Bangalore property sales down by 40 per cent in Q1

Developers are seeing drop in footfall, enquires and in delay in deal closure.

 

Residential property sales across Bangalore have dropped up to 40 per cent in April-June quarter as compared to the peak of Q4 2012, as IT professionals remain cautious due to high prices and interest rates.

"Southern real estate sales are largely driven by IT clientele (60-65 per cent). Developers are seeing drop in footfall, enquires and in delay in deal closure. New apartment sales booking for real estate brokers has dropped to 30 units in Mar-12 to 16 units during Jun-12 and the leads in hand suggests further weakness during July-12," Karvy Institutional Research, a brokerage firm.

The 3 bhk segment priced at Rs 80 lakhs to 1.3 crore was worst impacted. "The current sluggishness in the IT sector coupled with 'fattening of benches' is playing on buyers psyche. Buyers are reluctant to lock-in at peak prices on back of recessionary fears, and are following a "wait and watch approach" until clarity emerges over next 6 months," mention Karvy.

Even the affordable housing bracket with Rs 3-4 million ticket size is witnessing lack of buyers interest. "Price correction of 10-15 per cent is necessary to revive 30-40 per cent drop in volume, next two month crucial. Buyers are demanding 10-15 per cent price cuts before taking a plunge," says Karvy.

Karnataka to set up hardware park

The government of Karnataka is setting up a new hardware park in an area of about 300 acres, near Bangalore International Airport (BIA) at an estimated cost of Rs 650-750 crores. Taiwanese companies will be invited to set up their units and collaborate with their Indian counterparts.

Karnataka, principle secretary, department of commerce and industry, MN Vidyashankar, said, “We have invited TCA (Taipei computer associates) and Taitronic (Taiwan electronics). Most of the Taiwanese companies are small scale, but 90 per cent of the laptops come from Taiwan”.

He added that there is a lot of interests shown by Taiwanese companies. The park would be part of the Karnataka government’s efforts to promote hardware development to complement the large number of companies involved in software development. Vidyashankar, said that more than 50 companies had already expressed their interest to be part of the park.

“We are spending about Rs 650-750 crores for land and development and would be able to make the money by selling it to interested companies. The revenue from the companies planning to set up here could well be over 10 times of our investment”, he said.

The work for the park will start from September and Ascendas will develop it. “Only 55% of the total land can have concrete structures as per the by laws and over 50 units of Consortium of Electronic Industries of Karnataka (CLIK) have taken over 50 acres and planning to scale vertically”. He said about 250 companies could be hosted.

The government of Karnataka also announced to host a new start up booster program in its upcoming 15th annual flagship event of Bangalore IT.biz, called ImpressIT programme. The new program will incubate at least 10 startups by facilitating funding from venture capital. The start up booster program will reach out to 194 engineering colleges across Karnataka.

SAP Lab, managing director, VR Ferose, said, “We will make the process of submitting the proof of concept very easy. Students across the state can submit their ideas online. And industry leaders will evaluate their ideas. Finally, 10 short-listed ideas will be given opportunity to be present in the event, Bangalore IT.biz. We will also invite venture capitals and investors, and students will be able to pitch their ideas before them for funding”.

Bangalore is English film capital

Collections of The Dark Knight Rises vindicate higher cost of distribution rights for Hollywood films as compared to Mumbai and Delhi

The Dark Knight Rises (TDKR),the latest (and presumably last) installment of the Batman saga,is a box-office sensation in Bangalore.In the last two years,Bangalore was emerging as the 'English film capital of India'.TDKR has reinforced the tag big time.

In the first week of its release,the film has grossed an astounding 5 crore (net = 2.2 cr) in Bangalore,which equals or easily surpasses the state-wide collections of big-budget Kannada,Tamil and Telugu films.In the process,TDKR has rewritten many box-office records.

Ramesh A of Aum Films,which is the distributor of the film in seven areas across the country,including Mysore-Karnataka,says,For English films,Bangalore contributes at least 80 per cent of the collections in this territory.In the first week,each and every show of TDKR in the city was houseful.I am talking of around 140 shows per day.Of these,115 were in multiplexes.

THIS IS NOT A ONE-OFF

Those in the film business say that this is not a one-off affair.Mars Suresh,a distributor,says,For most recent Hollywood films,distribution rights for Bangalore have been sold for higher sums than that for Mumbai or Delhi.The non-refundable amount (NFA) paid for TDKR is 3 crore.It was 2 crore for A v e n g e r s.

Hardly any local film gets so much NFA.The distribution rights of S p i d e r m a n for single screen theatres alone were sold for 1.3 crore,which is an impressive figure considering that most of the revenue for English films comes from multiplexes.

RECORD COLLECTION SEALS THE DEBATE

The collections at Urvashi would explain the enthusiasm.Ramesh says,After rentals and taxes,the distributor got a net of 25 lakh from the single screen theatre in the first week.It is a record not only in Bangalore but the entire country.No other single screen theatre in India even comes close to this figure.The second best is Rex theatre,which brought in 15 lakh.Even this figure is big compared to the rest of the country.

Hollywood films,however,still do not match the collections of big Tamil and Telugu films in Karnataka.The recent Telugu blockbuster E e g a is estimated to have grossed 10 crore in its first week.Discounting 6croreforentertainment tax (30 per cent) and theatre rentals (30 per cent),the producers (who distributed the film without involving local distributors) were richer by 4 crore.

Producer and distributor N Kumar attributed Bangalores rise to its metropolitan population.Bangalore is a multilingual city.It has the cream of the working population from all regions of India,many of whom are English educated.It is not that every English film has a good run in Bangalore,but its market has emerged as the biggest for English films.

Ramesh says,The population of Bangalore may be less than Mumbai or Delhi,but the number of people willing to pay and watch Hollywood films in multiplexes is more.

Over the past few years,Bangalore has matched the collections in Mumbai and Delhi.It was only a matter of time before it overtook the other two.Bangalore is a big bonus for Hollywood producers who are increasingly releasing the films directly instead of going through distributors.

T i n t i n,A v e n g e r s,S p i d e r m a nand TDKR,allofwhichwerereleasedinthe recent past,made impressive collections in Bangalore.

DARK KNIGHT VS AVATAR

To put things in perspective,lets compare the collections of The Dark Knight Rises with Avatar,the biggest Hollywood hit in Bangalore and Karnataka so far.Avatar grossed 12 crore in four months.TDKR is expected to overtake this figure in the next two weeks.

Realty is that city offers a cheaper option

Bangalore may be the most expensive as per RBIs Consumer Price Index,but its property market rules the most affordable bracket

Even as Bangalore is termed as the most expensive city,there is something to cheer about the cheapest realty market in the country with quality construction and amenities.

