Bangalore Realty: Expect near-term outperformance

Meaningful resilience in sales; mixed-bag leasing indicators

•  Slew of new launches and controlled pricing kept market momentum steady in Bangalore, even after a robust 2QFY12.
•  Commercial demand-supply equation and vacancy levels are favorable.Current mixed bag indicators for leasing transactions are not strong enough for a negative conclusion of IT sector’s slowdown.
• Market outlook for the next 9-12 months is stable, with moderate pricing  uptick amidst steady volumes. Some short-term challenges could emerge

Sector strategy: Despite sustained under performance and cheap valuations, a challenging macro environment and distressed  fundamentals dilute the strength of immediate catalysts for the Real Estate sector. We prefer stocks with stronger balance sheets and superior operating performance – Oberoi Realty, Prestige Estates, Phoenix Mills and Sobha Developers (not rated), or stocks with near-term triggers – DLF, which offers a play on deleveraging together with valuation comfort.

In CY11, the Real Estate sector has been hit by several headwinds, both operational and regulatory. The outlook for physical markets has been dented due to

(1) plummeting sales volumes,

(2) overhang on commercial leasing due to global slowdown,

(3) delays in approval, launch and construction of existing projects.

Despite such slowdown across the country, Bangalore developers have shown meaningful resilience. We met the regional team of Jones Lang LaSalle (JLL), a few real estate agents, and managements of Prestige Estates and Sobha Developers to understand the market outlook over the next 12 months. We present our key takeaways.

Initial slowdown mitigated with slew of new launches post 1Q:While in the initial three months of FY12, new launches were scarce due to delays in approval, there has been a huge pick-up in momentum since early 2QFY12, with a slew of new launches. 50-60 new projects have been launched across segments (mid-income to ultra-luxury) over the past 9-10 months.

Continuing outperformance in absorption: Amidst declining volumes across other key real estate markets like NCR and Mumbai, the southern markets in general and Bangalore in particular has shown commendable resilience. In 2QFY12, Bangalore-based developers
outperformed peers, with a strong uptick in launch and sales numbers. Our interactions with market experts hint at continued outperformance post 2Q.

Controlled dynamics and pricing mechanism – keys to greater resilience: Bangalore’s higher resilience can be attributable to rational pricing movement on account of:
(1) availability of huge land parcels across the growing periphery,

(2) more competitive and less collaborative environment among developers – every developer enjoys similar demand,if pricing and product positioning is done properly; even a new market entrant can enjoy its share of success,

(3) price mechanism has been a direct function of “cost + margin” – unlike speculative demand-supply in Mumbai and Gurgaon, and

(4) higher proportion of end-user sales – post 15-25% price hike from FY09 levels (mainly due to cost inflation and demand recovery), investors see no meaningful upside and their participation is very low.

Commercial indicators favorable till date: Commercial absorption over CY11 bounced back to over 10msf/year as against ~9msf in CY10 and ~6msf in FY09, largely driven by some SEZ/STPI space uptake. More positively, most of the new leasing (80-85%) can be classified under fresh acquisition (not consolidation by existing customer by surrendering old space). Vacancy levels for the overall city are 13-15%. For Outer Ring Road (ORR),  vacancy levels are 4-6%. Whitefield has high vacancy levels (30%+), but due to lower rentals and limited ready space availability in the ORR stretch, it has been witnessing strong spillover demand. Rental movement has been controlled, but rentals have surpassed 2007 levels (declined 15-20% in 2008-09 and then recovered). Rentals are INR45-49/sf/month at ORR (sub-INR40/sf/month a year ago), INR25-32/sf/month at Whitefield, INR45/sf/month at Bannerghata Road, and INR80-100/sf/month at CBD (no major supply). Leasing activity in North Bangalore has been subdued due to limited space (apart from Embassy STPI). Outright sales of commercial properties are not attracting many buyers, as developers
expect 9-10% cap rate (they can get alternative money from lease rental discounting at 10.5-11%). In the Retail space, the number of upcoming malls has declined sharply due to change in plans by developers. The three major malls launched in CY11 -

(1) Ascendas (Whitefield),

(2) Phoenix (KR Puram),

(3) Meenakshi Mall -

are fairly pre-leased.

Current signs not strong enough for negative conclusion: There are no conclusive signs corroborating concerns of slowdown in IT sector (accounts for 60-70% of Bangalore commercial volumes) spending in current market behavior. Recent transactions depict mixed response. Accenture has taken ~1msf at Mysore Road, while another IT company has surrendered 0.5msf recently. Long-term growth outlook remains strong, though near-term challenges could emerge.

Amidst cautiousness, outlook largely stable for next 9-12 months: Due to huge stock availability and inherent nature of pricing mechanism, barring cost escalations, residential prices are likely to remain stable, with only 5-10% natural appreciation. Large availability of projects at affordable cost would ensure steady off-take. In the commercial vertical, supplydemand equation remains favorable, with ~70% of under-construction buildings already pre-leased. However, upcoming supply in 2012-13,  which is likely to be high despite possible phasing out, would restrain sharp rental pick-up.

Views shared by managements on market outlook

•  We interacted with the managements of Prestige Estates and Sobha Developers to understand their market outlook. Their views largely match with our channel check takeaways – concerns relating to IT slowdown are voiced, but yet not visible.
• Sales momentum has been robust even after a strong 2Q. Prestige sold another INR2.5b (post INR7.8b in 2QFY12), taking its total sales value to INR12.4b till November 2011 as against full-year guidance of INR15b-16b. Sobha’s projects have also shown
  resilience, with sales of INR10b-11b over 8MFY12 v/s FY12 guidance of INR15b. However, unaltered guidance is indicative of managements’ underlying cautiousness.
•  Prestige’s management sees no downside risk to its FY12 leasing guidance of 3msf,given 1.8msf leasing transactions concluded in 1H, and 4-5 big-size (0.3-0.5msf) transactions lined up for its Shantiniketan, Tech Park project. According to Sobha management, Infosys is planning to start a large campus in Bangalore next year,which will house thousands of employees.
•  Approval process has been fairly fast, and there are no major delays in Bangalore,unlike Chennai

Bangalore bucks trend, sees steady home sales

At a time when home sales are falling across major metros, Bangalore is still seeing a steady absorption of residential units, according to a new report. The Karnataka capital is seeing six million square feet of residential apartments being bought by buyers every month for the past year, says SBI Cap Securities. On the other hand, absorptions have been steadily declining at the National Capital Region and Mumbai, the country’s largest realty markets. The absorption of houses has come down from 15 to 20 million sq ft a month to 10 million sq ft now in the NCR, while the western metropolis is seeing absorption of six million sq ft, a 25-month low.

Normally, information technology (IT) companies give salary rises and bonuses during the March-April quarter, and employees start planning their purchases, notes Akshit Shah, real estate analyst with SBI Cap Securities. “Besides this, the festive demand has also helped the home sales,” he adds. Azure Capital thinks the Bangalore economy is supporting this kind of absorption as most of the buyers are salaried class. “IT biggies such as Infosys, Wipro, TCS are hiring 10,000 to 15,000 staff, giving boost to new home purchases,” points out K Madhusudan, co-chief investment officer of the Bangalore-based realty fund manager.

While absorption is steady, the number of new launches in the City of Gardens has come down sharply from monthly average of seven million sq ft to four million sq ft a month now. This has helped it to keep inventory levels under check, the report says. SBI Cap’s Shah says that absorption at ongoing rate and slower pace of new launches can stabilise the prices or even help them to rise. All the same, “a weak quarter in terms of absorption can push the inventory level higher and result in price correction”, he adds. Due to lower absorption, the inventory levels in Mumbai have touched 99 million sq ft and in terms of inventory in months of sales (or months taken to clear inventory) stands at 16, compared to eight months in 2010. This is one of the highest levels in the country.

“In case the approval process in Mumbai fastens,” the report says, “there will be a sudden rise in the inventory, which will push the developers to reduce the property prices. The savior is considerable improvement in absorption, which seems unlikely at the current property price levels.” NCR has a inventory level of 132 million sq ft. This is higher than other cities, but it has come down from a peak of 150 million sq ft in 2010, courtesy lower pace of newer launches. Inventory in months of sales at 12 is higher than two years average of 9, it adds.

Joy in the air for BIA as traffic, cargo movement multiply

Notwithstanding the biting winter chill that has caused several delays at the Bengaluru International Airport (BIA), the Bangalore International Airport Limited (BIAL) will greet the new year with hopes that it will bring in more cheer.

For such was the year that has gone by. The BIA’s annual passenger traffic growth has gone up by 12 per cent this year as it attracted six new airlines, the highest compared to any other Indian airport.

