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Real Estate Info
Boom '07
Indian realty's success in 2006 will be carried forward this
year too
The real estate boom witnessed last year is expected to continue
into 2007 with international investors flocking in to infuse
capital in excess of Rs 80 billion, according to the Associated
Chambers of Commerce and Industry of India (ASSOCHAM). Global
real estate majors such as Royal Indian Raj International,
Blackstone Group, Goldman Sachs, Emmar Properties, Pegasus
Realty, Citigroup Property Investors, Lee Kim Tah Holdings,
Salim group,Morgan Stanley and GE Commercial Finance are likely
to bring in a collective capital of 8bn investments as India
opens up its real estate sector to 100 per cent FDIs. Morgan
Stanley has already established its presence through its real
estate investment arm Morgan Stanley Real Estate and is investing
Rs 3 bn (around $68 mn) in Mantri Developers Pvt Ltd, a Bangalore-based
real estate developer. The investment firm plans to invest
more than $1 bn over the next 4-5 years in the Indian real
estate sector. Further Tishman Speyer's has tied up with ICICI
Bank to invest $1bn in the country, while Kotak India Real
Estate Fund closed its domestic tranche raising $100 mn. Leading
US pension fund, CalPERS, hedge fund Farallon Capital Management,
US-based developer Tishman Speyer and NRI fund Trikona Capital
too have drawn plans to invest in the booming market. Domestic
funds including Kotak Realty Fund, HDFC India Real Estate
Fund, Pantaloon Retail's Kshitij Real Estate Fund and UTI
Venture Fund have also been very active. The Association expects
the trend to continue to lure many more such investors.
Record high
Bangalore's office absorption surpasses previous standards
New research issued by global real estate adviser DTZ has
revealed that the Grade A&B leasehold office space absorption
in Bangalore crossed 8.9 million sq ft in the first three
quarters of 2006. Its latest research report into the change
in occupied space from one quarter to the next in Bangalore
also predicts total absorption for the city to exceed 11 million
sq ft by the end of 2006, surpassing its own previous year's
absorption record. The report's key findings include: o The
office market absorption continues to be driven by IT/ITES
sector which accounts for over 70per cent of total office
space absorbed in this quarter o A marginal increase recorded
of CBD and Off-CBD's share in total absorption of office space
because of new stock addition of UB City in CBD o Warmshell
leasehold Grade A office space rentals prevailing in CBD are
Rs 61 per sq ft o Rising demand from corporates and IT/ITES
sector has lead to an increase in rental values across most
micromarkets of Bangalore except in PBD (Whitefield, Outer
Ring Road, Sarjapur Road, Hosur Road, Electronic City and
Bellary Road) o Rentals in SBD (suburban areas) range from
Rs 36-40 per sq ft and have risen by 18 per cent during the
last quarter. Hugh Hamilton, global corporate services director
of DTZ in India said: "The absorption figures for Bangalore
are the highest in India and compare well with other global
cities. PBD contributed the most to office space absorption
over the last two quarters and going forward, the CBD and
the Off- CBD areas are not expected to contribute significantly
due to the lack of Grade A office space supply there."
Meanwhile Mumbai's most expensive
Demand for office space is particularly marked in India with
Mumbai the fourth most expensive in the Asia Pacific region
at $ 11,390, according to a recent survey by global real estate
advisory DTZ. Meanwhile for the seventh consecutive year,
London's West End retained its position as the world's most
expensive office location. London (City) was ranked number
four in DTZ's tenth annual Global Office Occupancy Costs (GOOCs)
Survey 2007 which covered costs across 131 business districts
in 46 countries worldwide divided into six regions. Average
space utilisation increased by 1 per cent in North America
and remained highest amongst the six global regions at 22
square metres, while Asia Pacific and Western Europe dropped
marginally by 1per cent to 13 square metres and 18 square
metres respectively.
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