A recent analysis by the National Association of Realtors India (NAR India) has put the city's mid-segment residential properties and commercial rental spaces in the most affordable bracket compared to other metros and cities.The analysis was carried out a month ago at NAR Indias conference in Mumbai,with inputs from industry representatives from all over the country.

The mid-range housing properties in Bangalore in the range of Rs 3,500-4,500 per sqft would come for nothing less than Rs 7,000 in Pune,Chennai,Hyderabad or Gurgaon. Delhi and Mumbai would offer the same spaces for Rs 9,000 per sqft.

The city has the lowest rentals for commercial /office space.In peripheral areas,the rate is around Rs 27-45 per sqft,which would be upwards of Rs 75 in other cities.The figure goes up to Rs 75-90 /sqft in the core regions.In Delhi and Mumbai,the same space is available for Rs 150-200 /sqft.

Farook Mahmood,CMD of Silverline Realty and the founder-president of NAR India told  that buyers in Bangalore are also more discerning compared to customers elsewhere.They have a lot of awareness,are sure about what they want and are unwilling to compromise, he explained.

CITY HAS COSTLIEST TAG

In March this year,the Reserve Bank of Indias Consumer Price Index (CPI) termed Bangalore as the costliest Indian city.The parameter considered for the CPI was daily consumables and Bangalores scored 200 vis--vis the national average of 198.The prime reasons for the high cost of living are fuel price,abysmally high taxation structure and growth in the IT sector.

According to Bharat Petroleum's latest figures,the costofa 14.5-kg LPG refill in Bangalore is Rs 415,Kolkata Rs 405,Mumbai Rs 402,Delhi Rs 399 and Chennai Rs 393.

Rajesh S,a 31-year old automobile engineer working as the area service manager for a leading automotive company,puts the issue in perspective.He has lived in Mumbai,Pune and Bangalore.In Mumbai,Rajesh and his wife stayed in Chemburina 2BHK flat of about 800 sqft payinga rent of Rs 25,000.The same house would cost Rs 12,000-15,000 in Bangalore.

Bangalores property prices are definitely reasonable.Now I live in Viveknagar in my own house,which would cost Rs 2-3 crore in Mumbai.I cannot even dream of buying something like this in Mumbai, he says.But barring rentals,transport and food are quite reasonably priced in Mumbai.Fuel is cheaper in Mumbai.Also,taxes are not this high in Mumbai or Pune, he adds.

Despite the high cost of living,Bangalores commercial spaces are seeing great demand from companies outside the state and MNCs.This year alone,about 13 million sqft of office space has been absorbed.

Around Whitefield,you still get office spaces for Rs 27-35 /sqft, says Mahmood.

Direct tax dept plans institute on 400-cr HMT land

In what could be possibly one of the largest real estate deals in the city,the Direct Taxes Regional Training Institute will buy 20 acres of land for an estimated value of Rs 400 crore from ailing public sector company HMT Ltd,close to its current facility at Jalahalli.

The move is being seen as a double deal of sorts for the Union government as it would facilitate the construction of a global taxation training centre in the country,while also funding nearly 50 per cent of HMT Ltds costly revival plans.

The deal,which is awaiting formal approval from the finance ministry,will be the first step in the setting up of a global training campus on taxation an urgent need considering the department is swamped with requests from several countries to train tax personnel.Construction work on the new facility is expected to commence  a year from now.

Jahanzeb Akhtar,director of the facility,said that the deal would be finalised at current market prices that puts the total value at Rs 400 crore. Akhtar,who spearheaded the successful commissioning of the present facility which was formally inaugurated in April last year,said several countries including Sri Lanka,Bhutan,Oman,Brazil and South Africa are keen on sending their tax collectors to train in India.She revealed that the apex body,the National Academy of Direct Taxes in Nagpur,has been inundated with requests from foreign personnel to train in a wide range of subjects such as advanced transfer pricing,international taxes and e-commerce.

Should the deal go through,it would finance nearly half of HMTs revival package,which is pegged at Rs 980 crore.A sports stadium with a functional cricket pitch sits on part of the land,but Akhtar claimed these facilities would be left intact.

The present training centre is a three-star recognised facility of the central government,which boasts zero waste discharge and state of the art technology for communication and training.It had cost the tax department Rs 30 crore and is spread over 1.25 lakh sq ft with accommodation for 110 trainees,dining facility for 75 and a small gym.

The initial brief from the then finance minister P Chidambaram was not to make it into another shabby government building, Akhtar said.Today its a seed of change and a visible repository of excellence.

This is not the first time the direct tax department has been involved in a deal with HMT.In fact,their association goes back a few years.The department had purchased what used to be HMTs corporate office at Mekhri Circle.HMT also sold part of its land holdings to realtor Prestige Group.

Why tech biggies still prefer Bangalore over Gurgaon

After the initial sluggishness witnessed in the leasing of prime office space in the first quarter of 2012, the rise in absorption across key markets with over 7 million sq ft of office space being absorbed is good news for the real estate sector in the country.

But Bangalore and Hyderabad’s property market rules the ‘most affordable’ bracket with quality construction and amenities.

And guess who is taking advantage of this affordable leasing? Some of the world’s tech biggies like Facebook and Amazon.


Bangalore and Hyderabad’s property market rules the ‘most affordable’ bracket with quality construction and amenities. AFP

According to a report in the Economic Times, Facebook, Amazon, Xerox are among companies that have leased office space in India’s technology capital Bangalore and Hyderabad, which is home to companies such as Google and Microsoft.

“The general rule of thumb is to provide 75-80 sq ft of usable space for every employee. By this estimate, Facebook’s Hyderabad office can accommodate approximately 500 staff and Amazon about 5,000,” said the ET article.

But why do IT companies still prefer Bangalore even though Gurgaon has evolved as a hub for BPO companies?

Because Bangalore has the lowest rentals for commercial/office space. In peripheral areas, the rate is around Rs 27-45 per sq foot, which would be upwards of Rs 75 in other cities.

The figure goes up to Rs 75-90/sqft in core regions. In Delhi and Mumbai, the same space is available for Rs 150-200/sqft, or more.

According to the latest office market report from real estate consultancy firm Cushman & Wakefield, Bangalore witnessed the highest absorption of office space in the first six months of 2012 of 3.01 million square feet.

This is because compared to Hyderabad and Chennai, Bangalore’s commercial office market has witnessed steady growth in demand, supply as well as rentals. There may have been some fluctuations, but the overall trends are positive.

“With absorption mainly being concentrated in the peripheral locations of the city such as Outer Ring Road, this resulted in an appreciation of rents of up to 10% in the peripheral areas,” noted the report. Lower or deferred rent escalations and free car parking slots are also major factors in this preference for Bangalore.

Another reason is space. In a market where companies are increasingly looking at cutting costs by consolidating their different offices within a city to single, large and cheaper location, Bangalore wins hands down, when compared to Mumbai or NCR.

