20 big, 87 smaller malls on anvil in Hyderabad

Source : Financial Deccan Chronicle Dt: May 4th, 2014.

The mall scenario in Andhra Pradesh, particularly in Hyderabad, is evolving. Four malls are getting ready to be launched within three years and more are in construction or planning stage.

“There are 20 big and 87 smaller malls coming up in Hyderabad, varying with their classification. Some of them are nearing completion while some are stuck because of the slowdown in real estate and retail markets,” according to Anand Sundaram, chief executive officer, Pioneer Property Zone, a firm that specialises in mall management and allied activities.

Typically, malls takes upwards of 60 to 70 months for achieving break even. Many prefer to sell the retail space outright instead of creating an annuity-based asset, he said.
_________________________________

HMDA Plots

www.hmdaplots.blogspot.com
__________________________________
In Singapore and other places, the mall space ratio is about 30 sqft per person. In India, it is two-sqft mall space per person and in Hyderabad it is about one sqft mall space per person, Sundaram said.

PPZ now manages 13 assets in multiple cities and has added five more projects in Hyderabad recently, for which it will be involved in concept and design, finding anchor and other tenants, deciding on the shop sizes and domains, maintenance of the mall, enhancing foot falls and others.

The projects include the Secunderabad Central Mall at Patny (gross building area of 3,50,000 sqft for retail and entertainment) and Odean Mall (2,10,000 sqft) at RTC X Road in Hyderabad, both by Shanta Sriram Constructions, Youdan Plaza (1,05,600 sqft of gross building area at Abids) by Youdan Infrastructure Projects and one more project, the Kompally Mall.

“Shopping has been traditionally done only in the high streets. The Secunderabad Central Mall hopes to change the shopping experience and range of offerings,” he said, adding that it is likely to take a year or so for completion.

The Odean Mall will be a mid-segment one with a mix of junior departmental anchors, fashion anchors and F&B. The other two malls too are likely to be open to public in 2017.

It already is managing Manjeera Mall at Kukatpally, operational since 2013. Spread across 4.7 lakh sqft, Manjeera Mall has four floors of shopping options in a mix of international and local brands, F&B chains and multiplexes. It will relaunch this after making some changes in about six months.

New malls are coming up in Vijayawada and Visakhapatnam and other areas, Sundaram said.

Demand for office space in Hyderabad to remain subdued in short-term: CBRE

Business Line, May 2,2014. 

The demand for office space is projected to be subdued in the metropolitan area of Hyderabad but relatively buoyant in the IT hubs and corridors, according to real estate consultancy CBRE.

Anshuman Magazine, Chairman and Managing Director of CBRE South Asia, in his analysis states that the demand for office space in Hyderabad is likely to remain subdued in the short-term as corporate occupiers are expected to maintain a cautious outlook amid an uncertain economic and political environment.

Commercial leasing

The IT and extended IT corridor are likely to remain the most active micro-markets for commercial leasing activity in the city. From a supply perspective, around 2.8 million sq. ft. of IT/IT SEZ supply is likely to reach completion in these micro-markets by the first half of 2014.

This significant supply pipeline, coupled with subdued demand levels, is likely to push up vacancy rates, keeping rental values range-bound in the short to medium term.

During 2013, the commercial office market of Hyderabad witnessed leasing activity of 3 million sq. ft., primarily driven by corporate occupiers from the IT/ITeS sector.

The western micro-markets of the IT corridor (Madhapur, Kondapur, HITEC City and Gachibowli) and the extended IT corridor (Raidurg, Manikonda, and Nanakramguda) remained the most active commercial hubs.

IT corridor

The IT corridor continued to attract greater interest from corporate clients in the first quarter of 2014, with significant under-construction developments being pre-committed for space take-up by corporate clients at Madhapur and Kondapur.

While rentals remained stable in the commercial and IT office space segments of this micro-market, it appreciated marginally by 2-3 per cent for select IT SEZs on a quarter-on-quarter (q-o-q) basis. Rentals in the micro-market remained stable.

In the first quarter of 2014, the central business district of Begumpet, Punjagutta, Somajiguda and parts of Banjara Hills saw sluggish office space transactions.

Rental values and vacancy rates remained stable because of limited demand and the absence of any fresh space addition.

Peripheral areas of Shamshabad, Uppal and Pocharam saw sluggish leasing activity during Q1 2014.

Samooha Aerospace Park work set to begin at Hyderabad aerospace SEZ

Source: The Hindu Business Line Nov 1st, 2013

The country’s first Aerospace SEZ is all set to take off with a committed investment of Rs 1,500 crore.

With land allocated to 24 companies, the facility, situated in Adhibatla, about 15 km from the Rajiv Gandhi International Airport, on the outskirts of Hyderabad, will see action beginning on November 4.

At least half a dozen companies will begin work on that day, when the Andhra Pradesh Chief Minister, Kiran Kumar Reddy, is expected to kickstart activity at a foundation laying function.

Creating employment

The ambitious Aerospace & Precision Engineering SEZ will provide the infrastructure for these units to manufacture a range of products needed for the strategic sectors of aerospace, nuclear, space and defence.

