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Shopping malls catch the fancy of realty investors

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Investors in 2016 either acquired malls, or partnered with firms to build new ones

Bengaluru/Mumbai: Investors across the globe shopped for some of the best malls across Indian cities this year, signalling an increasing interest in retail real estate as they bet on long-term gains from the country’s booming consumer economy.

Marquee investment and pension funds such as Blackstone Group Lp, GIC , APG Asset Management NV and Canada Pension Plan Investment Board (CPPIB) have either acquired operational shopping malls, or are partnering with developers here to build new shopping malls or to buy other brownfield assets.

Retail was not a category investors looked at before relaxation of foreign direct investment (FDI) norms in November 2015, as global investors were barred from buying existing retail malls or assets.

“Unlike Xander, which set up Virtuous Retail to undertake ground-up development of retail centres, other global investors did not want to invest at the development stage as large format retail is extremely specialized,” said Sid Yog, founder of investment firm The Xander Group Inc. and its retail arm, Virtuous Retail (VR).

Yog said it’s a new asset class that has opened up for investors in India and those looking for yield are now also considering retail, especially since institutional quality assets, even in the office and warehousing space, for acquisition remain relatively scarce.

In November, Dutch pension fund asset manager APG and VR formed a joint venture to acquire a portfolio of three shopping mall assets from a Xander-sponsored fund for about Rs2,000 crore ($300 million). This is an initial portfolio and the partners intend to acquire more retail assets.

Capitalizing on relaxed FDI norms, rising disposable income and large market potential, institutional investors are eyeing retail assets with greater interest. This year is expected to witness private equity investments of about Rs4,200 crore in retail assets—the highest level since 2008, said a 22 December note by property consultant Cushman & Wakefield.

Driven by the increased demand from retailers, the top eight Indian cities witnessed 10 malls becoming operational —amounting to 5.31 million sq. ft of mall space till September this year, marking the highest number of malls becoming operational since 2012.

After acquiring the largest commercial office portfolio in India, Blackstone Group has also started buying malls now. In December, it bought a 50% stake in Pune Westend mall for Rs600 crore and earlier this year, bought a million sq. ft of retail space in L&T Realty Ltd’s Seawoods project in Navi Mumbai for Rs1,450 crore.

“The reason funds are chasing malls is because of lack of availability of investable assets in office. Most large office owners are waiting for a REIT,” said Ramesh Nair, chief operating officer at property advisory JLL India. A REIT or real estate investment trust is a listed entity that primarily invests in leased office and retail assets, allowing developers to raise funds by selling completed buildings to investors. “We have 720 malls in the last 17 years and only 99 of them are of superior quality. Mall supply over the years has drastically reduced,” Nair said. “While demand is 10-15 million sq. ft per year, supply is only about 5-7 million sq. ft per year.”

Mumbai’s Oberoi Realty Ltd is planning to set up a retail platform, where it will partner with investors.

“…That retail platform will be owned by Oberoi Realty. We will be happy to look at investors at two levels—either at platform or project level depending on how the opportunity turns out,” said chairman and managing director Vikas Oberoi. He said the aim to form a REIT is one of the biggest driving forces behind investors chasing retail assets. It is also setting up a separate mall vertical and is building two malls in Mumbai, investing $200-$250 million, in addition to one mall it operates.

Foreign investors have focused on large cities to buy commercial office and residential assets so far, but due to limited top grade retail assets, they are now also investing in tier II cities.

“The opportunities to buy retail assets in large cities is higher compared to moderate scope in tier II cities. We are looking to build a couple of new malls and acquire operational assets in both tier I and II cities, because we think we can operate them better and add value,” said Atul Ruia, joint managing director, Phoenix Mills Ltd.

CPPIB is in the process of picking up a stake in Phoenix’s subsidiary, that runs the Phoenix MarketCity mall in Bengaluru. Ruia declined to comment on the transaction.

Mumbai-based K. Raheja Corp., which runs the Inorbit chain of malls, is also planning to double its retail portfolio to five million sq. ft of leasing space in the next five years.

“Today, there is a clear cut segregation between good and bad malls and a few quality assets have stabilized and continue to do well. Funds have confidence in certain quality of retail assets and see that this is not a struggling asset class in India,” said Rajneesh Mahajan, executive director, Inorbit Malls India Pvt. Ltd.