A huge integrated suburb is under development in northern Bangalore, offering space to IT companies and also providing housing. Also a number of infra projects are being constructed to improve connectivity to the suburbs, including a metro rail service that will start later this year, a high-speed rail link to the city’s new international airports, and ring roads and elevated expressways.

Giant leap for hiring: Facebook, Amazon lease space in Bangalore, Hyderabad

Some of the world's biggest technology companies have booked acres of office space in Bangalore and Hyderabad, real estate agents said, indicating that investments are proceeding apace in the software sector despite a generally gloomy mood for businesses.

Facebook, Amazon, Xerox and chipmaker AMD are among the companies that have leased office space in India's technology capital Bangalore, or in Hyderabad, which is home to companies such as Google and Microsoft.

Including tax preparation software maker Intuit, these five companies have in recent weeks leased more than 6 lakh sq ft, a precursor to hiring thousands of professionals.

The general rule of thumb is to provide 75-80 sq ft of usable space for every employee. By this estimate, Facebook's Hyderabad office can accommodate approximately 500 staff and Amazon about 5,000.

Analysts said the plans are a testament to India's continued attractiveness as a source of technology talent for top international corporations, which have made a long-term commitment to India.

"For companies that believe in the long-term story of India, this is probably a very good time as you can get real estate and talent at relatively lower cost," said Sunil Chandiramani, national director for advisory services at audit and consultancy Ernst & Young. "The fact remains that India represents a large consumer base. Growth may be muted now, but it is still a growth story."

 Facebook, which set up its first local office in Hyderabad in 2010, raised $16 billion in a share sale in May and has said it regards India as one of its most important markets.

Amazon, which entered India through Junglee.com earlier this year, has a development centre in Hyderabad.

Hirings on Despite Slowdown

The Amazon centre in Hyderabad creates solutions for the complex ecommerce operations of the world's largest online retailer.

The $100-billion Indian software and services sector has been coping with slower rates of growth but it is still hiring in large numbers. In the year to March alone, the top five IT services companies are expected to hire more than 1 lakh professionals. The sector employs about 3 million.

Almost all of the world's foremost technology companies have operations in India and have pressed ahead with their plans regardless of the widespread perception that the country is losing its sheen as an investment destination.

"We are hiring in Bangalore, Hyderabad and Chennai, and will continue to grow our business in India," Amazon said in a statement.

Amazon has committed to take on lease 1 lakh sq ft in Hyderabad's HITEC city, adding to 3 lakh sq ft it leased last year in Bangalore's World Trade Centre. For Facebook, which set up its first India office in Hyderabad in 2010, the expansion is expected to help add to its development force to cater to the fast-growing local market. Facebook, which boasts over 900 million users globally, declined to comment.

The social networking company has leased over 40,000 sq ft in Hyderabad's Raheja Mindspace IT Park over the past three months.

Typically, builders charge Rs 30-80 per sq ft in large IT parks. Amazon could be paying over Rs 2 crore as rent every month and Facebook nearly Rs 12 lakh.

"There are signs of slowdown in the market, but companies such as Amazon and Facebook are willing to invest in real estate for both expansion and consolidation. Most multinational firms are expanding and investing in cities such as Hyderabad and Bangalore where talent pool is high," said Ram Chandnani, deputy managing director at the Indian arm of CB Richard Ellis, the world's largest commercial real estate broker.
Chipmaker Advanced Micro Devices, which recently tied up with distribution firm TAG as part of its India expansion plan, has leased close to 1.2 lakh sq ft in Hyderabad.

Xerox, known for its printers and copiers, too is looking to lease some 2.5 lakh sq ft in Bangalore for its IT services arm ACS, and discussing how and where to set up the new centre.

Hindujas to foray into India’s realty sector

The Hinduja Group, with a global presence in core sectors like oil and gas, automotive, power, IT, banking and finance, today announced a major foray into the real estate sector in India involving an investment of up to USD 15 billion.
Just back from a visit to India, the Group Chairman S P Hinduja said here that the Indian economy “with its underlying strengths could become a beacon of hope in an otherwise bleak global environment.”

The Group has acquired a landbank of over 3,500 acres in metros like Mumbai, Chennai, Hyderabad and Bangalore for development of integrated residential and commercial townships, SEZs, with hospitality, healthcare and related facilities, he said.

These projects will involve an investment of USD 10 billion to USD 15 billion over the next five years, according to Hinduja.

The group was also looking at a portfolio of 10,000 MW in the power sector in the medium-term, he said. Implementation of a 1000 MW project is already under progress, Hinduja said.Expressing optimism over the state of the Indian economy, Hinduja said its fundamentals remained strong and it has the potential to bounce back to high growth of 8 to 9 per cent per annum.

“The slowdown currently experienced by the economy is largely due to external conditions and not, as a section of the business community and media say, by coalition politics, lack of leadership, corruption etc,” he said.

Hinduja said that the ruling and opposition parties in India were united in their resolve to reverse the present deceleration of growth momentum and make India more competitive in the global economy.

He also noted that India continued to enjoy great credibility in international forums and among global leaders, “which is a major plus.”

The leading UK-based industrialist said that non- resident Indians (NRIs) continue to repose confidence in the country with their remittances touching around USD 60 billion last year, the highest for the developing countries, including China.

He is also confident that India will go for more of economic reforms and liberalisation and will not revert to a state-led model.

Hinduja noted that India had plans for investment of USD 1 trillion in developing its infrastructure in the next five years.

“It is a win-win opportunity for India and the developed countries. The investment in infrastructure will help in poverty alleviation in India and acceleration of economic growth and jobs creation in the investor countries,” he said. He said India can leverage its rising international status to mobilise investments in the country by foreign investors and NRIs to meet the government’s target.

He said the investment priorities should be rural, semi- rural/urban areas.

“This will create employment opportunities where they are needed, helping alleviate poverty without distribution of subsidies, gifts and donations. The consumer market will be enlarged, contributing to increased production and economic growth,” he said.

At the same time, Hinduja underlined that one of the conditions for awarding mega projects should be building up of social infrastructure in education, healthcare, water supply etc in adjacent semi-urban or rural areas.

He also demanded that the government should reduce the large number of permissions required for starting up industries or infrastructure projects.

“The key in this regard would be to organise all central, state and local level clearances before the projects are awarded to investors. This would reduce corruption and ensure speedy and timely completion of projects,” Hinduja said.

He also said the Indian bureaucracy should be “sufficiently galvanised” with accountability and rewards.

“The concerned government departments should monitor the projects with a Project Implementation Review Chart having time-lines for completion of different phases of the projects. An incentive scheme should be in place for rewarding the government officials for timely completion of projects,” he said.

Hinduja also highlighted the challenge faced by India from the menace of corruption and black money.

