Month: November 2017

The Future Of Logistics Real Estate in India

India logistics real estate is soon to be addressed as an asset class worth investing in. Accompanied by fresh investment and supply the logistics real estate market is set to score a fortune in the coming days. Several foreign investors and realty players are ready to pour it on Indian logistics industry. The implementation of GST will additionally draw the attention of global investors towards it which help the sector to have headway in future. Currently, India has a requirement for major business hubs in out-skirt locations with necessary connectivity. However, urban logistics are reasonably smaller in general.
When it comes to logistics, space is considered a huge component. The average space required for logistics asset is 10,000 sq.m. Again, it depends on the business requirement. Since, logistics property is a huge investment; it should fulfil the requirement of its tenants. Supply chain, transportability, and networking determine the turnover of the sector. Another decisive factor in logistics real estate investment is usability. Logistics spaces are widely used for storage, manufacture, and cross-docking. Though it’s still at a conceptual stage, but ‘Multi-storey’ distribution centre could be a vital solution to accelerate the potential growth faster. So much futuristic approaches in logistics real estate render a great alternative investment sector for the potential investors.

Logistics and warehousing demand has been increasingly fuelled by growth in buying sentiment and super success of e-commerce. Surprisingly, Asia Pacific logistics business earns better revenue in comparison to other international counterparts. So far, major players such as- Ascendas-Singbridge, Assetz Property Group, Logos, Canada Pension Plan Investment Board (CPPIB) and Everstone Group have invested in this sector for their further business development. Logos and Assetz Property Group jointly set up a logistics and warehousing platform which will invest about $400 million, as equity, to build and direct dedicated logistics and industrial parks. Starting with key logistics hubs of Mumbai, Pune, Chennai, Bengaluru, Hyderabad, Ahmedabad, and the National Capital Region (NCR) Logos India will cover investment, development and asset management of modern logistics assets.

“Whether it’s a rented property or an owner-used logistics real estate has its steady pace of business expansion. E-commerce and start-up sectors are turning the demand of small logistics space up. Thus, an increasing requirement has been observed for sustainable construction solution. In collaboration logistics, real estate will have substantial revenue contribution in country’s economy, followed by a stable employment extension,”- said Mr. Mahesh Somani, Head- East Zone, National Association of Realtors India (NAR).
The market is on an exploration spree for building logistics centres close to the Central Business Districts (CBD). Here the market looks forward to the intensification of the constructional activities and the realty development works. Amazon and DHL have already secured their investment in Indian industrial warehousing sector. GST roll-out is having a positive impact on Indian logistics industry. Several logistics companies have been built around the highways and around 7.3million sq ft of warehousing space were leased in the first half of 2017 across major cities in India.

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The Future of Hospitality Real Estate in India

Tourism in India is driven by the rich historical and traditional heritage and topographical assortments spread across the country. The future of the hospitality industry inherently related to that of the tourism industry with both foreign and domestic travellers playing an important role in its rise. The industry is witnessing significant growth in every year with its changing business models and distinctive perquisites. The biggest reason behind this boom is India’s overall development as an emerging, favourable business destination in South Asia. The potential advancement in the hospitality sector has been attracting major global hospitality players towards the country.
The Hospitality industry in India is one of the brisk expanding industries at present. It’s expected that the tourism industry single-handedly will be contributing about Rs. 9-10 lac crore by the year of 2020. The six rotating seasons of our country returns this industry huge take home. With the changing mindset of Indian travellers, there are numerous luxury resorts and boutique hotels have been mushrooming per diem. Both the domestic and international travellers visit has severely increased over the last few years. Tourism is also a large employment originator apart from being a pivotal source of foreign exchange for India.
India is currently having more than one lac hotels. While there are established Indian names like- ITC, Oberoi, Leela and Taj, there are major international brands such as – Hyatt, Marriott, Starwood SPG, Carson Group, Accor Hotels, IHG, Zinc etc. have tapped the market of Indian hospitality business. Besides, there are multiple branded aggregators like Oyo Rooms, Zo Rooms, Vista Rooms, Trivago and others are delivering state-of-art service to expand the prominence of the industry.
In a bid to widening the landscape for the international players, the government has allowed 100% FDI in the hospitality and tourism sector. The industry will see more foreign hospitality brands investing in India in the coming days. Hospitality market in India is going to own many partnerships and tie-up business between different domestic brands as well.