Sanjay Reddy, BIAL Managing Director, said: “No national airline network can be complete without including Bangalore.” Annual air traffic movements grew by seven per cent, touching 1,16,851 movements and 12.53 million passengers for 2011 and the airport at present handles over 350 aircraft movements, servicing around 35,000 passengers per day.

“Since 2008 (the year it opened), it has grown by 54 per cent and continues to grow above the national average every year,” Reddy said, adding that besides this, the airport has seen the introduction of 15 new international airlines in the last three years with six of them in 2011 alone.

“Bangalore has the third highest domestic traffic in the country after Mumbai and Delhi, which makes it the busiest in the South of India. In keeping with this rapidly growing passenger traffic, the terminal expansion currently underway will enhance capacity and operational performance,” Reddy pointed out.

Currently, 35 airlines fly to and from BIA connecting over 55 destinations across the country and the world.

“...Newer routes are in the pipeline with more international airlines approaching the Bengaluru International Airport to start the operations,” Reddy said.

Besides, the airport’s annual cargo tonnage is growing at a rate of five per cent. The BIA handled 2.24 lakh metric tons of cargo in 2011.

The growth, BIAL said, is dominated by engineering goods, electrical and electronic goods and garments, while there is also a considerable amount of pharmaceutical and perishables which are handled at the airport.

“From an industry perspective, imports have also grown tremendously due to a high demand in electrical and electronic goods and machinery and spare parts,” airport authorities said.

In 2011, airport performance remained consistent displaying a steady improvement. On time performance of departure flights is one of the key indicators of airports efficiency and that averaged 85 per cent for the year touching a record of 91 per cent in the month of March 2011.
DH News Service

New Airlines in 2011

Passenger:

* Etihad Airways
* Bangkok Airways
* Tiger Airways

Cargo:

* Cathay Pacific
* Qatar Airways
* Aerologic


New connections in 2011

Domestic:

* Indore n Imphal
* Baghdogra n Raipur
* Jorhat

International:

* Abu Dhabi
* Additional frequencies to Bangkok and Singapore


New introductions during T1 expansion

* Incentivised the use of additional check-in facilities i.e.CUSS at the terminal and Express Check-in at the kerb
* Expanded swing areas to enhance seating capacity in the gate area
* Added screening infrastructure at security check points
* Proposed additional CISF manpower to GOI, approval
expected shortly

Passenger traffic

Passengers 2010 2011*
Domestic 9.07m 10.24 m
International 2.16 m 2.30 m
Total 11.23 m 12.54 m
* December figures are forecasted

BIA zooms on growth path

Around 12% annual growth in passenger traffic and 7% growth in air traffic. This is what the year has been like for Bengaluru International Airport (BIA). By the end of this year, BIA touched 116,851 aircraft movements and 12.53 million passengers. The BIA has seen the introduction of 15 new international airlines in the last three years and six new airlines in 2011 alone. With Etihad Airways, Bangkok Airways, Tiger Airways starting passenger operations from the BIA, the number of airlines operating to/from BIA has gone up to 35. The 35 airlines that fly to BIA connect to over 55 destinations across the country and the world.

The airport currently handles more than 350 aircraft movements and serves around 35,000 passengers a day. This implies a growth of 54% from the numbers in the year 2008, when BIA started commercial operations. The BIA has recorded a one-time performance of 85 per cent this year. The highest record of OTP was in the month of March when the airport witnessed 91% departures on time. On time performance of departure flights is one of the key indicators of airport efficiency. Alongside the growth in passenger traffic, the cargo tonnage is increasing at a rate of 5 per cent annually. BIA has handled 224,000 metric tonnes in 2011. The growth is dominated by engineering goods, electrical and electronic goods and garments.

Mall culture just got bigger, better

The City’s obsession with the mall culture just seems to be getting bigger and better, in proportion to its ever-growing population. There are more than 100 malls in the major category in the city and one more was added on Wednesday, with the opening of Ascendas Park Square right in the heart of ITPL near Whitefield.

C K Ramamurthy, Chairman of the BBMP Town Planning Standing Committee, said: “The number of malls is on the rise in the City unabated. There are so many commercial complexes and smaller malls. The trend of malls will always continue, as the city and its population continue to grow,” he said.

Mantri Square at Malleswaram was started in 2010. In the first three months of its operation, it recorded footfalls of close to 44 lakh. Presently, the mall gets footfalls of almost 15 lakh every month, said a spokesperson for Mantri.

Large scope

“There is still tremendous scope for malls in Bangalore – malls are the best form of organised retail. Currently, organised retail is still quite low for a City like Bangalore. The city can comfortably take about 20 more malls,” said the spokesperson.

Banking on the trend, four IT youth from ‘Inovvorx’ have even started what they call the country’s first ever social networking website catering to branded firms and brand crazy youth.

Called Doondoo.com, the site brings clothes, jewellery, accessories, movies, electronics, eatouts, bars among 32 different categories, on a single platform. It provides real time updates of events, offers, prizes and anything related to companies. Ascendas Park Square hopes to cater to 27,000 IT employees, along with their families.

Apart from the existing 2.8 million sq ft of land at ITPL, it has 2.5 million sq ft of vacant land, on which it plans to build integrated communities where Special Economic Zones combines with residential areas, shopping, entertainment and much more.

Easy decision

Thomas Teo, CEO India of Ascendas, says choosing Bangalore to start a mall was an easy decision.

“Bangalore has a very commercial crowd. But its malls are very utilitarian, run-of-the-mill shopping buildings. The city’s people need malls that are different, with more scope for entertainment,” said Teo.

The city needs FDI in retail to grow economically, said Karen Tan, High Commissioner of Singapore to India.

“Singapore has benefited in a major way through FDI in retail. Also, we have grown without forgetting the smaller businesses. Bangalore, in particular, must allow FDI in retail and also work closely with local businesses.”

Realtors Turn Malls into Housing Projects

Oversupply forces builders across the country to either shelve projects or convert their ambitious mall projects into mixed-use & residential projects

A huge oversupply in retail real estate sector is forcing Indian developers to turn their mall projects into homes.About 96 million sq ft of retail space is expected to be added by 2013 in the top 10 cities in India,while demand will be only for 34 million sq ft,said Crisil Research.This will create a significant demand-supply mismatch,arresting the rise in rentals.Bangalore-based,RMZ Corporation has recently converted its 1.1 million sq feet mall plan into residential cum-hotel project.The firm had earlier tried to reduce the size of the mall to 500,000 sq ft and add a new office space component.We are now building luxury homes at the location, said Raj Menda,managing director of RMZ Corp.Looking at the numbers,many real estate developers in India are seeking to convert their malls into mixed use or residential projects.This phenomenon has increased recently, said Amit Bagaria,chairman of retail consultancy Asipac.While some micro markets in Bangalore will see an over supply of 168%,Hyderabad,on the other hand,from a present shortfall of 66% is headed for an oversupply that could go as high as 322% in 2014.The Mumbai Metropolitan Region will see an oversupply of 58% with Pune at 128%.Because of the expected oversupply,a number of big mall projects,such as Atul Ruias Pheonix Market City mall,Sobha Developers Global mall,RMZ Corporations Galleria in Bangalore,Parsvanaths Metro mall in Delhi and Lancos mall projects,are either being redesigned or shelved.Delhi-based builder Parsvnath has shelved five retail projects due to fund crunch.Moreover,Pheonix Mills,Entertainment World Developers,Salarpuria,Omaxe,IVRCL and Goel Ganga Group are reconsidering their mall projects in Hyderabad,Bangalore and Pune.Sobha Developers has included a residential component in its mall project,jointly developing with Davnam Constructions.The mall was earlier expected to have an ice skating rink,amusement park and a commercial tower.With many other malls coming up in the same vicinity,Sobha is building only 660,000 sq ft of retail space while the rest will be residential, said a person with direct knowledge of the development.Sobha Developers confirmed the development but refused to comment.Delhibased Omaxe said that over supply of mall spaces will only lead to stress on rentals and lower occupancy.Building malls is not a lucrative business as the demand from retailers is lukewarm,especially in the NCR.We are not looking at setting up new retail projects now, said Rohtas Goel,MD of Omaxe.

Bangalore real estate bets big on rental income

Real estate developers in Bangalore no longer want to sell their commercial and retail projects. They are now banking on rental income from their projects to keep their cash registers ringing, 

Developers see outright sale of projects as killing the goose that lays the golden egg and are now turning towards building a regular revenue stream by leasing out commercial and retail projects. This move will also lend more stability to their balance sheets.