The venture can provide direct employment of 10,000 and indirectly to another 18,000 in the next three years, as these manufacturing units, turn fully operational. The projected annual turnover is Rs 2,500 crore and exports to the tune of Rs 400 crore.

SMEs setting up shop

Among the two dozen SMEs that have taken land are Motion Dynamics, Gagan Aerospace, Aeroc Space Tech, Hemmair, Apollo Aerospace, DSR Tech, Lokesh Machine Tools, Gowra, Ratna Tools, Castall Tech, Compu Power, Rolon Seal and Revathy Industries, said M.M. Sreeram, Executive Director of Samuha Engineering Industries.

Samuha is a consortium of aerospace Industries, which will anchor the development of the aerospace park. MTAR, SEC Industries, Ananth Technologies, Zetatek, Scarlet and SKM Technologies are the main promoters.

At present, the Tatas have made major investments in a couple of ventures in the area, including in the SEZ. In the joint venture with Sikorsky, it manufactures helicopter cabins.

"The existence of a large number of SMEs with diverse expertise in Hyderabad has drawn the Tatas in a big way. Similarly, several other multinationals are showing keen interest," Sreeram said.

Offset provides big scope

The Andhra Pradesh Industrial Infrastructure Corporation (APIIC) has allocated 193 acres at Adhibatla. Of this 100 acres will be for the SEZ for which the corporation is a co-developer.

The 93 acres in the Domestic Tariff Area (DTA) has been allotted to Samuha as a lead developer and to allot land to other member units, explained Jayesh Ranjan, Managing Director of the corporation.

The Aerospace SEZ will be the country’s first operational facility developed in an integrated manner. Samuha will develop this cluster, he said. Industries will share expertise and strengths in a symbiotic manner to meet big demands, especially that will emerge from the Defence offset policy and other strategic sectors, he told Business Line.

Thousands of crores of business is expected to flow to Indian industry as the offset makes it mandatory for winners of big defence contracts to source at least 30 per cent of the value from domestic industry/institutes.

As part of its effort Samuha will provide a Common Test Facility, Training Centre and Common marketing, HR, and Procurement facilities, exhibition and guest facilities, labs said Sreeram. The equity of the shareholder units will be in proportion to the land holding, he added.

IDFC Alternatives raises Rs 750 crore real estate fund

Source: ET 20/03/2014

IDFC Alternatives, a wholly owned subsidiary of IDFC Limited has raised its first Rs 750 crore through its first fund focused on residential sector in India, a progress that marks a precautious return of risk capital to the country's stressed real estate market.

The maiden real estate fund - called the IDFC Real Estate Yield Fund - will invest Rs 60 to 80 crore and gross target of 22 per cent returns. The four year (extendable by one year) close-ended private equity fund will invest in projects in prominent locations across six cities in India including Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Pune.

"This is our first real estate fund and we feel confident about its performance. The real estate sector is going through a tough phase in the backdrop of a market slowdown and most developers are stretched with reduced cash flows. We will not invest in speculative markets," says M.K. Sinha, Managing Partner & CEO, IDFC Alternatives. The firm is looking to step up presence in the country's real estate sector.

IDFC Alternatives, one of the largest multi-asset class fund managers with a corpus of Rs 14,414 crores, managed to raise the money from domestic investors within short span of 10 weeks. "This is the right time to plough money into the sector and structure transactions that will provide high yields going forward," says Sinha.

Andhra Pradesh favours illegal estates, shows irregularities: Report

Deccan Chronicle 10/03/2014

Hyderabad: The vigilance and enforcement department has exposed various loopholes in the revenue, panchayat raj, municipal and registration departments, which have resulted in loss of crore of rupees  as the officials favoured real estate companies who developed illegal layouts.

These departments have not been updating the prohibited list of government lands, which has resulted in real estate companies laying hands on assigned lands, and there was no monitoring of unauthorised layouts in panchayats.

The vigilance department has come out with several recommendations to the government departments, to correct the system, after finding that the city-based Janaharsha realtors had committed irregularities in violation of all existing rules and evaded requisite fees, such as nala conversion fee, amounting to `6.73 crore, layout processing fees, and development fees, causing huge loss to the government.

The vigilance department alleged that Janaharsha had purchased vast extents of agricultural land in Ibrahimpatnam and Manchal mandals, in RR district, and failed to secure mutation in the revenue records. The company did not file declaration before the revenue divisional office for acquiring land exceeding the ceiling limit.

When contacted, director-general of vigilance and enforcement R.P. Thakur said he had received the report from the Hyderabad rural regional unit regarding Janaharsha irregularities.

The report alleged, “An extent of two acres of reserve forest land at Naganpally block was encroached by Janaharsha, exploiting the existing difference between the boundary lines fixed by the forest officials initially, by way of trenching and later erecting pillars. Forest officials failed to protect the lands. A loss of `3.9 crore was detected on unauthorised consumption of minor minerals found, apart from 6.73 crore loss. It has acquired 535 acres of Bhoodan land and 266 acres  assigned to bonded labourers.”

