RMZ Corp forays into residential market

Leading corporate real estate developer, RMZ Corp, is charting a new course by foraying into the residential realty space.

The Bangalore-based firm is looking at residential realty market as a new thrust area to propel growth for the company. In tandem with its plans, the firm is looking to have a 60% residential and 40% commercial and retail portfolio in the next two years.

"We are focusing on residential segment as the market is reviving faster. We plan to build 10 mn sft in five years and expect 20% of total turnover to come from residential segment," says Raj Menda, managing director RMZ Corp.

RMZ plans to build 470 units residential projects comprising of high end villas and condomium ranging between Rs 70 lakh and Rs 5.8 crore in Bangalore. The projects are expected to be completed by 2014.

"We will invest Rs 900 crore across our three bangalore projects but will look at raising equity once we plan to ramp our business by mid this year," he added.

To double its commercial portfolio in the next two years, RMZ Corp is shopping for distressed assets in Chennai, Hyderabad and Bangalore. The firm is in talk to buy 15,00,000 sft of Grade A distressed office space in Chennai and Bangalore.

"We plan to expand our commercial portfolio by purchasing distressed properties, as it is cheaper to buy," said Menda. However, he refused to share details on the same. RMZ currently has 3.4 mn sft of commercial property under construction.

RMZ has recently bought 25 acres of land in the outer ring road, Bangalore from Adarsh Developers to increase its footprint in the city. The transaction is valued at Rs 1000 crore.

The company, has so far, acquired and developed over 13 million sq ft and manages a property portfolio in excess of $2 billio

Brigade Group targets Rs 3,000 crore revenue from integrated development

Bangalore-based property developer, Brigade Group, targets total revenue of Rs 3,000 crore from its integrated development, Brigade Orchards, in Bangalore.

"The project is estimated to cost around Rs 2,000 crore, including the land cost of Rs 350 crore. We have fully paid up for the land, and the project would come up in phases," says Kailash Advani, Chief Executive Officer, BCV Developers.

BCV is a special purpose vehicle between Brigade and Classic Valmart.

The SPV is developing a 120 acre mixed used project, expected to be completed in the next five years. "The project will be funded through internal accruals, construction finance and equity infusion from private equity funds. Each party can dilute up to 24% in it," said Advani.

The project will comprise of luxury villas, value homes, premium apartments starting from sub Rs 10 lakh to Rs 3 crore totalling to 3,500 and 4,500 residential units.

Brigade, currently has 2 enclaves, 12 residential and 2 hospitality properties totalling to 13.84 million sft under development across South. It has total land bank of 400 acres spread across seven cities. Out of the total land, 58% is in Bangalore, Mysore and Chikmagalur account for 18% and 12%, respectively

The company's stock closed down by 4.24% on BSE on Friday.

No mixed land use in residential areas

The Karnataka High Court on Wednesday directed the authorities to stop issuing permission forthwith for mixed land use (including commercial) as per the Revised Master Plan (RMP) 2015 for Bangalore city in areas that were classified as ‘residential zones' in the Comprehensive Development Plan (CDP) 1995.

A Division Bench comprising Chief Justice Vikramajit Sen and Justice B.V. Nagarathna passed the interim order while hearing a public interest litigation (PIL) petition filed by Citizens' Action Forum (CAF) in 2008 challenging the RMP 2015.

“We direct that in the following areas of the city — Malleshwaram, Richmond Town, Vasanthnagar, Jayanagar, Vijayanagar, V.V. Puram, Rajajinagar, R.T Nagar, etc., — wherein purely residential use was permitted as per the CDP, no further permission shall be granted for redevelopment or reconstruction, except for residential use,” the Bench said.

“This order shall not be construed in any manner as conveying the approval of the court for other uses,” the Bench said, adding that it would pass orders on the next date of hearing (February 3) on permission already granted for non-residential uses in residential areas as per the RMP 2015.

The CAF, in its application before the court in July last year, pointed out that granting permission to use residential buildings for commercial purposes as per “mixed residential area classification” of the RMP 2015 must be stopped immediately because the State Government itself had “doubts on the credibility and implementation of the RMP 2015”.

The application said that the Government had appointed a committee headed by the former Chief Secretary A. Ravindra in December 2009 to scrutinise the negative aspects of zoning regulations with specific reference to the impact of the RMP 2015 on residential areas.

Modifications

Pointing out that the Ravindra Committee, in its recommendations, had discussed modification of the RMP, the CAF had claimed that zonal regulation, if not stayed, would have an adverse impact on residential areas since the authorities were permitting commercial activities as per the RMP, which came into force in mid-2007.

The Bench took note of an observation in the Ravindra Committee report, which states, “Change of land use has been curtailed for small properties on small roads. The notion of ancillary use of a property has also been done away with. These two provisions have caused much pain to communities by mixing commercial development in what should be residential areas only.”