Chairman and managing director of Prestige Estates , Irfan Razack, tells CNBC-TV18 that by banking on rentals, they are ensuring constant revenue flow. “We are creating assets for the company which yield steady income. So even if there is a variable in the market in terms of sales, at least the company is 100% sure to get this revenue stream,” he said. With five-six commercial projects and six malls in the pipeline, Prestige Estates wants to take annual rental earnings from Rs 200 crore to Rs 500 crores by FY15.

The Brigade Group also plans to boost revenue from rentals. “Currently rentals contribute 10% to our revenue, but going forward this will go up to 25%,” said managing director MR Jaishankar.

Brigade Group will use two commercial projects and a mall to send rental income from the current Rs 50 crore to Rs 400 crores by FY15.

Nitesh Estates is banking on two commercial projects and malls to hit the Rs 100 crore rental income mark by FY15.

And Mantri Developers is determined not to be left behind. “Creating a portfolio of good rental yielding income is valuable. As of now, we want that to be 50% and even if it goes to 60% over time, that's ok,” said chairman and managing director Sushil Mantri.

Unlike residential real estates, commercial and retail projects don't bring in customer advances, demanding significant capital infusion by developers. Now with the interest in commercial real estate returning, developers are looking at leasing out their property instead of outright sales, as a means of strengthening their long-term revenue stream.

Ozonegroup set for Rs 2,000 cr pharma, Biotechnology industrial cluster

Ozonegroup, a property developer from Bangalore, has announced the launch of ‘Jeevitham’ a pharma and biotech industrial cluster being developed on a sprawling 330 acres in Chikkaballapur, North of Bangalore which is a 30 minutes drive from the international airport.

The project christened ‘Jeevitham’ meaning “caring for life” is being developed with the patronage of the Karnataka Pharmaceutical Association. The cost of the project is estimated to be Rs 2,000 crore and Ozonegroup plans to invest about Rs 500 crore in the project. Apart from pharma companies, the park would also house allied industries like printing and packaging industry, analytical labs and R&D facilities. The park envisages providing employment opportunities to around 12,000 people.

The strategic advantage of Jeevitham is its close proximity to the Bangalore International Airport, and the road and rail networks. N Mohan, Executive Vice President at Ozonegroup, said, “We at Ozonegroup have designed the project considering the need for integrated pharma facilities in the region to provide an impetus to the formulation-driven pharmaceutical sector in Karnataka which is growing at a rate of about 16 per cent year-on-year.”

Jeevitham cluster is also integrated with amenities like ready-to-use warehousing facilities, truck terminal, weigh bridges, business centre, business hotel, amphitheatre, central park, residential quarters with a club house and gym, convenience shopping, bank and C&F (carrying and forwarding) offices, all integrated in a cluster.

Jeevitham would be developed in two phases. Phase 1 would be of about 275 acres and shall be ready for operations by the end of 2013. However, allotment to the industries shall begin by the third quarter of 2012 to enable concurrent development of the pharma industries.

Britannia to develop its HQ property in Blore

Biscuit to dairy products manufacturer,Britannia,run by the Wadia family one of Indias oldest business houses,is drawing up plans to unlock a mega real estate play in the heart of Bangalore.Britannia,which is Indias largest biscuit manufacturer,has its headquarters spread across a 6-acre plus land parcel thats situated on old Airport Road,one of the citys arterial roads connecting the central business district to the IT hub of Whitefield.
According to real estate sources,Britannia has sounded out a number of consultants to look at the prospects of re-developing this land parcel,which at todays prices is valued at around Rs 450 crore.
Three years ago there were market rumors that Britannia might look to sell this parcel of land and relocate its headquarters to Mumbai,which is where the Wadia group is based.But,this isnt the case anymore.However,itsuncertain whether post a possible re-development,Britannia would continue to have its corporate office in Bangalore or not.
In an e-mail response to media questions on whether the company plans to monetize its property and if it is looking to move its corporate office from Bangalore to Mumbai,a company spokesperson said,Britannia is evaluating options as it has done several times in the past and no plans have been firmed up.
Sources in the know how of the recent developments told media that the company has asked consultants to give them a detailed account on what would work best as a long-term revenue generation model residential space,commercial space,retail space,hospitality or a combination of all or a few.
Besides,consultants have also been asked to look in to what would be a viable development model,either to enter in to a joint development with local developers or would the company be better of getting on board Bombay Realty,which is the real estate arm of the Wadia group.
Many in the real estate industry are of the opinion that the best bet in redeveloping the property would be for Britannia to either do only commercial space or a mix of high-end residential and commercial space.
Given that the particular land parcel is situated on the main road it enjoys a FSI (floor space index) of around 3 to 3.5,which translates to a built up area of 10-lakh square feet,for a 6 plus acre property.Commercial rentals in the area at present hover around the Rs 80 per sqft mark.
However,any development might face hurdles of going high-rise as the property is located a stones throw away from the citys old-HAL Airport,which is used by the defence forces.
Another source in the know-how said that retail could also be an option,as the only big retail space that is coming up in the area is on Indiranagar 80-feet road,which is being developed by Nitesh Estates.

RMZ in.1k cr IT SEZ deal Set To Buy Adarsh Prime Projects With PE Backing

Southern real estate major RMZ Corp is close to sealing a Rs 1,000 crore,or $200 million,deal to buyout an IT special economic zone Adarsh Prime Projects in the technology hub of Bangalore,said sources privy to the development.RMZ,one of the largest developers of commercial real estate,will rope in a private equity investor to clinch the transaction,which is in the process of meeting regulatory requirements.
RMZ will acquire the SEZ's 25 acre first phasewith 1.2 million sft pre-leased to tech majors Honeywell Technology Solutions,KPIT Cummins,Sasken Technologies and Subex as well as another 25 acre adjacent land with potential for 3.2 million sft development at a valuation close to Rs 1,000 crore,said one source who is involved with the process.The valuation includes debt of Rs 325 crore that will be paid to the financial institutions,he added.
Adarsh Prime Projects was put on the block by Bangalore-based Adarsh Developers.The SEZ is located on the city's outer ring road and is part of the fast developing technology corridor.This will be one of the largest SEZ transactions in recent past.Private equity firms like Blackstone and Warburg Pincus have been on the prowl to acquire IT parks from leveraged real estate developers like DLF Ltd and Embassy Property Developments.The IT industry's fairly robust employee addition plans,despite global economic uncertainties,make these acquisitions attractive.
We are in discussion with Adarsh for some commercial property and the transaction size has not yet been frozen.The deal would be finalized in two months, said RMZ Corp managing director Raj Menda,when contacted by media.BM Jayeshankar,MD of Adarsh Developers,said the company was looking to offload 1.2 mn sft of commercial space in Adarsh Prime Projects.The deal with RMZ does not include the upcoming Shangri-La resort and residential units that were part of the project,but which has been denotified before the transaction.

SKF inaugurates its Global Technical Centre in India at Bangalore

SKF inaugurated its Global Technical Centre in India (GTCI), in Bangalore, set up with an initial investment of Rs. 50 crores. The company will increase its headcount at the centre to 400 engineers by 2015 from the current 115 engineers (125 by the end of this year).

Engineers at the centre will work in the areas of product engineering, development and testing. It houses laboratories for metallurgy, chemistry and bearing performance analysis.
As a part of its expansion plans SKF is setting up a seals facility in Mysore which is expected to be operational by the first half of 2012. Lubrication systems provider Lincoln Holdings Enterprises, which SKF acquired in 2010, is setting up a new manufacturing facility at Bangalore near Devanahalli. The land acquisition process is over and the facility is expected to be ready by the second half of 2013.

"Western Europe accounts for 41 percent of SKF's revenue. 27 percent of the revenue comes from the Asia Pacific region. Revenue from the APAC region has doubled over the last 10 years," said Tom Johnstone, SKF President and CEO. "India currently contributes around 20 percent of our revenue from the Asia Pacific region."

"SKF currently has a solution factory in Pune. One more in the not too distant future will enable better access SKF products," said Tom Johnstone.

QuEST Global Inaugurates Offshore Design Centre for Siemens in Bangalore

New engineering centre established to cater to Siemens AG globally

QuEST Global Engineering, a leading global engineering services provider with headquarters in Singapore, today inaugurated the Siemens Offshore Design Centre at its Bangalore facility. This center is the result of a multiyear agreement signed by QuEST with Siemens AG to provide engineering services to all of its divisions worldwide. The Siemens Offshore Design Centre at QuEST was inaugurated by Mr. Eckhard Sander, Head of Global Commodity Management Technical Services Siemens along with Dr. Ajay Prabhu, Chief Operating Officer, QuEST Global.

