Jones Lang LaSalle Rated as Best Corporate Real Estate Service Provider

Jones Lang LaSalle has been recognised as the best overall provider of corporate real estate services by the Watkins 2009 Survey of Corporate Real Estate Service Providers. Of the 19 providers evaluated by the largest users of commercial real estate services, Jones Lang LaSalle was rated No 1 in every category, including delivery of results, adaptability of services, pricing, reputation and financial strength. “Real estate is often the third largest cost for many companies. Many are seeking to outsource these functions to reduce costs whilst maintaining similar or higher levels of service delivery. The Watkins survey is a clear indicator of what companies require and value,” said John Forrest, CEO of Jones Lang LaSalle’s Corporate Solutions business in Asia Pacific.

“It is a combination of these things that enable us to maintain our position as a market leader in Asia Pacific. In fact, we are continuing to grow and in the first six months of 2009, we have expanded our portfolio under management by over 30 million sq ft with clients from the banking, technology, industrial and consumer goods industries,” said Forrest. The survey, conducted every two years by the Watkins Research Group Inc., in a joint project with Flaspöhler Research Group, interviewed 204 corporate real estate (CRE) decision-makers from 182 companies, representing North America’s largest users of CRE services—including 59 Fortune 500 companies, 37 Financial Times Global 500 companies and eight government agencies. Read More »

Economic Survey 09 Recommends Real Estate Regulator

Controversial regulatory reforms in the environment sector found their way into the Economic Survey too. The report recommended that housing and real estate sector be taken out of the purview of the central environmental clearances regime. It also recommended the creation of an autonomous environmental regulatory authority, which environment and forests minister Jairam Ramesh had made part of his agenda. Ramesh had earlier said the ministry was considering the creation of an environment protection agency that would subsume the role of the Central Pollution Control Board as well as the ministry’s regulatory sections. The Survey also recommended that degraded forestlands be handed over to the paper industry. The controversial proposal has cropped up several times in the past couple of decades and each time put on the backburner with stiff opposition from several quarters.

In the UPA’s previous tenure too, the idea was floated with the environment ministry proposing leasing government forests to the industry in a PPP model. But the proposal was put off though not completely abandoned. The paper industry has again reached out to the government pushing the idea. Read More »

Decline in Demand of Service Apartments

The demand for service apartments has declined in the last few months due to the slowdown. This apart, real estate experts feel that lack of dedicated players and lower hotel room prices too have impacted the demand in this segment. This, however, was not the scene a year ago. “Last year, the boom had resulted in corporates offering a lot of privileges like frequent travels, which had seen a rise in demand for service apartments. However, lately, with the domestic travel reducing and even hotels offering cheaper prices, the demand has dropped a bit. Nevertheless, the industry expects demand for service apartments to rise again in the next six months,” says Jaxay Shah, director, Savvy Infrastructure Limited.

Real estate analysts agree that the option of service apartment is better than hotels as far as corporates are concerned. “Service apartments carry facilities that support stay with a duration of 15 days as well as over six months. Compared with that, staying in hotels tend to be costlier. Longer stay, however, is being ruled out by corporates as of now. Rather, they are now relying on video conferencing and other cost effective means,” says Ashutosh Limayi, associate director, strategic consulting at John Lang LaSalle Meghraj (JLLM), a real estate consulting firm. Read More »

Indian HNIs Make Realty Investment in India

The Indian HNI (high net worth individual) is being aggressively wooed by foreign developers . With the balance of economic power shifting towards Asia, and with India projected to be the world’s third largest economy by 2050, and a subsequent increase in the number of wealthy individuals, property consultants from across the globe are making a sales pitch, and also getting the HNI segment interested enough to buy.

HNIs are people with net financial assets (liquid assets) of at least $1 million, excluding primary residence and consumables. Data from consultants like Cap-Gemini and Merrill Lynch suggests that India has the youngest HNI population in the Asia-Pacific region, with the club having even 28-year-olds on their rolls. Read More »

Pune Builders Extend Help to Conserve Water

Real estate firms in the city said on Thursday that they would not use water from Pune Municipal Corporation sources for construction purposes. A circular issued by Satish Magar, president of the confederation of real estate developers’ associations of India (Credai), Pune, said, “Our general practice is not to use the PMC water for construction. In fact, builders do not get the permission to do so. However, in case there is an odd case where such a situation exists, we have passed a resolution asking members to ensure that construction activity does not impact the city’s water supply.”

Credai has also asked its members to defer non-critical construction activity to help the citizens’ water needs, the circular said. Magar said in the circular that Credai members have decided to do their best to help the city which is facing water crisis. “Our members will not use any water from the PMC resources but use our own borewells or water from the Sewage Treatment Plants for our construction needs and even in our projects,” Magar said, adding that the members have also shown willingness to make their excess water available with the PMC for making it to areas surrounding such water sources.”

Economic Survey Demands Foreign Investment in Multi-Brand Retailing

The Economic Survey for 2008-09 Finance Minister Pranab Mukherjee tabled in parliament Thursday has advocated sweeping policy changes like foreign investment in multi-brand retailing and higher foreign stake in insurance companies. The survey report card suggested the cap on foreign equity in insurance sector be raised to 49 per cent from 26 per cent currently. According to it, the limit of foreign equity can even be raised to 100 in case of health and weather insurance. (Weather insurance products are aimed at enhancing the risk-taking capacity of farmers, banks, micro-finance lenders and agro-based industries).