Xander’s Yog said it takes a lot of time and a lot of equity capital to build a good mall and one needs deep equity pockets to build quality retail in India.

“Additionally, you need patience. With classic Indian execution issues, it could take up to 5-7 years to build a retail mall of scale and then another 3 years for them to stabilize. Most developers are in the cash churn business and thus it doesn’t work for them, and some investors have that kind of time horizon,” he said. “For many large investors, it’s an opportunity to diversify their portfolios and developers are willing to build more malls now because they have funding and an exit option,” said Vivek Kaul, head-retail services, India, CBRE South Asia Pvt. Ltd.

Source: livemint.com

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Square Capital Becomes The Largest Organized Distributor Of Secured Mortgages In India

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Square Capital Becomes The Largest Organized Distributor Of Secured Mortgages In India

Square Capital, the digital lending arm of India’s largest real estate transaction platform Square Yards has underlined its market dominance by becoming the largest organized distributor of secured mortgages in the country. It is currently facilitating USD 30- 40Mn (INR 200cr – INR 260cr) of loan disbursals every month, contributed majorly by secured mortgages spread across 50+ banking partners for their different products in home loan, home against property and business loan. Its impressive growth is attributed to the rise in availability of affordable housing in India as well as the increasing consumer propensity to rely on fintech platforms for a full spectrum of financial needs.

Speaking on the recent numbers, Amit Prakash Singh, Principal Partner, Square Capital said Real estate and fintech aggregation are a synergistic match to a vast degree and Square Capital, was able to build on the established best practices of Square Yards to become one of the largest mortgage distributors in India today. We are betting big on affordable housing to drive future growth, particularly with the Pradhan Mantri Awas Yojana offering interest subsidies and of course, the huge number of untapped first-time home buyers that can be catered to in the home loan segment up to Rs. 30 lakh.

Government schemes such as the Pradhan Mantri Awas Yojna which offers interest subsidy between 3-6.5% for loans between Rs.6-12 lakh for EWS and LIG categories and subsidy of 4% and 3% for loans of Rs.9 lakh (for those with income up to Rs.12 lakh annually) and Rs.12 lakh (for those with income up to Rs.18 lakh annually) respectively, are driving consumers to opt for home loans that they can repay easily and fulfill their dream of real estate ownership. In fact, several studies have shown that loans have gone up by more than 20% over the last few years for affordable housing purchases. Square Capital is optimizing this opportunity to the hilt by enabling easier access to credit for potential home owners.

In the absence of any national-level mortgage distributor that has managed to scale up over the last decade, Square Capital has not only been able to generate massive digital leads but is also enabling fulfilment, either digitally or through its hybrid online to offline (O2O) approach.

About Square Capital

Square Capital is a marketplace lending platform that aggregates offers from financial institutions on a single platform and provides end to end fulfilment support in the lending process that includes assessing the credit worthiness/risk of clients, helping them choose the right product from the appropriate lending organization, managing their documentation, advising on professional issues pertaining to taxation & insurance and assisting the client till the entire lifecycle of loan disbursement.

Also Read: Under The First MahaRERA Verdict, Builder To Return Rs.26 Lakhs To Buyer

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ASK Group and TVS Emerald Join Hands To Setup Rs 400 Crore Real Estate Investment Platform

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ASK Group and TVS Emerald Join Hands To Setup Rs 400 Crore Real Estate Investment Platform

ASK Group’s Property Investment Advisors, the real estate equity arm, and TVS Motor Company’s real estate wing Emerald Haven Realty Limited (TVS Emerald) have decided to set up Rs 400 crore real estate investment platform.

The raised capital will be spent on several affordable mid-segment projects.

“We strongly believe that affordable and mid- segment market offers huge growth potential and this is in sync with the TVS Emerald’s core purpose of providing better living space to the urban middle class,” said Amit Bhagat, MD & CEO ASK PIA.

“Our endeavour is always to delight customer by fulfilling the aspiration of the urban middle class in their quest for a better living space,” said R. Chandramouli, President, and CEO, TVS Emerald.

The first investment under their partnership will be of developing a 10-acre land parcel having 5,48,000 sq ft of saleable area. It will have an equity investment of Rs 83 crore in Porur, Chennai.