Headquartered in Munich, Germany, Siemens is one of the world's largest engineering and electronics companies operating in the industry, energy, healthcare and infrastructure sectors. For over 160 years, Siemens has stood for technological excellence, innovation, quality and reliability worldwide. The company is the world's largest provider of environmental technologies; more than one-third of its total revenue stems from green products and solutions.

As a Worldwide Engineering Partner of Siemens AG in Europe, US & Asia, QuEST Global will be offering innovative and cost effective solutions ranging from concept design, detailed performance assessment & manufacturing engineering. QuEST expects the offshore design center to scale to over 300 engineers over the period of the next three years. QuEST has been selected as a preferred supplier by Siemens via a rigorous selection process based on parameters ranging from engineering capability, customer satisfaction, cost effectiveness and a proven track record of value creation to customers.

"Commenting on this occasion, Mr. Ajit Prabhu, CEO, QuEST Global Engineering, said: "QuEST is pleased to have been chosen by Siemens as a preferred engineering solutions partner. Through our delivery centres in India, Europe and US, QuEST is uniquely positioned to optimize, capability, capacity and cost. I am confident that we will be able to effectively support Siemens engineering requirements globally."

About QuEST Global Engineering QuEST Global Engineering is a diversified Engineering Services company, employing 3200 professionals across 18 global delivery centers. The company helps customers in aero engines, aerospace & defense, power generation, oil & gas, industrial machines, consumer goods and other verticals to cut product development and project costs, shorten lead times, extend capacity and maximize engineering resources availability by providing support across the complete product life cycle. We leverage our local presence and global reach to support engineering cost reduction initiatives for our customers. For more information, visit http://engineering.quest-global.com .

Demand for Residential Property Market dips; prices stabilize

The demand for residential property market has dipped by 10 per cent in the third quarter over the previous quarter due to a combination of factors. Consecutive hikes in home loan lending rates, property prices, affordability and uncertainty in economy have contributed to the overall situation leading to a dip in demand.

The residential market saw absorption of 3,743 in 3Q11 against 4,301 units 2Q11, as absorption rate declined from 13 per cent to 11 per cent in 3Q11, according to Jones Lang LaSalle's real estate intelligence service report. In 3Q11, unsold stock in Bangalore totalled 31,208 units compared to 27,334 units, reflecting a vacancy rate of 51.3% in 3Q11, up from 45.9% in 2Q11. While 38% of the unsold units are in the Hosur road submarket, the Bellary road sub-market has 19% of the unsold units.

According to N S Srinivasa Reddy, residential analyst, Bangalore, Jones Lang LaSalle, Bangalore market saw the launch of 23 residential projects across submarkets in 3Q11, offering a total of 7,817 new units. Meanwhile , 13 residential projects comprising 6,171 units across different submarkets were withdrawn from active stock, as they were completely sold out.

The Hosur road submarket contributed to over 40% of the new launches in 3Q11. Among the prominent new launches during 3Q11 were Brigade Meadows at Kanakapura road by Brigade group, DLF Maiden Heights at Rajapura by DLF and Nitesh Cape Cod at Marathalli by Nitesh Estates. Prestige group launched a luxury residential project along Edward road in the prime central submarket at a launch price of Rs 21,000 per sqft besides Prestige Sunny Side and Prestige Park View along Hosur road and Whitefield respectively.
The market witnessed marginal appreciation in capital values in the range of 1-3 % during 3Q11 across various submarkets. The slow growth is attributed to a dip in sales volume owing to a sustained price increase in the past eight quarters, increasing interest rates and thereby diminishing affordability, according to Jones Lang LaSalle.

Capital values in the Whitefield submarket continued to witness healthy appreciation, which increased by 4.8% on q-o-q. Brigade Exotica was launched at Rs 4,200 per sqft while Prestige Park View was launched at Rs 3,750 per sqft. Both these projects are above the average capital values of the Whitefield submarket.

Incidentally high-end market is not that affected as villas upto Rs 3 crore continue to be in demand. The concern among developers revolves around mid-segment units in the price range of Rs 50 lakh - Rs 1 crore, says Arun Kumar, Managing Director, Tandem Property Management Services Pvt Ltd. Affordable housing units in the price range of Rs 15 lakh - Rs 30 lakh are doing well, he added.

The dip in demand is due to a combination of factors like hike in lending rate, uncertainty in job market and the current uncertainty in economic scenario , according to Natarajan, home loan consultant in the city.

Outlook:

The absorption rate had peaked when the market sentiments were healthy across different housing segments during the beginning of last year. Subsequently it dipped due to the stable demand against robust supply in the market. Capital values across different submarkets and segments are expected to either remain stable or record marginal growth. Though many developers have not revised the prices upwards, a few are joining hands with HFCs/banks to absorb pre-EMI interest till the completion of the project.

While the high and upper-mid segments in prime central and secondary submarkets in the city are expected to witness marginal appreciation, it is expected to remain stable across other submarkets of Bangalore. However, mid and affordable housing segments along Sarjapur road, Whitefield and North Bangalore are expected to record marginal appreciation in the short term due to a low base and growth of demand for residential units from IT/ITES employees in these locations, says a report by Jones Lang LaSalle.

Investment in real estate by US NRIs dips but Bangalore retains top slot

The impact of economic slowdown has been increasingly felt on the overall demand pattern among US NRIs while investing in real estate back home. However, Bangalore continues to remain the favoured destination for investment in housing. But the quantum of demand has dipped over the years. An estimated 45 per cent of the US NRIs wish to seek home loans while investing in residential property across the country.

In a survey conducted during the 2-day property show organised by Priya Publications and REBI and held in Edison and Santa Clara during November 12-20 , southern cities drew more demand for investment in real estate. In bay area alone, Bangalore continues to remain as the favoured destination for techies as chances of re-employment are better in the city for returning NRIs. Whereas in Edison area, Chennai topped the list of cities for realty investment.

Other cities that evinced keen interest among NRIs include Ahmedabad, Pune, Delhi, Gurgaon , Mumbai, Hyderabad and Kochi. Among tier III cities that are driving demand specific mention must be made about Mysore, Mangalore, Vishakhapattinam and Coimbatore in south. Incidentally the level of interest for investment in Ahmedabad is up especially with the state receiving more foreign investment for infrastructure projects leading to better yield for investors.

Unlike earlier, demand for villas has surged with a significant number of visitors evincing keen interest to invest in villa projects in southern cities. Other categories of properties for which demand continues include office space, developed plot and retail units. A majority of the US NRIs are looking for professionally managed property management companies to manage their properties during their absence in India. The setting up of shops by MNCs like L J Hooker, Red Sky and Remax has encouraged them to look at additional investment in real estate.

The availability of guaranteed rental income properties has generated much interest due to minimal financial outgo and the flexibility to offset EMI payment against rental income every month. As developers are keen to manage such properties for the initial years, NRIs evinced keen interest to invest in such properties.

According to market sources, the overall situation is yet to improve though a majority of the techies are able to hold on to the jobs as there continues to be a demand for skilled jobs across US. However, those companies which are depending on the federal government for a chunk of its business are finding the going tough. For instance Cisco has laid off 10% of its employees all over the world because 20% of the revenue comes from the federal government spending.

Industry sources point out that 3-5 % of employees getting laid off is common in every company. Asset prices collapsed and three-fifths of households in the US saw their wealth decline between 2007 and 2009. More than a quarter lost over half of their wealth. America’s average annual unemployment rate zoomed upwards too when it went from 5.8% in 2008 to 9.3% in 2009 and 9.6% in 2010.

Though a full scale recovery is still a long way to go across US, corporates are increasing their spending as is evident from the spurt in demand by techies for rental accommodation in areas like Edison, said a senior official at a consultancy firm in New York.
There is a spurt in the number of IT projects' spending in the tristate area with the number of expatriates in particular from India visiting for project related assignments, it is said. During 2008, apartments were available just for the asking in Edison area due to frequent layoff and expatriates eventually returning home. But today, several apartment complexes are getting filled up, There is another reason for the shift in trend towards investment in India. NRIs had lost capital values considerably while investing in real estate across US.

For instance, an NRI who had invested in housing in Anaheim during 2006 at US$950,000 saw his investment declining to US$625,000 in a matter of just six months. Another NRI who had put his investment in housing in Orlando saw his investment nose-diving from US$400,000 to US$125,000, according to market sources.

On the IT front, in terms of future prospects at least software looks good, say industry sources. In the short term it looks moderate as new groups are able to get employment. Returning NRIs are eyeing investment in real estate back home as they do not want to prolong the investment exercise due to the growing realisation that property prices are inching high across India.

S3V launches India's first Bioabsorbable Endovascular Drug Coated Stent "Avatar"

Bangalore based S3V Vascular Technologies announced the launch of India's first Bioabsorbable Endovascular Drug Coated Stent “Avatar”. Initially the drug coated stent is at testing stage for animals. The company has already earmarked Rs.140 crore for setting up a state-of-art integrated manufacturing facility in Bangalore.