“The main causes of generation of black money have been the requirement for funds to meet the expenses of political parties and to fight elections at local/state/national levels; the need for making illicit payments to secure government contracts and influence government policies etc,” he said. “This is a cancer which must be addressed. Unstructured, non-institutional political funding is the root of corruption in India. Electoral reforms may be introduced to regularise and make political parties accountable for funds received,” he said.

He also said that state funding of political parties’ election expenditure can be part of a large scheme of political, electoral and taxation reform to stop the flow of money into parallel economy.

He pointed out that many developed countries have opted for 20-30 per cent tax to make black money stashed abroad accountable.

“India could also consider entering into similar agreements with foreign countries so that the unaccounted wealth abroad can come to India and taxed. Such funds could help reduce India’s burgeoning fiscal deficit,” he said.

Most metros soared in property prices, Mumbai & Delhi-NCR witnessed maximum gains

Most regions in the top metros have seen prices soar by double digit percentages in the last three years with areas in Mumbai and Delhi-NCR witnessing maximum price gains. In Delhi, Dwarka and Gurgaon regions saw 64% and 50% price rise in 2012 when compared to 2010. In Mumbai, Mira Road, Thane and Navi Mumbai saw prices increase within the range of 48% and 51% during the same time period. These are the findings of 99 acres.com study on the trends in realty prices of key metros.

In Kolkata, North Kolkata race ahead in property prices as compared to other regions in these metros. In other metros, North Bangalore, North Chennai race ahead in property prices as compared to other regions in these metros.

Commenting on the same Vineet Singh, Business head, 99 acres.com said, “The real estate market in metros has always been an attractive destination for buyers because of its high returns on investment. In Mumbai almost 50% of the market is driven by investors. However, Mira Road area in Mumbai is dominated by end consumers because of its affordability factor and hence demand has been on a steady increase. The Dwarka region in Delhi has seen high growth because of development happening around that area and proximity to airport. Gurgaon again for years has been the most preferred destination for both end users, investors and companies. All big corporates have set up their offices in this area because of connectivity to airport and with metro extension connectivity with major parts of Delhi getting better.”

The NCR and Dwarka region of Delhi has seen massive price rise over the last few years. The average per square feet in Dwarka rate stands at Rs. 8910 in 2012 as compared Rs. 5420 in 2010. This indicates a whopping 64% increase in prices. Gurgaon, Noida and Ghaziabad does not lack behind too much with prices appreciating by 50%, 40% and 37% respectively over the same time period. Among the four regions in Delhi, the localities based in West Delhi have seen maximum price gain with the overall region witnessing approximately 47% rise in 2012 over 2010.

Most regions in the Mumbai area also show massive price growth. Mira Road in Mumbai saw maximum price growth with 51% increase over the last three years. Prices in both, Navi Mumbai and Thane area has seen 48% growth over in 2012 when compared to 2010. Plush localities in South and South West Mumbai make these regions the highest priced area in the country. The Per square feet rate stands at approximately Rs. 35000 for South Mumbai and Rs.27000 for south West Mumbai in 2012.

Kolkata has also seen price appreciation over the last three years. However, the prices in the city are much lower than the other top metros in the country. North Kolkata has seen approximately 35% price gains with psqf rates at Rs 3500 in Q2-12. This growth has been due to availability of ample Land combined with infrastructure development in North Kolkata. Extension of metro link in important pockets of northern suburbs has boosted connectivity in this region. The price gains for East Kolkata in 2012 have been around 27% when compared to 2010.

The Southern metros of the country do not lack behind too much. North Bangalore has seen price rise by 48% respectively in 2012 when compared to 2010. This is primarily because areas around Hebbal seem to be developing into a Manhattan of sorts with a wide range of high end projects on offer by reputed developers. South and West Bangalore saw prices appreciate by 27% and 6% respectively, while South Chennai saw stable price levels and West Chennai saw price appreciation by 38% in Q2-12 over Q1-10.

Infosys sets up dedicated facility for Apple work

There will be a lot more of India in Apple products soon. The $108-billion maker of iPhones and iPads is scaling up sharply the work it outsources to Infosys Technologies.

The Bangalore-based IT giant has rented a 1.40-lakh-sqft office space near its headquarters in Electronics City to house employees who would work exclusively for Apple. Sources in the real estate industry who did not want to be named said the building would have the capacity to house 1,400 people. The centre will be operational by the end of the year.

It was previously reported that Apple CIO Neil O'Connor had met the Infosys top brass in Bangalore in January, leading to speculation that Apple was looking at outsourcing more to Indian companies.

When contacted, Infosys said in an emailed response: "We are unable to participate in your story."

Apple, the maker of products like the iPod and iPad, outsources application development and maintenance work to the extent of Rs 490 crore to Indian IT services providers. It is said to account for $50 million (Rs 275 crore) of Infosys' annual revenue of $7 billion.

Assuming that the new space that Infosys is taking for Apple will house a new set of employees, it would mean that Apple would be giving an additional business of at least $65 million (Rs 357 crore) every year to Infosys, considering that each Infosys employee accounts for an average annual revenue of $47,000. Infosys has about 1.5 lakh employees.

Former employees of Infosys who had worked on the Apple account said the current work is being executed by employees across Bangalore, Mangalore, Bhubaneswar and Thiruvananthapuram. The ultra-secretive Apple does not disclose the nature of work it does with third parties. But the former Infosys employees said Infosys played a role in developing applications for iCloud — a service that allows users to access music, calendar, documents and email via the cloud and which automatically syncs with your Mac, iPad and iPhone.

Infosys has also worked on developing applications for Apple Retail Store 2.0 launched last year, where iPad displays took the place of paper placards in Apple stores. The iPad offered an interactive way to explore the features and prices of the products being advertised, and it even had a call button to summon an Apple representative to the product for assistance.

Infosys has also helped in the design of frameworks for the iOS, the operating platform for Apple devices that provides interfaces needed to write software for the platform. Many Infosys employees are trained on Cocoa, Apple's native objective-oriented application programming interface.

Apple, with revenues of $108 billion in 2011, is the largest publicly traded company in the world by market capitalization, thanks to the phenomenal success of the iPhone and iPad. The market cap briefly touched $600 billion in April this year and currently is around $571 billion.

In 2006, the company had moved to establish a 3,000-people strong technical support centre in Bangalore. But it withdrew within months following a massive backlash from Apple fans around the world who felt India would not be able to deliver the quality of support they expected. However, it looks like the quality of Indian IT outsourcing work has been too good to resist.

HIGH-PROFILE CLIENT

Infy has rented 1.4 lakh sqft office space to house 1,400
Apple dedicated employees
May mean an additional revenue of at least $65 million every year for Infy
Infosys already receives $50 mn in annual revenue from Apple
Infy has worked on applications for Apple's iCloud and Retail Store 2.0

Vajra Routes City Map - use the bus boss !