Bangalore Q4 2011 Office Space Report

RESILIENT DEMAND

Bangalore’s commercial market exhibited resilience with comparatively high demand levels despite the discomfort in the market on account of global uncertainties. Demand for commercial office space reached approximately 3.55 million square feet (sf) during the fourth quarter of 2011 taking the year’s total to approximately 14.78 msf. Quite a few significant big ticket deals were observed to have been closed during the quarter. However, demand for space in the range of 3,000 sf to 20,000 sf was dominant and comprising almost 60% of the number of deals closed during the quarter.The developers/landlords refrained from escalating the rentals in spite of the decreasing vacancy levels across the city in order to retain and capitalize on the enquiries. This further accentuated the pace of deal closures thereby ensuring better absorptions. A marginal escalation in the rentals in the Outer Ring Road (ORR) micro market was observed in view of the low space availabilities corresponding to the strong demand.

SUPPLY SYNCHRONIZING VACANCIES

The supply infusion which remained subdued during the first half of 2011; recuperated during the last two quarters, with supply recording its highest at approximately 2.33 msf during the fourth quarter. The overall supply in 2011 totalled approximately 4.18 msf. The subdued amount during the first two quarters of 2011 coupled with high absorption levels substantially domesticated the vacancy levels in the city (bringing it down from 16.6% in the fourth quarter of 2010 to 12.0% by the fourth quarter of 2011).In spite of the infusion of supply in the SEZ segment during the quarter, the overall vacancy in SEZ developments remained considerably low at about 2.3%. The ORR micro market was characterized by low space availabilities and as a consequence most of the transactions recorded were of comparatively smaller dimensions barring the take up in a pre-committed space. Suburban markets witnessed most of the transactions in the range of 10,000 sf to 40,000 sf. The Whitefield micro market thereby gained leading to increased take-ups and a subsequent reduction in the vacancy level.Moreover, in view of the availability of a larger space in the micro market, most of the large sized transactions were recorded in Whitefield.

OUTLOOK

During the first two quarters of 2012, on account of the spill over of deal closures from end of 2011, the absorption levels will remain on the higher side. Vacancy too is expected to come down marginally or remain stable. Marginal scarcity of space options will prevail in early 2012; however, the situation is likely to improve as approximately11 msf of new supply is expected to enter the market in 2012

Devanahalli sees spurt in property action

Devanahallis realty landscape is beginning to change.From a quiet,far-flung area,its turning into a hubof realestate activity thanks to the airport,the under-construction expressway and the proposed highspeed rail link to the airport.
The airport had generated excitement in the property market when it was opened in 2008.That excitement wore down during the slump.But its reviving again,particularly with the infrastructure commitments.
The focus is currently on villas,and developers launching villas and row houses in Devanahalli are pricing it between Rs 5,000 and 8,000 per sft.Prestige Estates & Projects is developing 225 villas on the foothills of Nandi Hills priced over Rs 5 crore each.Brigade Orchards,an integrated township across 120 acres,is selling villas at around Rs 2.90 crore each.Sobha Developers has launched a 10-acre plotted layout near the airport.
Hiranandani Upscale is selling apartments at Rs 3,000 per sft and Hoysala Corpus s 2-BHK apartment is priced at 2,800 per sft.
Devanahalli will witness growth similar to Gurgaon.The Hebbal-Devanahalli road has reduced the commute time drastically.Infrastructure developments will positively impact residential development, said Ravindra Pai,MD,Century Real Estate.
The government has planned a 6-lane carriageway that will form a ring between the Outer Ring Road and the Satellite Town ring road in Devanahalli.The closest node to this site will be at Kogilu junction on NH-7.This will improve connectivity between NH-7 and the non-CBD commercial areas like Whitefield and Hosur, said Avinash Rao,regional director-south at real estate consultancy Knight Frank India.
Unlike Hebbal,where commercial activity is beginning to catalyse residential development,Devanahalli still remains an investor-led market due to lack of social infrastructure.Devanahalli is now a market for second homes.I dont see it emerging as an end user market in the short term, said Karun Varma,MD for Bangalore and Kochi at real estate consultancy Jones Lang LaSalle India.
Real estate activity in Devanahalli will gather further momentum only when commercial activity in the area increases.
Currently its restricted to the airport and its associated activities.The workplace remains predominantly in the south and east of Bangalore.Workplaces make an area vibrant.Though Devanahalli is a good market to enter,one can expect good capital value appreciation in 5-7 years, said Irfan Razack,CMD of Prestige Group.
The water table beyond Yelahanka is a major concern,and it is not clear when the government would provide water to private layouts.