With the changing market scenario, customers have become more price-conscious and they sought for better value for their investment throughout the experience. Hotel Industry is now approaching budget accommodations under their existing brand value thereby making the service available on a larger scale. Other than their core business, hotel industry will also be focusing on other avenues such as- event management, transport services, and other auxiliary services. Thus, they are zooming in tier II and tier III cities for their business expansion. Reportedly major global brands like- IHG, Starwood, Zinc InVision and Hotel Behemoth expressed interest in launching branches aiming the mid and luxury market segment. Along with the supply of the construction materials, sale and lease of commercial lands will be integral parts of this business expansion. This business evolution will concrete the alliance between the domestic real estate development houses and the international hospitality players.

“Hospitality industry currently envisages budget-friendly, standardized accommodation which could be a positive benefactor to the real estate industry. The industry is currently exploring development alternatives in tier II and tier III cities and that would spur the growth of urbanization as well as infrastructural development. As more big names are aiming towards India the better constructional and architectural progress will be assured and it will annex country’s present economic standing”- said Mr. Mahesh Somani, Head- East Zone, National Association of Realtors India (NAR).

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The Future Of Healthcare Real Estate in India

Healthcare real estate is a sub market of the real estate industry. Also known as “medical real estate” the sector helps in designing, constructing, and facility planning of buildings and offices for the healthcare industry. Indian healthcare sector is experiencing so much rapid change, thereby is poised for significant growth. Right now, the sector has developed into one of the largest sectors both in terms of revenue and employment. Thanks to its extensive coverage, investors are pumping money on this sector, which is expected to drive Indian real estate market over the coming years. Healthcare real estate trust is the latest addition in this block.
The total size of the healthcare industry is expected to touch USD 160 billion by end of 2017. Both the domestic and global companies are entering the market and driving the growth to the next level. Not only the hospitals and offices healthcare industry comprises of medical services, medical equipments, outsourcing, student accommodation, health insurance etc.

The demand for patient accommodation in government hospitals has become the crying need of the moment, as most of the salaried people in our country can’t bear expenses of treatment of the private hospitals. For the reason that government hospitals are cheaper, government hospitals overflow with patients on a daily basis. India is currently facing a persistent shortage of healthcare infrastructure in tier I and tier II cities, rural areas in particular. Only a construction boom can be an effective solution to calm this stress down. Government‘s several significant initiatives for this sector gets us a glimpse of the growth prospective of this sector in future. The demand of healthcare sector will advance real estate production in the next decade.

Followed by demonetization hit, India is on the verge of its economic expansion. Real estate sales market is undergoing several constitutional changes in order to gain investment credibility. The confluent factors such as rising middle-class income and change in lifestyle pattern are pushing the sector towards significant sales achievement. The growth will be additionally driven by the healthcare sector by both the governmental and private-partnership enterprises. Since, the healthcare industry is largely dominated by the private players; it is getting backed by large-scale investments from Private Equity (PE) sector as well. There is an existing opportunity for the global players to set up hospital chain in tier I and tier II cities across India.

The increasing demand of prime and alternative healthcare is constant. The future of healthcare industry is somewhat collateral to the real estate industry. A collaborative association of healthcare, real estate and private players can set forth overall good health of the population as well as the economy of the country.
“The key objective of advanced reality is to provide end-to-end solution to the other industries through project planning, budgeting, and proper constructional support. In alliance with healthcare, real estate market will be resulting in significant infrastructural development in the hospital industry,”-said Mr. Mahesh Somani, Head- East Zone, National Association of Realtors India (NAR).

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The Future Of Retail Real Estate in India

Real estate industry has been providing scrupulous solution for commercial property solution over the decades. Now the commercial real estate market is hooking on the retail portfolio to attract more and more domestic and international revenues. The future prospect of retail real estate in India attracts the Private Equity (PE) investment flow to this very sector. Observing a limited supply chain all over the country, global PE firms started investing in retail sector with a view to branch out their investment selection in the country.

The reason behind investor sentiment is flowing towards retail real estate in India is stable economy of the country which is relatively less sensitive to the global slowdown. Nevertheless, the growth in the retail real estate sector won’t take place abruptly. It will be rolling slower than anticipated. Retail real estate boom will put India on the global map, as many FMCG, E-Commerce, Manufacturing companies and large Logistic providers are going to expand their business opportunities in India. The retail sector in India is emerging as one of the prominent employment sector with growing middle-income group populace and rapid urbanization of the peripheral areas of metropolitan cities. Indian retail market is expected to grow at a Compound Annual Growth Rate (CAGR) of 10% to US$ 1.6 trillion by 2026.