Click on Image for Larger View

Aviation minister keen to extend industry's mass reach

For a long time, Indian aviation was regarded as a rich man's mode of travel. A host of low-cost airlines changed that perception in the last decade. But more recently, with most airlines in deep financial trouble and airfares rising sharply, it is once again turning into a rich man's preserve. But the civil aviation ministry looks determined to stop this reversal.

"It is a vital sector for economic growth, and not just some rich man's play," union civil aviation minister Ajit Singh said on Tuesday.

Addressing the media post the meeting of the consultative committee for the civil aviation ministry in Bangalore, Singh said, "Despite the current financial troubles, one thing is clear, this sector is bound to grow as our middle class keeps growing."

But he cautioned about the pace of growth: "Our country's middle class cannot compete with the middle class of Britain, USA, or for that matter Australia."

The ministry is planning a slew of initiatives to help revive the industry. It is looking at a comprehensive civil aviation policy that will also focus on regulatory standards.

"The DGCA (Directorate General of Civil Aviation) needs to be revamped and strengthened. We are planning to replace the DGCA with a Civil Aviation Authority by bringing in a new bill in the winter session of Parliament," Singh said.

He said when the DGCA and AAI ( Airports Authority of India) were set up, the civil aviation environment was very different. "The technology has changed, the requirements of civil aviation has gone up in terms of number of customers and the kind of planes. There are issues such as navigation problems, congestion, because in India over 60% of the airspace is controlled by the defence services."

The ministry also plans to restructure the Bureau of Civil Aviation Security (BCAS) and to constitute a dedicated security force.

The minister said the main issue hurting the balance sheet of airlines is that ATF (aircraft turbine fuel) costs account for over 45% of an airline's operating cost. "ATF cost in India is about 60% to 70% more than that in our neighbouring countries as well as the US, partly because it's not a notified product." He added the imposition of taxes ranging from 4% to 30% by state governments on ATF is an added burden.

"We are trying to make it a notified product and are in dialogue with the oil ministry," said the minister.

The minister said there was a need to develop India as an international hub of passenger traffic and that his ministry had initiated action in this regard, including revisiting the policy regarding bilateral air service agreements with different countries.

On allowing international carriers to invest in Indian airlines, the minister said, "FDI in aviation will happen as soon as we have talked to all of our allies." At present FDI in aviation is allowed up to 49%, but restricts international airlines from participating.

Aerospace

Addressing a meeting of a group of manufacturers of aerospace products, the minister said that the aerospace industry in the country is still in its infancy. But he expressed the hope that the Indian aerospace industry would compete in the global market and would be capable of attaining international standards.

"We are hopefully that in the next decade or so the aerospace industry will be the driver of economic growth in India," said the minister and added, "Bangalore is way ahead of the rest of the country as far as this industry goes."

The minister assured the manufacturers that the specific recommendations of the Aerospace Promotion Council would be taken up with the concerned ministries and departments for speedy action and redressal of grievances.

Office space segment strong in Bangalore

The office space segment in Bangalore has proven to be more resilient than expected. Although this segment has witnessed a drop in demand, it is still remains healthy.

The overall demand for commercial office space remains subdued as compared to last year, implying caution and a lookout for quality supply at the right pricing.

"Last year the demand was around 12 to 13 million sq ft, while this year it is slightly lower at about 10 to 11 million sq ft," observes Avinash Rao, Regional Director-South, Knight Frank Pvt. Ltd. "This is primarily because of the overall economic conditions. Organisations are slowing down the decision-making process and are being cautious when making a purchase."

The demand is expected to be restrained for the entire year, with the IT and ITES industries contributing to incremental demand and other segments contributing to the exponential demand in the office space sector.

"Even though we are hiring and expanding this year, we are not recruiting the same numbers as last year. We are also focusing on consolidation of space," says a spokesperson of a large IT services firm.

And this is one factor that is still fueling growth. Industry consultant companies and other industry segments are the other contributors to the growth in this segment. These include the likes of Goldman Sachs, Cap Gemini, Caterpillar and Hindustan Lever.

Another trend that has been observed is just a marginal fluctuation in prices in business districts. Although business activity is shifting from central business district (CBD) to the special business district (SBD) and peripheral business district (PBD), there hasn't been much fluctuation in the prices.

"According to our estimates, the prices in the CBDs are stable while those in PBDs and SBDs are fluctuating marginally," says Rao. "The spaces available in the PBDs are primarily for large offices customised to requirements. The ticket sizes however remain more or less the same."

The operational model of this sector has however witnessed a shift. Players are moving from a sale-model to a lease-and-maintenance model. Several IT companies are looking to pre-lease office space to take advantage of the favourable commercial terms currently being proposed by commercial office space developers.

Steady housing demand boosts Bangalore developers

The Bangalore residential property market saw absorption of 4,290 units in the second quarter this year against 4,182 units in the first quarter, pushing the absorption rate up from 11 to 12 per cent, according to Jones Lang LaSalle's survey. While unsold stocks in Q2 remained at 32,854 units when compared to 32,978 units in Q1, vacancy rate has declined from 51.1 per cent to 49.5 per cent. This increase in demand was due to a combination of factors like improved sales for built units, investor sentiment over buying than renting and the entry of investors from other Tier I and II cities.

In all 18 residential projects were launched across the city's submarkets in Q2, offering 4,130 units against 5,791 units in Q1. Meanwhile, 15 residential projects comprising 2,336 units across various sub-markets were withdrawn from the active stock as they were completely sold out.

The Hosur road sub-market, comprising Electronic City, Bannerghatta Road, Sarjapur Road and the south-eastern parts of the outer ring road, contributed 35.0 per cent of the total new units available in Q2, while Bellary road sub-market accounted for 10.6 per cent. The secondary sub-market, comprising Indiranagar, Koramangala, RT Nagar, Sanjay Nagar, Old Airport Road, Banashankari, BTM layout, Marthahalli and parts of Sarjapur road, contributed 10.0 per cent of the total and the Tumkur road sub-market accounted for 17.2 per cent.

Among the landmark projects launched during the second quarter, specific mention should be made of DSR Sunrise Towers, Vaswani Brentwood, Embassy Lake Terrace, SJR Paddington, Brigade Orchids and DivyaShree 77'East.

Capital values appreciated marginally across various sub-markets due to increase in sales volumes and prices at most projects that are nearing completion. In fact, rentals rose in Q2 due to the influx of people and shortage of built apartments. The trend is likely to increase over the remainder of the year due to expected improvement in IT/ITES employment figures.

"The residential market is likely to continue its steady demand during the remainder of the year. Capital values are expected to stabilise and rentals for residential properties in the city are forecast to record marginal growth," says N S Srinivasa Reddy, Assistant Vice-President-Research, Jones Lang LaSalle. There may be fewer residential launches during the remainder of this year due to stable demand and large inventory of unsold space. However, areas like Whitefield, Sarjapur Road, Bellary Road and secondary sub-markets are expected to see a modest number of launches.