Sharp rise in property prices in Bangalore, Q4-11 report says

Country’s biggest real estate portal 99acrres.com have revealed that the property price trends for the Bangalore region have seen an escalation if we compare per square feet prices (PSF) of Q4-11 over Q1-11.Therefore, although the real estate market seems to have been under stormy conditions, yet Bangalore has seen some price movement.
Commenting on the same Vineet Singh, Business Head, 99acres.com said“Bangalore has seen the high number of new project launches as compared to other cities. Localities in Bangalore North, South South East have seen a large number of new project launches at various price points and prices being pushed higher over the last 6 – 8 months due to end user buying. The successful launch of the first reach of Namma metro has enabled a higher price push in Indiranagar and has created increased demand in localities around Kanakapura Road Jalahalli which will soon be connected in the next reach. There is also the new lines of the 2nd phase announced recently for the metro, and the next 3 – 4 years will hopefully see a lot of the infrastructure and commuting ache in Bangalore being reduced and new investment localities have emerged across the city.”
A look at the property prices of areas in East Bangalore shows that all localities have seen price appreciation in Q4-11 when compared to Q1-11. Kaggadasapura and Banaswadi have seen 15% and 17% price appreciation in PSQF prices when we compare Q4-11 prices over Q1-11. The prevailing rates of these localities are at Rs 3000psf (per square feet) for Kaggadasapura and Rs 3400psf for Banaswadi. Indiranagar saw highest action with prices moving up by 21% in Q4-11 over Q1-11.
Barring localities of Hennur Road and Yelahanka which witnessed 5% and 2% dips in property prices, all the other localities in North Bangalore saw price appreciation. Thanisandra and Jalahalli witnessed maximum movement with prices moving up by 28% respectively in Q4-11 over Q1-11.
Prices remained flat in South Bangalore localities of Bannerghatta Road, Electronic City and JP Nagar. Jayanagar, Kanakpura Road and Hosur Road on the other hand witnessed prices rise within the range of 15% and 19% in Q4-11 when compared to Q1-11. BTM layout saw maximum price dip with PSQF prices dipping from Rs. 4072 in Q1-11 to Rs 3728 in Q4-11

Think Yeshwanthpur, dream connectivity

With another rail route soon to pass by the neighbourhood, Yeshwanthpur is a suburb that is far yet near

Excellent public transport and the happy pandemonium of the wholesale markets make Yeshwanthpur an integral part of the city despite its distance

One of the most striking features about Yeshwanthpur is its excellent connectivity through public transport.

The area is well-linked by bus and the Yeshwanthpur Railway Station is one of the major hubs of rail traffic in Bangalore. Howrah-Yeshwanthpur, Kannur-Yeshwanthpur, Ahmedabad-Yeshwanthpur — these rail routes are some of the first results that spring up when you do an online search of this suburb in the north-west of Bangalore.

Yearning for metro

Since the past couple of months, one section of the city has been fortunate enough to enjoy that popular public transport, the Namma Metro. Residents of Yeshwanthpur are biding their time for the completion of the ongoing metro project passing Yeshwanthpur. They tolerate the dust and traffic congestion caused by the metro construction in the hope that one day the pink and silver train will pull into the Yeshwanthpur Metro Station.

The soaring prices of residential properties stand testimony to the tremendous growth Yeshwanthpur has witnessed over the last few years. What was once considered an unlikely choice of residence for the young migrant population, mostly comprising working professionals, now has residential apartments coming up with them as the target market.

The industrial hub which was once considered a distant suburb is now home to many big real estate and infrastructure projects.

Evolution

Madhusudan R. who has been living in Yeshwanthpur for close to 35 years has witnessed the evolution of the locality over the decades.

“During my childhood, Yeshwanthpur had just two good restaurants — Hotel Gayathri and Hotel Rajani.

Occasional trips to these places were the highlights back then,” he says. Today, Gayathri and Rajani have paved the way for star hotels like Taj Vivanta that have opened in Yeshwanthpur.

Far and near

Yeshwanpur continues to be more famous for industries and commercial establishments than for its educational institutions and other facilities. Its old market and the new wholesale gaint METRO Cash & Carry co-exist in harmony. The vibrant vegetable market that is decades-old has its own share of regular customers who come from far and near.

The APMC Yard is a major hub for farmers from Nelamangala and nearby areas. Wholesale traders make a beeline to the yard to garner the best produce. The yard is easily the biggest procurement centre for vegetables in the city.

The Gen-Y

What troubles the younger generation living in Yeshwanthpur is the lack of good malls and hangouts in the area.

Bincy Francis, a 22-year-old resident of the area says, “There are no hangouts for youngsters here. I have to go all the way to Malleswaram to buy even a birthday cake.” However all that set to change in 2012 as three malls Under Construction are set to open doors (Brigade Group's Orion Mall ,Vaishnavi's Saffire and Golden Gate's Golden Square Mall).

With few options available to them, they prefer to visit Commercial Street or the relatively closer Malleswaram for some fun.