“This may help dispel fears of foreign equity in insurance,” the survey said. In the area of external reforms, the survey favoured foreign investment in multi-format retailing starting with food despite opposition to the idea. “Foreign direct investment in multi-format retailing should start with food,” it said, suggesting that for five years these companies must also have wholesale outlets for small and unorganised retailers. Other major initiative suggested by the annual survey was allowing foreign equity in the defence sector up to 49 per cent. The survey added that this limit can be stretched to 100 per cent in the case of high technology and strategic defence goods, services and systems that can help eliminate import dependence. Read More »

CREDAI Demands Better Infrastructure from Kerala Govt

The Confederation of Real Estate Developers Association of India (CREDAI) has demanded the Kerala government to improve infrastructure facilities, mainly road connectivity, to enable them to set up budget apartments in rural areas in the state. “Lack of proper infrastructure facilities in the state is preventing the developers from taking up budget housing projects. The government must reduce the stamp duty and come out with incentives for the developers who are willing to construct budget apartments,” CREDAI chairman Kumar Gera told mediapersons on the sidelines of a function, organised to launch the Kerala chapter of CREDAI.

“The government must create infrastructure facilities mainly for an area earmarked as Special Residential Zones and hand it over to a consortium of developers to build budget apartments,” he said. Gera said that the launch of CREDAI Kerala would bring in best practices in the real estate industry in the state and it will help the developers to adopt a corporate approach to meet the ever-growing demands of home buyers and provide a transparent and ethical platform for the buyers. Highlighting the demands put forward by the CREDAI before the Centre, he said, the CREDAI had requested the Union Government to categorise dwelling units below 1,000 sqft as affordable housing and provide special incentives to it. Read More »

ECB Policy Has no Short Term Benefits- SEZ Developers

Real estate players on Wednesday hailed the Government’s decision to open the external commercial borrowing (ECB) window for special economic zone (SEZ) developers, although some players felt that the move may not offer immediate gains given the global economic downturn. Reacting to the latest changes in ECB policy, real estate major Unitech said that while the move was “positive”, it would not make a big difference in the short-term.

“There would be no immediate benefit due to the global financial market conditions. However, this offers an additional avenue for SEZ developers to get funding requirement at a lower cost”, a senior Unitech offical said. Currently, Unitech has five IT-SEZs in the country. The Government on Tuesday modified its external commercial borrowing (ECB) policy to allow SEZ developers to avail ECBs for providing infrastructure facilities within the SEZ. The SEZ developers can avail themselves of ECBs only under the approval route, according to a Finance Ministry release. However, ECBs will not be permissible for development of integrated township and commercial real estate within the Special Economic Zones (SEZs). Read More »

SEZ Developers can Raise Overseas Debt- GOVT

The government on Wednesday allowed developers of special economic zones to raise overseas debt for building infrastructure facilities within the zones. The move is expected to benefit companies such as Reliance Industries , Adani, Mahindra, Suzlon, Parsvanath and others who have plans for SEZs in place. However, SEZ developers cannot raise ECB for buidling integrated townships or commercial real estate within the zone. They can raise overseas loan after taking approval for establishing infrastructure facilities including power, telecommunication, railways, road including bridges, ports, industrial parks, urban infrastructure (water supply, sanitation and sewage projects) and mining, refining and exploration as laid down in the ECB policy.

Companies such as DLF, Unitech and Parsvnath that build integrated townships have also been allowed to raise foreign loans upto December. Integrated townships comprise houses and other urban amenities like commercial premises, hotels, resorts, roads and bridges built in an area of at least 100 acres. The government had opened the foreign borrowing window for developers of integrated townships on January 2 this year until June 30 as it sought to stimulate the economy. The facility has been extended untill December to make a meaningful impact on the sector which has been hit hard by fall in demand. Read More »

DLF’s DE Shaw Stake Buy Plan in Trouble

Plans by the promoters of top real estate company DLF to buy out hedge fund DE Shaw’s investment in family-owned DLF Assets (DAL) could hit a roadblock because of a little known rule in the country’s foreign exchange laws, people familiar with the matter said. Under a ‘put’ option signed between DE Shaw and three companies controlled by DLF-promoter KP Singh’s family in May 2007, the US-based fund, which invested $400 million in convertible preference shares of DAL, could exit its investment and get a fixed return of at least 27%. As per the ‘put’ option with DLF Investments, Kohinoor Real Estates and Buland Consultants, DE Shaw is supposed to get back around Rs 2,500 crore after forex adjustments, a person with knowledge of the matter said.

But the rule in the country’s Foreign Exchange Management Act (FEMA) classifies all equity investments that carry a fixed return as debt, which could bring DE Shaw investment under the purview of external commercial borrowing (ECB) guidelines. With ECBs not allowed in the real estate sector, investors holding convertible stock with fixed returns could find their exit option blocked. “It will be very difficult for any investor in real estate to exercise the put option with a fixed exit price for the equity because of FEMA guideline,” a top corporate lawyer told ET NOW on conditions of anonymity. Read More »