HC warns BDA against piecemeal approach in land use change

The Karnataka High Court on Thursday asked the Bangalore Development Authority not to adopt a piecemeal or case-by-case approach while giving permission for land use change in Bangalore.

“If you do it piecemeal, you’re in trouble,” a division bench headed by Chief Justice Vikramajit Sen observed while refusing to vacate or alter, for the time being, a January 25 interim order.

The court had asked BDA not to allow permission for redevelopment and reconstruction except for residential purposes in Malleswaram, Richmond Town, Vasantnagar, Jayanagar, Vijayanagar, Visveshwarpura, Rajajinagar and RT Nagar, among other localities. This order was issued on a batch of PILs relating to the Revised Master Plan 2015. The matter was adjourned to August 16.

BDA counsel’s plea seeking clarification on the interim order prompted the bench to ask: “Are there uneducated people at BDA? Can’t they understand our order?”

BDA counsel said: “We haven’t touched a single application since the January order… But in areas abutting ring roads, certain permissible usages are there in the master plan itself. We want to consider those applications on a case-by-case basis.”

However, counsel for petitioners, Citizens Action Forum, said such a permission would render the Karnataka Town and Planning Act redundant and complained that Section 14 A of the Act is being indiscriminately used. He also alleged BDA had granted nine such permissions in Malleswaram alone after the interim order.

Citizens Action Forum had claimed that master plan 2015, notified by the BDA on June 25, 2007, is without jurisdiction. “There has been steep reduction in the green belt area from 56% in the 1995 plan to 35% in the present one. In 1995, it was 714 sq km and now it has shrunk by 300 sq km. They have done away with zonal planning by permitting mixed use of land. The increase in floor area ratio (FAR) will increase the density of population and virtually choke the city. This exercise has been done ignoring suggestions of BMRDA as well as BWSSB,” it argued.

Notice to railways on suburban trains

A division bench headed by Chief Justice Vikramajit Sen ordered notice to the Railways and the state government with regard to a PIL seeking suburban rail services in Bangalore. Petitioner Satinderpal Chopra claimed that even though many cities like Mumbai, Kolkata, Ahmedabad and Hyderabad have been chosen for such a service, Bangalore has been neglected.

Office space demand in April-June 2012 quarter subdued as occupiers remain cautious

The demand for office space in the country remained subdued because of a cautious sentiment amongst occupiers. The total take up of office space in the April-June 2012 quarter was 5.9 million sq ft, a decrease of 21% q-o-q and 47% y-o-y, according to a recent report by property advisory firm DTZ.

The city of Bangalore saw the highest amount of space take up at 1.8 million sq ft. Mumbai saw a sharp fall of 68% in take up.

“The IT/ITES and BFSI sectors continued to drive leasing activity across the seven markets, but at a much lower level than seen in previous quarter. Occupiers generally remain cautious and the number of pre-leases declined considerably over the quarter. An increase in activity is expected, once more clarity emerges regarding the direction of the economy,” said the report.

The total stock of grade A office space in the seven main Indian cities stands at 379 million sq ft at the end of June 2012 as compared to 376 million sq ft in previous quarter.

The demand for office space in Delhi-NCR strengthened in the quarter with a total of 1.67 million sq ft, an increase of 92% q-o-q. “Demand in the NCR was primarily driven by the traditional IT/ITES sector followed by consulting and manufacturing companies,” said the report.

The peripheral business district of Gurgaon saw a 261% increase in take up of space and Noida witnessed the sharpest fall by 83% q-o-q. The central business district saw a slight increase in the availability ratio as companies moved to cheaper locations in Gurgoan and Noida.

The April-June quarter saw an overall reduction of 28% in new supply coming into the NCR market. Only 0.71 million sq ft of completed space was added to the market. “The drop was primarily due to the fact that developers delayed the delivery of projects owing to rising input costs and a liquidity crunch on account of high lending rates,” said the report.

Sogefi SpA : Sogefi (CIR Group): launches two plants in India

New suspension components plant opened in Pune and filter system factory in Bangalore doubled in size

The objective is to reach at least 5% of the group's total revenues in India in the next five years up from 1.2% in 2011. The initiative is part of Sogefi's strategy of growth in emerging markets Pune (India), Milan, July 4 2012 - Sogefi, the automotive components company of the Cir group, is consolidating its presence in India with the launch of a new suspension components plant in the Pune area and with the doubling in size of the factory producing filter systems in the Bangalore area.

Urban world: Cities and the rise of the consuming class

Numeca opens branch office in Bangalore

Belgium-based Numeca International, a software and service provider in computational fluid dynamics (CFD), has opened a branch office in Bangalore.

Opening of this branch office in India follows the opening of Numeca branch offices in Japan, the US and China.

This worldwide expansion is part of Numeca’s global strategy to bring its customer service to local markets and provide its software solutions to companies globally.

Development centre

The company is planning to set up a development centre in the near future, according to Numeca officials.

Professor Charles Hirsch, President and founder of Numeca, said: “An office in India will allow us to work more closely with local customers and will significantly reinforce the company’s position in this strategic market.”

Numeca's customers

Some of Numeca’s customers are in aerospace & defence, automotive, hydro-engineering, marine, power & propulsion and wind energy industries.

The customers include GE, Honeywell, Rolls Royce, Pratt & Whitney, Airbus, ABB, Siemens, Ford, Volkswagen, Honda, MAN, and Emirates Team.

Numeca International has direct offices and support centres in the US, China, Japan and India and partner offices in Russia, Italy, Spain, Poland, Indonesia, Malaysia, South Korea, Turkey, Germany, France and Taiwan.

Product strategy

The company’s product strategy is based on the development of automated, integrated and customised software systems allowing optimal and rapid simulation, design and optimisation and its India development centre is in line with that.

“Until recently, we have been working with Indian customers through our partners. Now, there will be a closer synergy between the customer and us. Numeca brings affordable technologies to help students and researchers to meet the growing needs of universities and research institutions’ engineering demands with OpenLabs. OpenLabs allows students to put their own physical models into CFD solutions without much programming skills. Numeca is strongly working with Indian universities, research institutions to bridge the gap between academia and industries with our attractive and cost-effective Numeca class-room packages,” said Mr Kishore Nellutla, India’s sales & operations head, Numeca.

Bangalore witnessed the highest mall supply of 1.5 million sq.ft. in H1 2012

Over 30% retail mall space delayed till next year: Cushman & Wakefield
According to a recent Cushman & Wakefield report, the Indian retail real estate market recorded a deferment of more than 30 percent of retail mall space against the projected supply for the first half of the year. Approximately, 1 million sq.ft. of expected mall supply was deferred to second half of the year or next year. The overall vacancy rate for the major cities as of H1 2012 stood at 19.6 percent, marginally higher than the previous quarter.