The combination of retail and real estate will be highly-productive for both of the sectors. Retail real estate is considerably a complex subject other than the two major investment segments of real estate i.e. – residential and commercial sectors. A retail investor needs to assess many factors before investment such as- stipulation of the retail space, return on investment, commercial trends, performance of t competitive companies, consumer spending and laws governing retail leases. We can see half of the expensive retail micro-markets are Delhi-based. Malls and other expensive market places earns their revenues largely from rents comes from the retail industry.

Online presence of a company is crucial for business gains for any industry. Both the retail and real estate sector boast strong web identity and offerings. Retail industry owns the popular choice category as India’s Business to Business (B2B) E-commerce market is a mass-scale hit. The retail market of India has two major divisions ‘Organized Retail Market’ which is valued only 9% of the entire sector and ‘Unorganized Retail Market’ encompasses the remaining 91% of the sector. With the steady development of E-Commerce Industry in India, there are several start-up and large-scale companies are opening business hubs in tier II and tier III cities across the country. However, India’s retail real estate sector developing faster with changing consumer behaviour and better investment resources.

“The decision of leasing of a retail space is driven by the potential purchase capacity of the location. On the other hand a retailer determines a real estate investor’s return on investment. To earn long term stable return from real estate sector investors are putting their money on malls and other mixed-used retail projects managed by either a competent agency or by the development house,”- asserted Mr. Mahesh Somani, Head- East Zone, National Association of Realtors India (NAR).

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What Is The Role of NAR in Indian Real Estate Sector?

The associate real estate agents/brokers of The National Association of Realtors (NAR) are broadly known as realtors. It’s an independent organization that calibrates the interest of brokers and real estate agents and the consumers in concert. In the real estate industry realtors are those people who mediate the transaction process between the buyers and the builders. Apart from being a firm contributor to the development of country’s economy, real estate industry is active and passively involved with other industries, in that way it’s one of the largest employment generators of the country as well.

NAR-INDIA aims to establish world-class real estate brokerage service in India with better integrity, transparency, fair practice so that the realtors’ reputation in the industry stays perfect. To ensure the credibility of realtors NAR-India introduced an entrance level test for membership entitled as RE-MET. This test is mandatory for all the brokers and realtors who want to be associated with NAR. NAR membership is available for those who clear the RE-MET with a 50% aggregate.

The role of real estate agents has gone back and forth with emerging time. Realtors are the most important personnel in any real estate deal as they provide details of the construction, investment advice and most importantly negotiate the deal on behalf of the consumers. Now, a real estate agent is more than a guide to a consumer throughout a realty transaction. There are thousands of brokers operating in over 35 metro cities of the country. NAR-INDIA is an apex body which governs the brokerage practice with ethical measurements and global standard. Realtors with a NAR-India membership are authentic and professional service providers and also the market makers.

For real estate investors and individual property seekers real estate has been always a soaring industry. The demand for residential/commercial/land requirement has been attended, regulated, and served by thousands of professional NAR-India associated brokers/realtors. NAR-India aims to measure out a well-organized infrastructure in the real estate sector in order to meet the global standard. Consumer protection is the highest priority to a NAR-India professional member. Having a credible brand image in realty practice a NAR-India professional realtor will never indulge any overstatement or concealment regarding any property offerings or real estate transaction and won’t ever demand anything beyond the standard brokerage fee.

It is also a niche platform to connect with the government for future growth of the profession. The mission of NAR-India is to expand the international visibility of local business in the vicinity of multiple global listings. Every year NAR-India arranges their annual conventions in order to infuse global practice standard with more clarity, ethics and liability in the real estate practice of India.

“The real estate sector is moving towards retaining better transparency and accountability with the introduction of RERA and GST. The market is expected to become more consumer-driven by the next financial year. This year NAR-India has completed 10 years of its journey. It’s not merely about business networking. The organization is staying the course to bring an upgraded real estate education with technological immersion for best-ever industry performance,”-said Mr. Mahesh Somani, Head- East Zone, National Association of Realtors India (NAR).

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