Disclosing the launch in Hyderabad, N G Badari Narayan, managing director, S3V Vascular technologies said, “It is our first step towards achieving this mission. Initially we launched India’s first Bioabsorbable Endovascular Drug Coated Stent “Avatar” for animal trials. Metal stents are widely used and have been the standard of care for coronary heart disease; however, they have their limitations. Stents made of polymeric bioabsorbable materials (such as our “Avatar”) can achieve the same results in a highly patient friendly manner and at an affordable cost.”

Explaining how it works, Badari added that the “Avatar” not only restores blood flow by opening a blocked vessel, but most importantly it releases a pro-healing drug during its entire life span (about 18 months) and dissolves away after fulfilling its life-saving vessel support role. Once the stent is dissolved, the vessel can then resume its natural function of vasomotion (constriction and dilation). Unlike metal stents, there is no danger of late stent thrombosis (clotting) and generally no need for long term anti-platelet therapy. Patients with “Avatar” will be able to undergo CT and MRI scans and will also be able to undergo further surgical interventions if necessary.

Once installed, this unique product releases anti-proliferative drugs for the first 90 days and pro-healing drugs during its dissolving phase. During the dissolving phase, the vessel wall continues to heal and remodel due to vasomotion. This leads to natural healing and normal vasomotion once the stent is dissolved, he informed.

Already the company had earmarked Rs.140 crore for setting up a state of art facility at Bangalore which is expected to come up with in next 15 months. Out of the total outlay of Rs.140 crore, promoters brought in the Rs.20 crore. Another Rs.30 crore are to be raised from strategic investors and rest through loan from banks. The pilot plant will be ready by April 2012 and will be capable of manufacturing the current generation bare stents and drug eluting stents. The integrated facility will be ready in next 18 months and will have facilities to produce the bioabsorbable scaffholds. The location for the integrated plant will be decided in a few weeks from now, said N G Badari Narayan.

Ajit Rangnekar, Dean of Indian School of Business (ISB), Hyderabad said, “It is a matter of pride for us at ISB that the very first batch has produced a business plan to build a highly-efficient world-class plant which will enable the manufacturing of hi-tech globally competitive medical devices at affordable costs.”

Speaking on business plans, Dr Chava Satyanarayan, director, S3V technologies, added that the company aims to develop next-gen products in intervention cardiology, neurology, peripheral and endovascular treatments. The future expected product line of the company includes catheters, disposables and other devices used in various angiographic procedures in radiology and cardiology.

SRL launches new centre in Bangalore

Super Religare Laboratories (SRL), a pathology and diagnostics network owned by Fortis Healthcare, on Friday, inaugurated its new regional centre on Bannergatta road in Bangalore, built with an investment of Rs 15 crore.


At the event SRL CEO Sanjeev Chaudhary claimed that the largest stand alone diagnostics set up in the city is expected to bring out more accurate and on-time health check up for Bangaloreans, saying, “SRL labs in India can undertake 4,000 tests out of the 5,000 prevailing in the world. The facility can currently undertake 1,500 test and will scale it up to 3000 soon.”

As a part of reaching out to the tech-savvy, SRL also inaugurated its E-Pathology, an online pathology test booking service which offers free home sample collection facility to provide convenience to its customers. “SRL, with its 200 network of laboratories and 1,250 collection centres spread across the country, helps our customers in collecting the samples. The report is either mailed or couriered to the customer,” the company said. SRL has invested Rs 15 crore at its new centre.

Airbus Engineering Centre relocates to new integrated facility in Bangalore

The Airbus Engineering Centre India (AECI) has relocated to a larger building in Bangalore, allowing for a consolidation of its teams into a single integrated facility and providing the necessary space for long-term growth over the next decade.

The centre originally opened during April 2007, and its workforce has grown steadily since – with the total employee count now exceeding 250. The company is expected to increase its total number of engineers to 400 by 2012. The centre will work with the Indian Institutes of Technology (IITs) in Mumbai, Kanpur and Delhi and the Indian Institute of Science (IISc) in Bangalore to design next generation simulators and develop software for noise reduction in aero engines.

Jean Botti, chief technology officer (CTO), EADS said that the company was also looking at forging a partnership with the Indian Space Research Organisation (ISRO) on supersonic and hypersonic aeroplane technology. He said that India is very strategic as a supplier and partner in high-end aerospace products and services.

This is the third branch of EADS Innovation Works (the technology arm of EADS) outside Europe. It is part of the company's global research and technology strategy. The centre works on numerical simulation of complex physical systems, multi-disciplinary optimisation, high-performance computing and radar technology.

The new building is certified for Leadership in Energy and Environmental Design (LEED), and is located in an established area for international business

Bangalore to have IT investment region

South Indian state Karnataka, the hub of country''s IT business, will soon have an integrated IT city in the vicinity of Bangalore International Airport near Devanahalli.

The state government has drawn up plans to develop an Information Technology Investment Region (ITIR), the IT city covering a geographical area of about 40 Sq Kms, near the airport region.

M N Vidyashankar, Principal Secretary in the IT department, said the government was taking necessary steps for initiating the tender process for selection of Master Developer for the ITIR project.

The proposed project would be completed in two phases, he said.

"In the 1st Phase, about 2000 acres of land would be acquired. The project would be developed on PPP mode. The ITIR project is expected to attract investment of over Rs one lakh crore, with potential employment of about three million", Vidyashankar said.

He said the IT exports from the state was likely to touch Rs one lakh crore in the current financial year. The state recorded IT exports of about Rs 85,000 crore during the financial Year 2010-11.

"IT in the state is growing at about 22 per cent and we hope to touch Rs 100,000 crore of IT exports during the current fiscal", he added.

Goldman Sachs picks up 25 acres in Bangalore's ORR

In what could be one of the largest land deals in Bangalore this year, global investment banking firm Goldman Sachs has signed up 25 acres of land on the Outer Ring Road. The land has a development potential of 2.5-million-sq-ft office space with an employment potential of 25,000. The space would be developed by Kalyani Developers.

An official of a real estate services firm, who did not wish to be named, told Business Line that Phase I of the development would be completed in 2013, while the second phase would be completed in 2015. According to him, the company has already signed a Letter of Intent with the developers.

The company is looking at relocating completely from its existing offices in Manyata Tech Park and Embassy Golf Links, he said. Real estate analysts estimate that land in the Outer Ring Road area could be priced at about Rs 6,000 a sq ft.

Infosys too has recently signed up for 1 lakh sq ft SEZ space at Bagmane World Trade Centre on the ORR, which could be the Indian IT behemoth's first non-captive space in the city. An Infosys spokesperson confirmed the development.

Other important deals this year include Wipro (1.3 lakh-sq-ft SEZ space at Pritech Park on the ORR), Accenture (87,000 sq ft – Pritech Park), and Ericsson (3.5 lakh sq ft – Bagmane WTC) — all in Q1 of 2011.

In the second quarter of this year, Cisco signed up for 3.75 lakh sq ft (Vrindavan Tech Village and Salarpuria Hallmark on the ORR) and Accenture (1.3 lakh sq ft at Pritech Park). In Q4 of 2011, Aricent Technologies took on lease 2 lakh sq ft (Prestige Etamin on the ORR) and Sunguard (2 lakh sq ft – Umiya Business Bay on the ORR).

Karnataka expects IT exports from the state to touch Rs 1 lakh crore

Karnataka expects IT exports from the state to touch Rs 1 lakh crore in the current financial year. IT exports from the state stood at about Rs 85,000 crore during the 2010-11 financial year.

“IT sector in the state is growing at about 22 per cent and we hope to touch Rs 100,000 crore of IT exports during the current fiscal,” the State IT Department Principal Secretary, Mr M.N. Vidyashankar, told PTI here today.

IT companies, including MNCs, that have set up shop in Karnataka find the talent to be of global standards, he noted.

Research and development activities have increased tremendously, he said, adding that a greater number of companies are expanding their operations and hiring young talent in the state.

“The IT industry in Karnataka has provided direct employment to about eight lakh persons, which is expected to touch nine lakh by 2012,” Mr Vidyashankar said.

He said the Government is taking necessary steps for initiating the tender process for the selection of a Master Developer for the proposed Information Technology Investment Region (ITIR) project in the state.

ITIR, an integrated IT city covering a geographical area of about 40 sq km, is proposed to be developed in the vicinity of the Bangalore International Airport near Devanahalli. The state government would take up the project in two phases.

