the large commercial project known as the Godrej BKC at the Mumbai and apart from that two or three more commercial projects are coming up in the city Chandigarh and Kolkata. Godrej said that our proposed launches are the 14 projects hich are in the current fiscal and out of them 7 will be in the Greenfield projects whereas; other seven will be the new phase in other existing projects. But still Godrej has not given any guidance on sales booking for the projects which are set to launch for the year 2015 and 2016.

However; company has achieved the volume of sales booking of Rs 2,681 crore or 3.9 million sq ft area in last fiscal. it has also received the record annual residential sales with the worth of Rs 2,400 crore or 3.6 million sq ft in the year 2014 to 2015. According to the Godrej officials now company is looking for the new projects in current fiscal through the joint venture with different land owners. The more they added that we are exploring the new opportunities in the real estate sector in the city which are present. We are also focusing on the micro markets such as; Delhi/NCR and Noida.In 2014 to 2015 the company has launched the five new projects with the saleable area of 8 million sq ft.

Godrej Properties is the only realty firm of the Godrej Group, which is currently developing commercial projects, residential projects and township projects which are spread on the area of more than 108 million sq ft in more than 12 cities. However; Godrej properties record the 20 per cent rise in the net profit which was Rs 190.90 crore against the Rs 159.43 crore in the previous year, whereas; the total income rose by 54 % which was about Rs 1,926.56 crore for the year 2014 to 2105.

Supertech to raise Rs 500 crore

The leading real estate firm Supertech is planning to list its six of the rented as well as operational malls with REIT (real estate investment trust) to raise Rs 500 crore in the duration of next two years which is the year 2015 and 2016. As per one of the latest survey Supertech has more than 2 million sq ft of retail space in its six malls out of which two are in Ghaziabad and one each is in Noida, Rudrapur, Haridwar, Rudrapur, and Meerut.

However there are few products under construction by Supertech. Currently Supertech is in discussion with one of the Singaporean company which has experience in setting up the real estate investment trust in various real estate markets. As per the statement of officials we are in the starting stage for the listing of our assets and REITs own the properties to get the rental income and distribute it among investors. For real estate investors they provides high dividend with a liquid option where one can invest in the real estate sector.

Most of the real estate firm in the country and as well as some of the private-equity funds are showing interest to set up the REITs because stock market regulator SEBI (Securities and Exchange Board of India) notified its rules to list the trusts in September 2014 with a aim to view and attract more and more funds in a transparent manner, so that real estate developers can pool the money for the development of new projects. But till now no REIT is listed in India and it’s just because the lack of clarity in taxation process. With a aim to encourage local listing, central government is decided to do some capital gains in the favor of sponsors in the Union budget of 2015 at the time of listing of REITs on rental income.

However the capital gain will be applicable for all the direct transfer of same or different assets to any kind of these trusts. But still the budget is not offering any clarity on dividend distribution t as. The major real estate developers such as; RMZ, DLF, Embassy Office Parks, Ambience and many others with PE firms such as; Kotak Realty Fund, Red Fort Capital and Blackstone is known for listing their assets as REITs. They have develop the acquired rent producing assets in past few years as it could attract more than $1 billion or Rs 6,280 crore in 2015 witht eh additional tax benefits announced in the union budget of 2015, said the property consultant from JLL India. However most of the property experts said that in near future more exemptions can be made by the state as well as central government to make its segment more attractive for real estate players.

But it’s clear that the Capital gains taxes will exempted on the transfer of any SPV (special purpose vehicles set up to carry new real estate projects) share by different or same sponsors but at the MAT ( minimum alternate tax) is still applicable. If the minimum alternate tax will be so it will make REITs more attractive for real estate developer, says Shweta Aggarwal, Director of BMR & Associates.

Supertech is planning to invest amount Rs 2, 400 crore

Leading developer, Supertech is planning to invest the hard cash amount of Rs 2, 400 crore to construct and develop the township at Gurgaon, Haryana in a span of five years. This township will be developed on an area of 140 acres land, which company has bought recently from Parsvnath Developers.

As per the statement of Mohit Arora, Managing Director of Supertech, “Recently our company has done dream deal, which is to buy 140 acres land from Parsvnath Developers; however the cost of deal was about Rs 7, 00 crore”. Supertech, which is one of the fastest growing real estate firm based out Noida will develop advanced integrated township on this land area at Sohna, Gurgaon, the more he added.

In an integrated township, Supertech is planning to develop more than 1,800 independent homes as well as villas and more than 1,900 flats, however it will be the fourth largest project of the company. While talking about investment Arora stated that it is expected that total cost of township will be about Rs 2,400 crore including Rs 700 crore of land cost. The more added that we have made payment for land and we are planning to raise Rs 500 to 700 crore from bank debt to meet the cost of construction; however the rest will be founded through internal accruals as well as sales bookings in project.

The whole township will be developed in different phases and it is expected that whole construction will be completed by year 2020. Supertech has fixed the BSP (Basic Selling Price) for this particular township project, is Rs 4,400 – 4,750 per sq ft and it will also depand on the payment plan. In September 2014, Parsvnath Developers had sold the land to Supertech in a deal of Rs 665 crore.

Till now Supertech has completed the construction for more than 33 million sq ft real estate in different projects and currently company is working on 90 million sq ft area in many different projects. Apart from Greater Noida or Noida or as well as in Gurgaon, Supertech has also marked its presence in other cities also such as; Rudrapur, Moradabad, Ghaziabad, Meerut, Bengaluru, Haridwar and Moradabad.

Thane Municipal Corporation (TMC)

Nearly after one month Thane Municipal Corporation (TMC) issued a notice to Concord developers, which is one of the real estate developer, whereas; this notice was under the Maharashtra Regional and Town Planning (MRTP) Act, Suraj Parmar, who is chairman of the firm accused the TMC for adopting dilly-dallying tactics to give permissions for finished projects.

Suraj Parmar is also the president of the Maharashtra Chambers of Housing Industry, Thane unit, stated that before a year, our real estate firm had applied for OC (Occupancy Certificate) for the project of Cosmos Horizon at Pokhran Road, but instead of giving the reasons for holding the permission, TMC (Thane Municipal Corporation) issued Maharashtra Regional and Town Planning (MRTP) notice and due to that I had paid fine to the TMC. The developer blames that few authorities of TMC that they are harassing real estate player without any reason.

However, civic officials of TMC refuted the charges by stating that the MRTP notice was issued according to the provision of rules.” TMC had initiated the action against Concord developers as the developer, in one of his projects; they had allegedly handed over possession to flat owners despite without having the mandatory OC.

Meanwhile, on last Thursday, Vikrant Chavan, Congress group leader in the TMC wrote a letter to TMC chief and requested that TMC should take stern action against erring developers in Thane. “It is a serious matter that the head of MCHI, Thane is not complying with the norms” whereas; in reply Parmar clarified that “few people with vested interests are trying to malign the image of our firm”.