2016 will see more PE investment in real estate

After the government eased foreign direct investment norms for the sector in 2015, Real estate companies are expected to raise more money from private equity funds this year. An estimated $4.8-billion was pumped into the realty sector via the PE route last year and according to experts, fund infusion in 2016 will well surpass this figure.

Real estate focussed funds propose to raise anywhere between $3 billion and $4 billion of private equity. However, the way these investments would be carried out in 2016 may differ from what has been happening in past few years. In 2015, a large part of the investment in real estate was debt or structured transactions. This is expected to continue in 2016, but it would be complemented by equity deals in the latter half of 2016.

According to Rajarshi Datta, asset management lead, Acquisory Consulting, “Taking an average investment cycle of eight years, these funds will have to deploy all the money in next four years, which means at least $1 billion will have to be invested in 2016.” Experts say the additional $1 billion that could be invested in the sector is over and above investments made by PE firms which are already sitting on funds.

Industry trackers say at least $1 billion will be raised in the first three months of 2016, which would be invested in the same year. Data obtained from venture intelligence notes that about $2.94 billion (Rs 19,420 crore) have already been raised by some real estate focussed funds.

Analysts say that both residential projects as well as corporate real estate will witness inundation of funds. While the residential segment will see consistent cash flows, the corporate sector will get an opportunity to optimise rentals for investors. However, prices of real estate may not get impacted across the spectrum; movement will be seen only in select pockets like NCR, Mumbai and Bangaluru.

Bengaluru has emerged as real estate capital of India

According to reports, Bengaluru has emerged as real estate capital of India with the major headlines of the day which dominate on national and international real estate market. Earlier, it was Mumbai, but now Bengaluru has overtaken Mumbai to become one of the most preferred real estate destinations for investment in India, as per the reports of PwC (PricewaterhouseCoopers) and ULI (Urban Land Institute).

Few Major Headlines from Leading Portals:

According to “Emerging trends in real estate Asia Pacific 2016” Bengaluru is one of the most preferred real estate capitals of India, published by “The Hindu”.

We all know that in our country, the major property market includes Bangalore, Mumbai and New Delhi and they are witnessing more appetite from NRIs and foreign investors for investments in real estate market, as per the rankings of these cities as perceived by investors, according to perception study of PwC (PricewaterhouseCoopers) and ULI (Urban Land Institute), published by “Economics Times”. According to reports of Economics Times, the State Government of Gujarat will consult all stake holders such as; real estate developers, while constituting the state RERA (Real Estate Regulatory Authority), as per the statement of Anandiben Patel, Chief Minister of Gujarat.

There are some pockets in Bengaluru residential market such as; Thanisandr and Panathur-Varthur are expected to see price appreciation of more than 55 percent and 61 percent respectively by the end of 2020, as per the reports of Knight Frank Report. A relaxed FDI policy for the real estate sector has reinforced the confidence of foreign investors and has helped the regions in India to become one of the most preferred investment destinations, as per PwC survey, published by “Economics Times”. Ulwe and Madh-Marve in Mumbai are among the top residential investment destination in country as it promise the property price appreciation of more than 70 percent and 90 percent by the end of 2020, respectively as per the reports of Knight Frank India¸ property consultancy, published by “Economics Times”.

BroEx, which is network of real estate brokers stated that it has associated with Rentomojo, which is an online furniture and appliances rental. After this association, BroEx distributed exclusive coupons to its clients on behalf of Rentomojo with an aim to enhance the end customer experience, published by “Hindu Business Line”. Apart from that Hilton Worldwide Holdings Inc. is also pursuing a spinoff of its hotels into real estate market through different investments and it is one of the moves which have become popular among companies who are looking for the way to slim down and boost their stocks, published by “The Wall Street Journal”.

Porperty Channel – MagicBricks Now

OK

Times Network is ready to launch India’s first housing and property channel known as “MagicBricks Now” and it is going on air from November 1, 2015.

On last Wednesday, officials from Times Network formally announced in New Delhi that they are ready to launch India’s first property channel “MagicBricks Now”. It is all set to go on air from November 1, 2015, and announcement was made in the presence of Union Minister of Urban Development, M Venkaiah Naidu.

According to M Venkaiah Naidu, “I am happy that now onwards there will be more focus on real estate sector and first time investors or buyers will have place to learn something in real estate sector. News and views should remain separate and it is expected that it will help to create the platform for the housing sector and it will help to tie up the government and real estate builders with an aim to create houses for all segments, to get succeed in central government’s mission “Housing for all by 2022”.

Why property channel?

In present the advertising market of real estate in India is about Rs 2,500 crore of which more than Rs 900 crore is garnered by the Times Group itself, especially in the print segment. And now by launching new channel MagicBricks Now”, the Times Group is attempting to increase the market share of real estate advertising as well as want to educate people about real estate trends and pricing factor. Faye D’Souza, the channel’s editor explained that how this new channel will focus on the end consumer with an aim to serve as a platform for the real estate development and infrastructure sector. The more he added that MagicBricks Now” will have singular focus i.e. to educate the end consumer.

How this new channel will deliver information and analysis?

This new channel will showcase rich array of programs which will range from debates to news bulletins and leadership insights to experts views and all about real estate market. These things will help the Times Group to keep the end consumer informed and on the same time to serve as a common meeting ground for experts, first time buyers, sellers, big investors, and real estate developers  who are looking for serious business in real estate sector.

MK Anand, MD and CEO of Times Network stated while explaining the positioning of the channel, “MagicBricks Now has been launched with sole ambition to guide the consumer through process and decision making process with the help of views, analysis and debate of real estate leaders and experts. In present, real estate is of paramount importance in the life of normal people and real estate market is full of jargon, confusion and complexities. “MagicBricks Now” will be first and best unbiased, trustworthy and most authoritative property channel in the Indian property market to help the consumers”.

Channel Programs:

The channel programs will include The Home Buyer’s Guide, The Vastu show, Real Estate Tycoon’s, The Property Guide, Property Hotline, The Interiors Show, of course, ‘The News’, every hour. However; the main spotlights of the channel will on the relevant issues such as; local civic amenities, national property, sustainability, and environment issues will make the channel accessible to all. The marketing campaigns for channel will be unfold post Diwali and MK Anand expects that there will be more viewership for MagicBricks Now in comparison of other English News channels. He expects the channel to reach on the break even in next 4 to 5 months.

While speaking about the association with Times Network to create new channel “MagicBricks Now” Sudhir Pai, CEO of MagicBricks.com stated that “Now onwards we will be the part of MagicBricks Now and we are delighted to be a part of this initiative. Our endeavor is to make our brand ubiquitous across media with an aim to provide real and trustworthy analysis and in-depth information to the consumers. And with this association we will leverage the visual appeal of television to communicate with end users through rich data and experts view”.

The channel will have four partners; Hiranandani, Magicbricks, Mantri and Lotus Green.