“In the first phase, about 2,000 acres of land would be acquired. The project would be developed on a PPP mode. The ITIR project is expected to attract an investment of over Rs 1 lakh crore, with potential employment of about three million,” Mr Vidyashankar said.

He also said that the Government has submitted a proposal to the Centre for establishing an Indian Institute of Information Technology at Dharwad in North Karnataka under the PPP mode through a partnership between the Government of India, state government and industry.

Jacobs, Shell form partnership for project design work in India

Jacobs Engineering Group says it received a contract from Shell in India to build an integrated organization with Shell’s project design office in Bangalore, India. The new organization aims to blend the strong technical and engineering design capability held by Shell and Jacobs, while

Jacobs Engineering Group says it received a contract from Shell in India to build an integrated organization with Shell’s project design office in Bangalore, India.

Officials did not disclose the contract value. They noted that the contract duration is five years with provision for further extension.

The integrated project design organization expects to deliver a full range of engineering and design services for onshore upstream (oil and gas) and downstream major capital projects, mainly in the Middle Eastern and Far Eastern regions, the companies said.

The new organization aims to blend the strong technical and engineering design capability held by Shell and Jacobs, while optimizing the best work processes and tools of both companies, they said.

Jacobs vice president Allyn Taylor said: "This assignment further advances the long and successful relationship between our two companies. We are committed to delivering a high level of service and value to help Shell continue to excel in the marketplace."

Shell's projects and technology organization provides technical services and technology capability in upstream and downstream activities and manages the delivery of major projects for Shell around the world, as well as supporting Shell's interests in India, it said.

Volvo Construction Equipment to triple excavator production in India by 2012

Volvo Construction Equipment, part of the SEK 265 billion Volvo Group, rolled out the first excavators from its new Indian assembly line in September - an EC210B Prime and an EC290BLC Prime (21-ton and 30-ton crawler excavators). Plans are in place to ramp up excavator production significantly next year, and this new development will see factory total capacity tripled in 2012.

"With demand for excavators set to rise by 30% in 2011 the time is now ripe for Volvo CE to introduce production of these products to our Bangalore plant," says Muralidharan, managing director of Volvo India Pvt. Ltd. in Bangalore.
"These machines are intended for Indian customers, as today the construction equipment market is healthy – particularly for excavators. With this investment, Volvo CE has shown its dedication to India, one of the world’s fastest rising economies, and we in turn are ready to take on the challenge of delivering quality machines that are ideally suited to the local Indian market," he said.

"Our factory in Bangalore plays a significant role in our global industrial system to better serve the Indian market – which has a high strategic priority for us," says Executive Vice President Operations Jean-Marc des Courieres. "By investing in new facilities and deploying our Volvo Production system and core values, we are introducing the latest international production techniques, ensuring we offer customers in India the high level of quality and performance that they expect of Volvo CE."

The locally produced EC210B Prime and an EC290BLC Prime subsequently underwent an extensive testing and validation regime, ahead of a full-scale production launch of the machines. The expansion also benefits the existing road machinery range of products, with production doubling of the company’s soil and asphalt compactors, pavers and pneumatic tire rollers. It is envisaged that this investment will also have a positive impact on employment at the facility.

The new excavator line is part of an SEK 144 million (Rs 90 crores) upgrade and refurbishment of Volvo CE’s Bangalore plant. The local production of excavators will mean greater machine availability for Indian customers, as well as shorten delivery lead times and respond to customer requirements more quickly. Begun in June 2010, the upgrade includes a complete overhaul of the existing assembly area, as well as new assembly lines, warehouses and paint shop. Much of the 33-year-old plant was demolished or modified to make way for the new addition. All new areas of the factory have been built with Volvo Group’s site safety and security guidelines, waste reduction and environmental care in mind. This last point extends to a reduction in energy consumption, waste reduction and – by harvesting rain water and employing recycling techniques – the facility’s water requirements have been reduced by some 20%.

The company has introduced six new products to the Indian market. These include the locally produced EC210B Prime and EC290BLC Prime excavators, the 70 tonne EC700C crawler excavator, the DD100 and SD110 compactors, the award-winning L220G wheel loader and the P6820 asphalt paver.

"With demand up 20% in 2011 alone, the Indian market is both expanding rapidly and maturing rapidly," Regional President, Vincent Tan said.

"Customers are not just demanding quality products that are tailored to their needs; they also want rapid parts and servicing support – and are becoming more confident in new technologies, such as CareTrack remote telematics. The country has a tremendous need for infrastructure development, and there has never been a better or more optimistic time to focus on India for those companies willing to invest in products and distribution. Volvo CE has a product range that is ideally suited to the infrastructure needs of the country, it understands the demands of its customers and remains utterly committed to India," said Vincent Tan.

According to data from 'Off Highway Research', the Indian CE market set to double by 2015 from an annual average of 32,868 units in 2006-2010 to 66,900 units in 2011-2015.

Bangalore to house India’s first Nano Park

Four years ago when I attended the first Bangalore Nanotechnology event, there were a handful of startups led by fresh engineering graduates from India. Most of them were from Bangalore and almost all of them had no clear way forward. Neither was there any policy framework in place. It was a nascent event heralding the even more nascent nanotech movement that could be the next big thing to come. Sure, the Indian government had announced $250 million investment but concrete ideas and business plans were not forthcoming.

Today, at the fourth edition of Bangalore Nano 2011, not only was the stage set for a R&D centre ( the Indian Institute of Nanoscience and Technology) which is being set up here in Bangalore with funding support from the Central Government, but the Karnataka government has gone one step ahead and announced the setting up of a Nano Park in Bangalore. According to the Karnataka Chief Minister, a state-of –the-art Nano Park would be set up near the Bangalore International Airport which will house a Nano Incubation Center with world class facilities to develop this sector on similar lines as IT services/products and biotechnology.

When I spoke with M.N. Vidyashankar, Principal Secretary, IT, who is spearheading the whole show, he said that the entire framework for the Nano Park has been put in place and the global tender for the setting up of the Nano Park -- the first of its kind in India -- would be announced on the 16th of January 2012.

“We have finalized the location where 25 acres has been allocated for this venture. Since we had no idea about the requirements by nanotech startups, we had in-depth discussions not only with the Indian Institutes of Technology ( IITs) and Indian Institute of Science, Bangalore but also from the US and EU which have a host of nanotech parks,” Vidyashankar said.

There are about 55 nanotech companies India, spread across a huge spectrum, right from textiles to electronics to waste management and even nano tubes manufacturing. “A majority of them are based in Bangalore while a few are in Mumbai. And, almost every CEO (of nanotech companies) I met today, was eager to get more details about the Nano Park which was announced today by the Chief Minister. You see, merely setting up an R&D center is not really going to help this industry go forward. We needed to have a setup which would help these companies to commercialise their products and technologies and the Nano Park is the first baby step in this direction,” Vidyashankar explained.

More interesting than the Nano Park announcement was the caliber of the nanotech startups. Unlike four years back when the nanotech startups could only talk big ( none of those companies figured in today’s Indian nanotech scenario), the current startups were in areas such as functional and structural nanomaterials, waste management, and a couple of them were in manufacturing of carbon nanotubes.

NoPo, a Bangalore based startup was working on scaling up the HipCO Process for
production of Single Walled Carbon Nanotubes. (HipCO stands for high pressure carbon
monoxide and is one of the only gas phase processes that can produce Single Walled
Nanotubes of over 98% purity). It was invented by Robert Kelley Bradley under the guidance of Nobel laureate Richard Smalley as part of his PhD thesis. Kelley now works for NoPo Nanotechnologies India, as a director of technology and research. Says Gadhadar Reddy, CEO, NoPo, “This is a game changer and is bound to change a lot of things in the nanotech space.” According to Reddy, the HipCO process makes use of carbon monoxide at a high pressure and temperature and uses Nickel and Iron Carbonyl as catalysts. “The original HipCO at RICE University could only produce a few grams of Single Walled Carbon Nanotubes whereas we are planning production in kilograms,” he added.

Similarly, there was another startup, Global Nanotech which also supplies carbon-based nanomaterials to China and the US. Founded by 25-year-old Jinesh Shah, who graduated from Louisiana University his company has collaborations with, leading organizations to produce the highest quality of functional and structural nanomaterials.

Another startup i2n Technologies provides scanning probe microscopy solutions which feature several technological innovations at affordable prices.

A research team under V. Ramgopal Rao, professor from Department of Microelectronics at the Indian Institute of Technology, Mumbai, has developed an explosive detection device called E-Nose out of its startup, Nanosniff Technologies. The E-Nose is cost-effective, reliable, small, light, quick, and portable — just about everything that a large and densely populated country needs in today’s terrorism ridden environment materials and related analytical services with required technical support. “We are planning to set up a manufacturing unit, either in Bangalore or Himachal Pradesh to develop these handheld explosive detectors,” said Kapil Bardeja, co-founder and CEO, Nanosniff Technologies.