Sunil Rohokale, MD & CEO, ASK Group said, “This platform is poised to get benefited in the heightened regulatory regime of RERA through focus execution and satisfying customer needs.”

Also Read: Chandigarh Brokers Yet To Register Under RERA

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ANAROCK Property Consultants Acquires LJ Hooker’s Indian Operations – Redwoods

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ANAROCK Property Consultants Acquires LJ Hooker’s Indian Operations – Redwoods

Strategic acquisition to boost ANAROCK’s capability in integrated real estate solutions, dedicated design center in Bangalore

Bangalore, August 30, 2017 – Consistent with its focus on becoming India’s leading residential real estate solutions company, ANAROCK Property Consultants Pvt. Ltd. has announced the acquisition of Redwoods, the Indian arm of LJ Hooker, based out of Bangalore. The acquisition was closed today, with ANAROCK absorbing all Redwoods employees.

Anuj Puri, Chairman – ANAROCK Property Consultants says, “The acquisition of LJ Hooker’s Redwoods is in line to our overall business strategy and will help us augment our operations across key southern markets. It will give us unparalleled competitive advantage in offering customized real estate solutions. With its strong presence and unique multi-pronged approach, ANAROCK is decoding unmatched value for both B2B and B2C clients.”

ANAROCK Property Consultants is already redefining the residential real estate services sector in India by offering integrated solutions through a hybrid model of online and offline convergence. The company launched its operations under its flagship brand name of ANAROCK in June 2017 and is well on its way to cross INR 100 crores of revenues for 2017 calendar year. The firm has aggressive plans to achieve INR 250 crores of revenues in 2018.

With a growing team of over 750 professionals, ANAROCK aims to cross 1000 in employee strength by the end of 2017. The company currently operates in all key property markets across India – Mumbai, Chennai, Bangalore, Gurgaon, Noida, Hyderabad, Kolkata AND Pune, with an international presence in Dubai.

About ANAROCK Property Consultants Pvt. Ltd.:

ANAROCK Property Consultants Pvt. Ltd. is one of India’s leading real estate services company having diversified interest across real estate value chain. Anuj Puri, ANAROCK Group Chairman, is an acknowledged thought leader in the Indian real estate industry and numbers among the most established expert on India’s real estate opportunities, both in India and across the globe. With a career spanning over 27 years, Anuj Puri was the former Chairman & Country Head of international property consultancy JLL India.

The ANAROCK Group’s key strategic business units comprise of residential broking and advisory services to clients, investment services, debt, equity and mezzanine funding, and research and consulting. ANAROCK’s residential team consists of the industry’s finest residential real estate professionals who understand the ever-changing consumer needs and market trends.

With its vast experience and expertise in serving the most reputed developers, corporate houses, portfolio investors and individual investors makes ANAROCK India’s pre-eminent residential real estate services firm. The company’s investment arm has built a revolutionary business model of bulk-purchasing residential apartment inventory through a proprietary investment fund. For further information, please visit www.anarock.com

About LJ Hooker:

Established in 1928 by Sir Leslie Joseph Hooker, LJ Hooker has grown to become Australasia’s best-known real estate brand (Galaxy BrandTrack 2015). It is one of the largest residential and commercial sales and property management organizations in the industry with more than 8,000 sales professionals, property managers and support team members in 730 franchised offices.

LJ Hooker has an exciting and impressive heritage of innovation, perseverance and bold decision-making. The company’s strong people-focused culture was established and defined by its founding visionary: Leslie Joseph ‘LJ’ Hooker in 1928. A constant innovator, entrepreneur and devotee of best practices, he changed the way real estate business was conducted in Australia. Today, LJ Hooker is Australia’s best known real estate brand.

About Redwoods Projects Pvt. Ltd.

Established in 2006 with the philosophy of providing customized real estate solutions to clients, Redwoods has expertise in fund management, deal structuring, fund syndication, joint developments and unique transactions. With over 25 million sq.ft. of leasing experience across all major markets, Redwoods have nurtured long-standing relationships with all major developers across India.

Redwoods partnered with BNP Paribas Real Estate in 2008 to jointly provide real estate services in India. The company successfully exited the Joint Venture in 2010 after establishing a successful realty arm in BNP Paribas.

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