The department has asked the government to devise penal procedures to initiate actions against illegal layouts. It also suggested integrated software for all the departments to avoid violations. The department asked the government to issue instructions, to collectors, to update the prohibition of transfer of state lands’ lists, including assigned lands, Bhoodan lands and lands acquired  by the government.

Hyderabad least expensive office market in 2013, says DTZ global report

Live mint & Wall street journal
3 March, 2014

Chennai, Pune, Bangalore and Kolkata were also among the 10 least expensive office markets in 2013, says the report
________________________________________
Ad
Plots at Uppal, Boduppal, Medipally, Pocharam
Visit: www.bhagyanagarproperties.blogspot.in
_________________________________________ Hyderabad slipped a rung to become the least expensive office market in 2013, according to a new global study, mainly because of the prolonged strife in Andhra Pradesh over the formation of Telangana state.
Chennai, Pune, Bangalore and Kolkata were also among the 10 least expensive office markets in 2013, according to property advisory DTZ Research’s latest Global Occupancy Cost-Offices report.
Hyderabad, which was the second-least expensive office market in 2012 behind Surabaya (Indonesia), was at the centre of the four-year Telangana dispute.
Last week, Parliament passed a Bill for Andhra Pradesh to be split into Telangana and Seemandhra, with Hyderabad serving as the joint capital for 10 years before it is transferred exclusively to Telangana.
“Hyderabad has been mired by the Telangana issue and political instability because of which not many new occupiers have come in the last two years. Even with the Telangana Bill being passed, it’s a far cry from being business as usual,” said Rohit Kumar, head of research, DTZ India.
The DTZ report analysed the costs of occupying prime office space across 138 markets worldwide. Occupancy costs in the most expensive office markets exceeded $20,000 per workstation in 2013, and were less than $3,000 per workstation in the least expensive markets.
No Indian city features in DTZ’s 10 most expensive office markets list, even as rents and occupier interest in prime central business districts (CBD) in Mumbai and Delhi were robust last year.
London and Hong Kong continued to be the most expensive office locations in 2013. But the difference in costs between the two cities expanded from 13% in 2012 to 22% in 2013 as buoyant demand led to an increase in rents in London while cost-cutting measures in central Hong Kong drove rents down.
Surabaya saw office rents increase last year, pushing it a step higher to be the second least expensive office market in the DTZ study, swapping spots with Hyderabad.
In 2013, about 27 million sq.ft. of office space were absorbed across the seven Indian cities surveyed for the DTZ report—Delhi-national capital region, Mumbai, Bangalore, Chennai, Pune, Hyderabad and Kolkata—slipping marginally from 27.3 million sq.ft. in 2012.
But DTZ said in its report that rising demand for office space from information technology companies and high inflation is likely to push up occupancy costs in India this year.
Of the Rs7,000 crore of private equity money that flowed into Indian real estate in 2013, Rs2,476 crore was in commercial office assets, down from Rs3,231 crore in the year before, says a report on PE investments in real estate by property advisory Cushman & Wakefield, released on Monday.
Overall absorption of commercial office space in India was lower in 2013 primarily due to high relocation and consolidation activity with occupiers moving to better quality, larger and cheaper spaces in suburban and peripheral locations, it said.
Property consultants are still upbeat about investor interest in yield-generating assets.

“A number of large global investors, including a number of sovereign funds, have taken the first move by partnering with successful local investors and developers for investing in the Indian real estate market. This is expected to result in high transaction activity especially in income-yielding commercial office assets during 2014,” said Sanjay Dutt, executive managing director, South Asia, Cushman & Wakefield.

Tier II cities in AP no threat to Hyderabad realty: Credai

HMDA Approved Plots for Sale
www.hmdaplots.blogspot.com
----------------------------------
Hyderabad would continue to attract good interest in real estate activity and is capable of withstanding competition from Tier II locations in the event of state's bifurcation, according to The Confederation of Real Estate Developers Association of India (Credai).

"Due to the imbroglio surrounding the state bifurcation, many new deals have been put on hold. Once the issue gets resolved, we expect renewed interest from all segments in Hyderabad," Ram Reddy, general secretary of Credai, told mediapersons here today.

According to him, although there wasn't any notable appreciation here in the last one year, residential property prices might rise an average around 5% this year. In the next nine months, around 10,000 residential units would be launched here, he added.

The average cost of residential property in Hyderabad currently stands at Rs 3,200 per sft. The office space rental in the most sought-after Western part of the city --- home to big software establishments -- is Rs 40 per sft. This, according to Credai, is 25-30% lower when compared with a similar location in Chennai and Bangalore.

Answering to a query on whether the bifurcation would lead to any pressure on the price and volumes here, Anand Reddy, vice president of Credai, said most of the Tier II cities do not have Hyderabad's distinct cosmopolitan advantage. "The price appreciation evident in the recent times in Visakhapatnam, Vijayawada and Guntur among others was just a speculation and they do not reflect the actual demand," he said.

The realtors body today announced the launch of Hyderabad Property Show-2014 starting from February 28. Around 60,000 individuals are expected to visit the three-day event.

Source: Business Stanard  13/02/2014