Nanotech startups in India have indeed come a long way from the small step taken about four years ago where just about 7-8 startups had showcased premature ideas and technologies and none had taken off,

But today, about 27 startups had showcased their products, technologies and services at the Bangalore Nano 2011 and each seemed to have a unique solution in areas such as energy, chemicals and textiles as well as high-end structural nanomaterials and several seemed to have commercialized their products and are in expansion mode. “The setting up of the Nano Park will surely help us propel our expansion plans and Bangalore is a great place to expand since the skill sets available here are unparalleled compared to other cities,”
added Nanosniff’s Bardeja.

Wipro and Kawasaki to Jointly Produce Hydraulic Pumps in India

Wipro Infrastructure Engineering, the global hydraulics business of Wipro Limited announced that it has signed a joint venture contract with Kawasaki Heavy Industries in India to set up a manufacturing facility in Bangalore to make hydraulic pumps for excavators. The joint venture will be called Wipro Kawasaki Precision Machinery Pvl. Ltd.

The manufacturing facility will produce hydraulic pumps for excavators ranging from 7 to 20 tons. The plant will start operation in July 2012.

Praxair to invest Rs 1,200 cr in India; make Bangalore hub for global pharma industry

US-based industrial gas company Praxair plans to invest about Rs 1,200 crore over the next two years in its Indian operations. It has also set up a new research and development lab here.

Mr Raymond P. Roberge, Senior Vice-President and Chief Technology Officer, Praxair, Inc, told Business Line that the new lab has been set up to for various customer industries, such as metal fabrication, steel and water treatment. The new lab will also act as a global hub for offerings for the pharma industry.

Praxair has about six labs across countries. It invests about $90 million in its labs, of which about 15 per cent goes to Asian labs.

The $10-billion company produces, sells and distributes atmospheric, process and speciality gases, and high-performance surface coatings.

Mr Roberge said he believes water-treatment plants as well as healthcare have long-term potential for the company. “Healthcare is growing globally and is about 10 per cent of total business, though in India it is much less. But we expect it to grow [in the] long term,” he said. He pointed out that business from the Asian region outperformed that from rest of the world, while India too has performed extremely well.

Praxair is also investing about Rs 1,200 crore during the next two years on its existing and new projects, which include an ongoing facility to supply gaseous hydrogen and nitrogen to Indian Oil Corporation in Orissa and two major air-separation plants for Steel Authority of India Ltd (SAIL) at Bhilai.

Praxair has already invested over Rs 2,900 crore in India for its projects in India, including air-separation plants for Tata Steel, JSW Steel, SAIL and Saint-Gobain Glass.

Mr Roberge said Praxair also works with companies developing fuel-cell technology and converting biomass into fuels.

The company gets a large percentage of its revenues from on-site projects — the contracts are usually long-term. The next big revenue earner is the merchant market (excess gas generated by a plant are liquefied and transported to customers' sites), followed by packaged gas for small-scale industries.

Karnataka govt to spend more on nanotechnology

The Karnataka government will provide enhanced budgetary support to promote nanotechnology for the benefit of masses, Chief Minister D.V. Sadananda Gowda said on Thursday. "The state government will certainly provide enhanced budgetary support for nano initiatives and activities of the vision group on science and technology in the budget for ensuing fiscal (2012-13)," Gowda said at the inauguration of the two-day 'Bangalore Nano' conference-cum-expo.
Calling upon scientists to find tangible solutions for food security, energy security, water purification, medicine and healthcare, he told about 500 delegates that nanotechnology had the potential to address key challenges in diverse sectors such as energy, water, agriculture, health and environment.
"To encourage research and develop nanotechnologies and products, the state government will set up Nano Park near the airport at Devanahalli on the city's outskirts with a incubation centre for start-ups, an industrial cluster and centres of excellence for nanotech education to develop domain expertise," the chief minister said.

"Expression of interest has been called for setting up the Nano Park on a public-private partnership (PPP) mode to give fillip to the nascent nanotechnology industry in the state," he noted.
The state government has allotted 14 acres of land on the city's outskirts to set up the Indian Institute of Nano Science and Technology, being funded by the central government under the Rs.100-crore Nano Mission by the department of science and technology.
"We are also providing an acre of land in the Mahatma Gandhi Institute of Rural Energy and Development in the city for setting up a Nano Lab by the state-run Jawaharlal Nehru Centre for Advanced Scientific Research headed by noted scientist C.N.R. Rao," Gowda pointed out.
His address was read out by state minister for science and technology A.V. Asnotikar as the winter session of the state legislature and other engagements kept him away from the tech event.
Rao, however, took exception to Gowda's absence from such an important international event on nanotechnology, organised by the state department of IT, biotechnology and science and technology.
"The chief minister should not have missed such a major event as his absence sends a wrong message to the stakeholders and the scientific community. Hope he will not make it a habit," the chairman of the Scientific Advisory Council to the prime minister asserted.
Regretting that the chief minister of a tech-savvy state like Karnataka does not think science and technology was important for his presence, the outspoken Rao said he had no reservation in commenting on Gowda's absence though it may not be to the liking of the officials present and involved in the event

AMADA setting up strategic base in Bangalore

Amada India Pvt. Ltd, the wholly owned subsidiary of Amada Co. Ltd. Japan, has begun the process of setting up its strategic base in 8 acres of land at the Devanhalli Aerospace Tech Park in Bangalore. The company will initially set up a tech/service center, a vocational training center for engineers and operators, a guest house and back office before going ahead with its plans to begin the manufacture of metalworking machinery in India by the end of 2013 or the beginning of 2014. Amada India plans to increase its employee strength from 105 to 130 over the next 2 years.

Mr. Kuniya Matsumoto, President & CEO of Amada India Pvt. Ltd, has been in India since the establishment of the company's Indian arm. He is committed to creating an efficient and skilled workforce providing the highest quality service in accordance with the Japanese work culture and systems.

He spearheaded the set up of a model sheet metal working facility in the company's temporary tech center in Bangalore where Indian engineers can take apart and put together two machines dedicated for the purpose by AMADA. In addition to receiving hands-on technical training, the customer engineers receive exposure to Japanese work culture and systems and training in shop-floor discipline.

"Successfully establishing a product in India is a process of give and take. We spend time with the customer and understand his constraints and suggest feasible and innovative solutions. In the tech center, AMADA machines are set up for working in Indian conditions with voltage stabilizers, UPS, Generator sets, etc.  AMADA engineers prove out customers parts on state-of-the-art AMADA machines. Proving out of components in India is a challenging task because of the variation in the composition of  sheet metal from various suppliers and also the variation between the batches supplied" said Mr. Matsumoto.

AMADA has a wide range of machines offering excellent solutions for manufacture of low-volume, large-variety product mix. The machines range from Turret Punch Presses and LASER sheet metal working machines that handle medium thickness [6 mm to 18 mm and up to 28 mm for mild steel) to high speed/high end Laser machining solutions with Linear Drive and peripheral loading and unloading automation systems. AMADA also provides total solution services that range from computer software and peripheral devices for controlling metalworking machines to tooling and maintenance.

In addition to a web based e-Commerce System for Spares and Tools, AMADA is equipped with an IT driven Parts Centre located in its Japan headquarters to ensure timely delivery of spare parts. The company will stock a considerable amount of fast moving spares and tools at their Bangalore Technical Center and 8 other Service Centers across India to cater to customer needs and to provide prompt service.

According to the IMTMA report, the market for sheet metal machinery in India is around 500 million USD. The requirement for high quality sheet metal products is growing in India.  Product display stands, hospital equipment, lift cars, consumer durables, etc. are some of the new customer segments for AMADA machines.

Currently, the Power Sector in India accounts for about 30% of Amada's sales in India, with the Silent Gen Set Market taking primary importance. The Communication Industry, where control panels and transmission towers/rooms are manufactured, accounts for about 20% of Amada's sales. The Infrastructure Sector, where sheet metal components are used in earth moving equipment and construction equipment for railways and aircraft, accounts for about 20% of Amada's sales. The Agriculture and Food Sector and the Machine Tool/Manufacturing Industries account for about 10% each, while Medical Equipment and Lifestyle items account for about 5% each.

“A large number of companies involved in sheet metal work in some form or other are the potential customers to AMADA.  With the growing quality demand from the market AMADA expects the companies working on low end sheet metal parts to move up the quality level and turn to modern sheet metal machines.” said Mr.Matumoto.