NCR saw the highest mall supply deferment of over 80 percent maintaining vacancy levels at 28 percent. The region saw only 120,000 sq.ft. of mall supply in Q1 and no supply in the second quarter of 2012.

Bangalore witnessed the highest mall supply of 1.5 million sq.ft. in H1 2012. The retail activity in the city continues to remain strong as the new mall supply became operational with 90 percent occupancy, whilst overall city level mall vacancy stood at 12.6 percent.

Commenting on the findings of the report, Jaideep Wahi, Director, Retail Services, Cushman & Wakefield India, said: “This slowdown in mall construction need not be viewed as a negative growth indicator for the retail real estate segment. The current pace is, in fact, expected to help in maintaining a healthier supply to demand equation; especially for oversupplied micro-markets. With high vacancy levels as well as cautious expansion plans of retailers, the deferment of supply is a necessary measure to bring stability in the retail market.”

The report also highlights that rental values across most mall destinations within these cities remained largely stable, except for certain micromarkets in Bengaluru, NCR, Kolkata, and Mumbai where mall rentals have seen a growth over the previous quarter in the range of 2-13 percent. Elgin Road in Kolkata recorded the highest growth in mall rents at 12.4 percent over last quarter mostly owing to renewals of existing tenants at a higher value.

In the same period, some prominent high streets across major cities recorded higher increase in rental values as against malls, reflecting the bent of interest amongst retailers for high street properties. Select locations across Bengaluru (MG Road, Jayanagar, Koramangala, and Vitthal Mallya Road) recorded rental increments in the range of 8-9 percent over the previous quarter. Camac Street in Kolkata saw the highest increase in high street rentals at 25 percent followed by MG Road in Bengaluru at just over 9 percent.

PE firm Blackstone eyes biggest real estate play

To Buy 36% Stake In Embassy Groups Office Portfolio For $230 Million 

 

 

Blackstone Group is set to acquire 36% ownership in the tenanted office space portfolio of southern developer Embassy Property Developments for about $230 million (Rs 1,300 crore),said bankers close to the transaction.

This will be Blackstones biggest real estate deal in India,giving it part ownership of more than 12 million sqft office towers housing prominent technology names that drive the outsourcing economy.

Embassy,one of the top business park builders in the country,is demerging the FDI complaint office buildings in which Blackstone will acquire a significant minority interest.Blackstone has signed a term-sheet with the Bangalore-based developer and is conducting due diligence.The companys commercial play has largely been focused on the development of business parks,of which the two largestthe 100-acre Manyata Tech Park and the 65-acre Embassy Golf Links Businessare situated in Bangalore.

The tenant list of Embassys office buildings spread across Bangalore,Pune and Coimbatore includes IBM,Accenture,Capgemini, Atos Origin,Cognizant,Fidelity,Mercedes Benz and Target.

Embassy Group CMD Jitu Virwani and a spokesperson for Blackstone declined to comment.Embassy had shelved a $500-million initial public offering (IPO) last year.

The transaction values Embassys new holding company for office buildings at $900 million after rolling over Blackstones earlier investment in one of the projects.

Blackstone had acquired HDFCs minority stake in a large business park for $100 million,and the latest deal takes overall investment to about $330 million.The Blackstone investment will cover only tenanted office buildings and not those under development.

Blackstone owns hotels,shopping malls and office buildings primarily in North America and Europe.The PE major has shown appetite for Indian office buildings and struck smaller deals with developers like DLF in the past two years.Blackstones real estate portfolio,with an estimated worth of $48 billion,include Hilton hotels and the recent acquisition of Motel 6 from Accor.

Private equity firms and global investment houses are allocating a part of their portfolio to risk-free income yielding assets,such as IT business parks,which provide 9% to 12% assured returns besides providing capital value appreciation.

Baring Private Equity Partners invested $100 million for a stake in the office space portfolio of another Bangalore developer RMZ Corp earlier this year,while Singapore-listed investment house Ascendas is in advanced talks to buy out an IT SEZ of Shriram Properties in Chennai.

BANGALORED! Carl Zeiss opens research, assembly line

The 4.2-billion euro German manufacturing company Carl Zeiss has established a research and development unit and two manufacturing facilities in Electronics City in Bangalore.

Carl Zeiss has been present in India since1998,butlargely as a sales and service business. The company manufactures an array of products ranging from prescription spectacle lenses to diagnostic and surgical equipments that are used in the fields of ophthalmology, neuro-surgery and cancer treatment, and in camera lenses. It also manufactures precision measurement tools that are used in the auto, aerospace, and power sectors, besides manufacturing equipments required for the manufacture of integrated chips.

Speaking to Media before inaugurating the company’s Bangalore campus, Michael Kaschke, president and CEO of Carl Zeiss AG, said, “The investment into developing the infrastructure at our campus is Rs 30 crore.” He added that the company’s total investment in India, which includes acquisition of assets, is 25 million euro over the past 8 years. The R&D, which has the abbreviated name CARIn (Center for Applications and Research in India), will focus on the medical technology sector andlooktodevelop medical equipments tailored to the Indian market requirements.

“In ophthalmology,thereis an 80% chance that a doctor in India would be using Zeiss equipment,” said Kaschke. The company won’t be manufacturing medical equipments in India,butthe medicalequipment portfolio contributes a high percentage to its India revenueof Rs 600crore.

“I foresee that in India, by 2015-16, we will have 1,000 employees (from 300 at present) and our revenues would cross Rs 1,000 crore,” said Kaschke, and added, “India is evolving into a strategic business segmentof theZeissGroup.”

On the manufacturing front, the company has established an assembly line that would assemble precision measurement tools. But the biggest space allocation at the company’s Electronics City campus would be for the setting up of a prescription spectacle lens manufacturing facility.The manufacturing facility will have an installed capacity to produce 2,000 lenses a day, which could be scaled up to produce12,000lenses per day.

V Srinivasan, MD, Carl Zeiss India, said, “Some 500 million people needeye glasses in India. But the addressable market, meaning, people who can afford to buy them is only 125 million.”

Revenue sharing partnership between landowners and builders on the rise

Businessman Vijay Gupta has accumulated so much land in Gurgaon over the years that he is left with 1,500 acre even after selling huge tracts to builders as the Delhi's suburb has grown into a global business hub. Finding it difficult to sell off the land, Gupta has joined hands with builders and given them the rights to build the property on his land on a revenue share basis.

Gupta is just one among several land aggregators who have turned developers.

"Land owners see an upside in holding on to their land and doing such joint developments rather than selling. Returns are better this way," says Anckur Srivasttava, chairman of GenReal Property Advisers.