As a long term strategy, the AMADA group invested Rs. 52 million in a software development and research center, AMADA SOFT INDIA (ASI), set up in Chennai Research Park in 1996 with full support from IIT Madras.

ASI, the core competence center of Amada Group, develops software solutions in the areas of Computer Aided Design (CAD) and Computer Aided Manufacturing (CAM).

In addition to developing sheet metal specific 3D and 2D CAD software for Design and manufacturing applications, the facility develops CAM software for laser processing machines, punching machines, punch-laser combination, bending processing in manual DNC bending machine and automated robot bending machines, welding processing in manual CNC welding machines and automated robot welding machines as well as PLM or the core Data Management Software. Frequent and regular interactions between the machine and controller development teams in the Group's Japan Head Quarters and the ASI engineers in Chennai result in the parallel development of CAM software for all new sheet metal products.

IITM Students are involved in R&D projects that AMADA executes with IIT Madras. Master students and doctoral students use the sheet metal research center facilities for their course and research project work. Some of the software engineers of AMADA SOFT INDIA register for doctoral studies in IITM .Amada Soft India also  recruits students from IITM and other IITs.

"With a 120 member team we have developed 80% of AMADA global software products and have undertaken several fundamental R&D projects in Sheet Metal Engineering with IITM Madras", said Dr. Thanapandi Periasamy, President & CEO of AMADA Soft India. He added, "Amada Soft India recruits five to ten engineers every year and the attrition rate of the company is low compared with any other software development company."

HAL and Rolls-Royce begin facility for engines

HAL and Rolls-Royce on Wednesday commenced construction of a new manufacturing facility in Bangalore.

This state-of-the-art facility is owned by International Aerospace Manufacturing Pvt. Ltd. a joint venture between HAL and Rolls-Royce, formed in 2010. This 7,200 sq m, purpose-built production facility will produce components for the technologically advanced Trent family of civil aero engines, as well as for a number of marine and energy gas turbines.

Located near the HAL Airport, it will start production in 2012. IAMPL will incorporate the latest Rolls-Royce manufacturing techniques and will create job opportunities for highly skilled technicians and engineers in India.

Officiating Chairperson P.V. Deshmukh said in a statement Rolls-Royce and HAL have been strategic partners since 1956 when HAL started producing the Orpheus engine under licence. “As a result of our strong collaboration we have contributed to the development of Indian aerospace industry.”

Anil Shrikhande, Rolls-Royce, President-India, said: “We plan to develop IAMPL as a centre of excellence with the latest manufacturing techniques and training programmes.

Indigenous AWACS radome developed in Bangalore

India has taken a big step forward with the first flight of an indigenous airborne radar, which when ready for operation would become a force multiplier for the armed forces with potential to change the strategic dynamics in the subcontinent.

 

The first fully modified Brazilian Embraer aircraft fitted with indigenous Airborne Warning and Control System (AEW&C) took to skies on December 6 at Sao Jose campus of Embraer in Brazil with about 1000 mission system components developed by Indian defence scientists.

The most crucial component in AEW&C was the active electronic scanning antenna (AESA) radar, which has better reach and capability. Bangalore-based Centre for Airborne Studies developed the Indian AESA radar.

“The flight is a major milestone towards realising the dream of an indigenous Airborne Early Warning and Control System, which will put India into a select club of countries,” said V K Saraswat, scientific adviser to the defence minister and DRDO chief.

While the first indigenous aircraft will undergo full certification process over the next two years, India will receive two aircraft by the middle of 2012, which will be equipped with various systems and electronic components, currently being tested at CABS.

 

India currently operates three Israeli Phalcon AWACS – fitted on Russian made IL-76 – and likely to offer three more. The first three were purchased in a $ 1.1 billion deal, which was supported by the USA, notwithstanding objections from Pakistan.

Defence minister A K Antony acknowledged in the Rajya Sabha on Wednesday that a proposal for procurement of additional IL-76 based AWACS from ELTA Systems Limited, Israel, under option clause of previous contract signed in March, 2004 is under the consideration of the government.

Detailed test
Two indigenous systems would be delivered to IAF after detailed test and evaluation by 2013, said a DRDO official. The Indian AWACS programme originally began in the 1990s but came to a screeching halt after an Avro aircraft carrying the Indian instrument crashed in Nilgiri hills in Tamil Nadu in 1999.

Sothebys to market luxury property in Bangalore

International auction houses that you normally associate with highstake bids are entering the luxury property marketing business in India.

Sothebys International Realty,the luxury real estate brokerage arm of auction house Sothebys,will market Four Seasons private residences in Bangalore being developed by London-based Westcourt.The project,City View,a joint venture of Westcourt,Goldman Sachs and Century Real Estate,will house the Four Seasons hotel and 110 branded residences on a 6.5-acre property near Mekhri circle in North Bangalore.The residences,between 1,800 and 7,500 sft,start at about Rs 4 crore;some go above Rs 10 crore.
Mumbai-based art auction house Saffronart has tied up with real estate consultancy Cushman & Wakefield to launch a venture called Prime Properties to source and market premium residential real estate through private sales.Early next year,Saffronart plans to leverage its auction platform to auction luxury properties online.
Though an art auction house is a distinct entity from the real estate division,the crossover point is of practical interest for developers and individuals eyeing a targeted client base.Art can be a passionate purchase,as can be real estate.There is a distinct advantage for us in being able to connect with art connoisseurs who also intend to buy expensive real estate, said Philip Grant,project director,real estate sales & marketing at Sotheby's International Realty.Sotheby's Auction House,founded in 1744,has earned renown as a marketer of the worlds most valuable and fine possessions.
Westcourt sponsored an Indian art exhibition in New York in September that attracted crowds from the art and business world who had an opportunity to preview the Four Seasons branded residences at the Sotheby's art gallery there.
On the Saffronart website,a 3-BHK apartment measuring 3,100 sft overlooking the Race Course in Bangalore has an asking price of Rs 6 crore.A 4,300 sft colonial style Le Bougainvillea villa is also up for sale;the asking price is available only on request.
Nish Bhutani,COO of Saffronart,said that such a distinctive marketing platform not only exposes exclusive properties to the Indian and global audiences,but it also gives comfort to the buyer that the property is free from encumbrance or litigation.
Shveta Jain,director for residential services at Cushman &Wakefield India,said its tie-up with an auction house facilitates a price discovery mechanism for individuals and HNIs in a timebound manner.It allows the owner to ascertain property prices to maximize his gains, Jain said.Currently,property prices are ascertained based on prevailing market rates and the last transaction in that area.
Saffronart has marketed 26 properties in the last one year with an average price of Rs 4-5 crore for holiday homes and Rs 12-15 crore for luxury homes in the metros.

Hip Bangalore is third most favourite in 2012

 

Those who live here crib about everything that’s wrong with the city, but the accolades keep pouring in. Lonely Planet, the world’s largest travel guide and digital media publisher, has just ranked India’s Silicon Plateau its third most favourite city in 2012.
“The undisputed Elvis of South Asian mega cities, Bengaluru is in a class of its own when it comes to redefining flamboyance,” says Lonely Planet. Third only after London and Muscat, and the only Indian city to make it to the chosen ten places, Bangalore is ahead of Hong Kong and Stockholm.
“Perpetually drunk on good life”, Bangalore, the travel guide says, packs the ‘best brews’, the scrummiest cuisines’ and the ‘liveliest arts and music scene’, besides the ‘hippest population’. 

 

 

THE FIVE 5 

1 London — The Olympics are coming to town and this capital is being transformed for the big event 

2 Muscat — Oman is firing on all cylinders to attract international visitors and the focus is cultural events, luxury accommodation and aquatic activities 

3 Bangalore — Evenings in the ‘capital of cool’ are poised to get even more intoxicating 

4 Cadiz — A peaceful pocket of old-world Spain, sleepy Cádiz undergoes a transformation once a year and hosts a raucous carnival – a 10-day bender of drinking, singing and dancing 

5 Stockholm — Cosy yet cosmopolitan, wilfully alternative and effortlessly picturesque Namma Metro wins accolades Pubs, Culture Win Lonely Planet Vote

In Lonely Planet’s eulogy to Bangalore, Metro rail connectivity finds a special mention.
“Bengaluru’s new highspeed Metro network now ensures that your favourite watering hole is easier to reach than ever,” Lonely Planet says. “The coming years will put all of these cities in a fresh light, whether they are showing new flair with music and art festivals or dusting off preconceptions by showing their wilder streak.”
Mohan Isaac, visiting professor of psychiatry at the National Institute of Mental Health and Neurosciences, says: “It’s nice to see Bangalore figure third in top ten favourite cities. While the city is infamous for being the suicide capital, it’s great to note it has also managed to get to the top in the travel section.”