Gupta, chairman of Orris Infrastructure, recently tied up with the Noida-based The 3C Company for a 48-acre parcel of land in Gurgaon. Since Gupta had already taken approvals and permissions to build a group housing project on the land, his partner is in a position to launch the project in just four-five months. If 3C had bought land on its own, it would have taken at least a year or more to kick-start the project.

Gurgaon-based Sidharth Chauhan of Sidhartha Developers, Sharab Reddy of the Triangle Group in Bangalore and Prashant Solomon of Chintels in Gurgaon are tying up such agreements with developers to maximise their returns.

"The cost of doing projects has gone up with higher construction cost and approvals taking time. In a JDA, the developer is rid of all these issues and since there is no interest burden the overall margins are better as well," says Sharab Reddy, managing director of the Triangle Group, which holds over 500 acre that it started collecting in the mid-1980s. "The risk, too, is shared between the two partners."

Reddy, who turned a developer in recent years, is building close to one million sq ft of space in Bangalore. Just last week, he signed a JDA with a large developer in Bangalore for a 100-acre township.

In a typical agreement, the landowner and the developer sign an agreement to share revenues in 40:60 ratio. Where the price of land is very high, in city centre locations, for instance, the ratio can reverse as well.

Bangalore-based builder Puravankara Projects has adopted a similar strategy for its affordable housing brand, Provident. "Land is expensive and there is no point investing such large sums upfront, especially for affordable housing projects," says chief operating officer Jack Bastian Nazareth

7 million sq ft of prime office space absorbed in Q2 as compared to 5 million sq.ft in Q1

Leasing of prime office space across key cities in India witnessed an increase in the second quarter of 2012 with over 7 million sq.ft. of office space being absorbed across key cities.

According to the findings of CBRE's latest report, India Office Market View Q2, 2012, The NCR, Mumbai and Bangalore accounted for over 75% of the entire space absorbed in the country.

This is an encouraging number when compared to the space take up recorded in Q1, 2012 which stood at approximately 5.4 million sq.ft. The India office Market View is a quarterly report which provides a summary of prime office rents across key cities in India.

Supply continued to overtake demand in the second quarter of 2012, with more than 9 million sq ft of office space being added across the leading cities of the country. The new supply was largely concentrated in NCR, Bangalore and Mumbai, comprising almost 96% of the entire quantum added in the present quarter.

Most of the supply added comprised developments that were delayed for the past several quarters, especially in Mumbai. Other cities such as Chennai, Pune and Hyderabad experienced delays in project completions and a rationalisation of the supply pipeline.

Commenting on the findings of the report, Mr. Anshuman Magazine, Chairman and Managing Director of CBRE, South Asia Pvt. Ltd said "After the initial sluggishness witnessed in the market in Q1, 2012, the rise in absorption of office space across key markets is good news for the real estate sector in the country. However given the current economic scenario, coupled with a slowdown in large space requirements from big global companies, overall, the office market may witness a drop in absorption this year. The demand - supply gap continues to pressurise values across most micro-markets and could have negative implications on the rental growth. Improvement in the current situation will depend on the global economic environment and the government policies in India."

Bangalore-based Anu Solar to open 2,000 solar product stores in India

Solar powered electronic products will now be available at retail stores across the country. These stores will sell varied products ranging from solar water heaters to solar powered calculators, caps with fans that run on solar power, solar power storing batteries and inverters.

Bangalore-based Anu Solar pvt ltd, a leading manufacturer and seller of solar products, will open 2,000 stores across India on franchisee basis.

"These will be called 'one-stop experience stores' as the store and all the office equipments will also run on solar power, in order to show the public, the use and benefits of solar power," said T J Joseph, managing director, Anu Solar.

The government wants to encourage the use of solar energy but currently there are no private retailers for solar products.

The ministry of new and renewable energy has been promoting private entrepreneurs to open 'Akshay Urja shops' to sell and promote solar products but since 2002, only 300 shops have been established across the country and a good number of them are not functioning and there is no shop in the capital.

"We want the public to experience the power of solar and also raise awareness for the same," said Joseph. For Delhi, Joseph said there was an expression of interest from a client who plans to open 40 retail stores.

The company plans to make at least 20 stores operational by the end of the year, including one each in Bangalore and Madurai by September. With an investment of around Rs. 25 lakh per store, the turnover expected is Rs. 6 crore per year per store. By the end of the current financial year, the company hopes to open 50 stores.

These stores will sell a variety of products at MNRE subsidised rates. "As we are channel partners with MNRE, we provide government-approved subsidy on all products," said Joseph.

Solar photovoltaic cells, solar power storing batteries, inverters, solar water heaters are some of the products which the company will propagate the most and major sales will depend on them.

But to raise awareness and draw the interest of the consumers, the company has planned to put on display some interesting stuff like caps with fans that will run once you are out in sun, toys and calculators that can be recharged by solar power, bags with solar powered mobile charging points etc.

There is a 5-year unconditional warranty on all the products except solar power storing batteries for which the warranty period is 3 years. Anu solar will train the staff and will provide after-sales service on all the products.

Bangalores office space absorption shrinks

Office space absorption across key metro cities in the country in the first half of 2012 saw a decline of 21% at 13.4 million sqft as compared to the same period a year ago,when 16.9 million sqft was absorbed.
The latest office market report from real estate consultancy firm Cushman & Wakefield says that while Bangalore witnessed the highest absorption of office space in the first six months,of 3.01 million sqft,the city registered a 46% decline in absorption over the same period last year.Chennai reported a 12% decline in absorption.
This slowdown in demand is due to the cautious expansion plans of the IT/ ITeS sector as majority of demand in these cities is driven by the sector, said the report.
Sanjay Dutt,executive MD,South Asia,Cushman & Wakefield,said,The demand from the IT/ITeS sector is likely to remain subdued resulting in low leasing activity.
The National Capital Region saw the highest decline in office space absorption of 53%,but Mumbai and Hyderabad bucked the trend,registering 19% and 5% increases in absorption respectively.
The decline in office space leasing is indicative of a cautious approach from the occupiers,given the downward revision on the GDP outlook for the year, said Dutt.He added,There was some pent up demand from sectors such as BFSI which was absorbed,especially after a revision in RBI policies that where welcomed by certain domestic sectors.
Despite registering a fall in the absorption rate,Bangalore witnessed the highest addition of office space supply of over 4.1 million sqft in the first six months of 2012.
The report said that absorption in Bangalore was concentrated in the peripheral locations of the city such as Outer Ring Road,resulting in appreciation of rents of up to 10% in these areas.Bangalore is expected to be one of the most volatile office markets in 2012 given the rapid economic changes in India as well as across the world, said Dutt.

PROBLEM OF PLENTY

The slowdown in demand is due to the cautious expansion plans of the IT/ITeS sector Bangalore witnessed the highest addition of office space supply of over 4.1 million sqft in the first six months of 2012 Office space absorption in Bangalore was concentrated in the peripheral locations of the city such as Outer Ring Road