Brigade,GIC to develop HUL property in Whitefield

Brigade Group and Government of Singapore Investment Corporation (GIC),through its affiliate Reco Begonia,have entered into a 51:49 joint venture through a special purpose vehicle (SPV) for the development of a residential project on Whitefield Main Road.The project would see an investment of Rs 100 crore.
The 9.5-acre property was acquired from Hindustan Unilever for Rs 130 crore through a bidding process.The project will be targeted at the high-income group.M R Jaishankar,CMD of Brigade Group,said the project was expected to generate revenues of Rs 700 crore over the next three to four years.
As part of its strategy to unlock business value from real estate assets,Hindustan Unilever had put its prime land parcel in Whitefield on the block.Global real estate consultancy firm Cushman & Wakefield had won the mandate to conduct the bid,which saw more than 40 companies evince interest in the property.Cushman & Wakefield declined to comment on the bidding details.

World's third-biggest data centre in Bangalore

It's a fortress. The whisper in the company is that the security personnel are paid more than most employees. They certainly look like they are well looked after . Some are even armed. If you are a visitor , you will only be allowed to enter the gate if you are expected.

You have to be escorted by a security official till the point where a company executive takes over. X-ray scanners scan you as you enter. There are access-controlled turnstiles. Elevator cards take you only to the floor you are supposed to go.

It's Lt Col Hardeep Singh Bedi's newest and perhaps his boldest venture—an absolutely world-class data centre. It's in Bangalore and it's the third-biggest in the world, with a floor space of 9 lakh sq ft. That's roughly equal to 10 international match sized football fields.

The biggest in the world is the Lakeside Technology Centre in Chicago (1.1 million sq ft, or 11 million sq ft) and the next biggest is the QTS Metro Data Centre in Atlanta (9.7 lakh sq ft).

A data centre holds the servers, storage and networking gear that companies use to store, process and transmit the enormous amounts of data that they deal with today. Many companies have their own internal data centres but, increasingly , they are handing over the data centre responsibilities to third parties. And that's where Bedi's Tulip Telecom saw an opportunity.

Since the data is priceless to companies, Bedi could not afford to make any compromises on security, which explains the amount he has spent on securing the facility . "Even if there is a bomb blast immediately outside our building, the data centre facilities will not be affected because there's a second wall that separates the main building wall from the data centre," Bedi, who turns 60 this year, says.

Security has been integral to Bedi right through his life. Early on, he decided to follow his family's three-generation old tradition of serving the Indian Army. He graduated from the National Defence Academy to join the Army in 1972. He was initially in the armoured corps.

"But the Army lets you do other things, so I did some computer courses in the early 1980s in the Army's Faculty of Computer Technology in Mhow. I was then posted as an instructor in the faculty for four years, after which I was posted to Delhi to plan the automation of the Army." He was awarded the Vishisht Seva Medal for his role in the computerization of the Indian Army.

In 1994, he took premature retirement from the Army and started a company called Tulip Software. "I had no idea about business. I started by selling software products. Then we got into hardware, then networking."

An inflection point came in 2004, when Bedi won a project to connect the complete district of Malappuram in Kerala. With that success, he tried to see if he could provide data connectivity to corporates and customers in general. That too succeeded. Today, he has 2,000 cities covered on wireless and 300 cities on fibre (wires).

"I quickly became the biggest player in wireless, and today, even on fibre, I'm bigger than Tata, Bharti and Reliance," says Hardeep Singh Bedi.

Many of the telecom service providers lease lines from Tulip, which had revenues of Rs 2,600 crore in the last fiscal year.

The Bangalore data centre, which was launched in February and on which he has already spent Rs 415 crore, is Bedi's latest bet. A data centre cannot have the slightest bit of downtime. So everything in the data centre, including the power sources, is duplicated or triplicated .

He used IBM as a consultant for the project. A data centre is measured by its power efficiency, and Bedi says his centre is at least 30% more efficient than the global average.

"I chose Bangalore because it is in seismic zone 1 (least prone to earthquakes). It is well connected, midway between Mumbai and Chennai, which are the landing stations for international fibre. And it has a lot of IT and hardware skills, so I can get support quickly if something were to go wrong," says Bedi.
HP, IBM and NTT are already customers for the data centre.

Rajesh Janey, president of storage major EMC India, says Tulip has evolved very well as a company. "They started as a systems integrator, went on to become the largest provider of virtual private networks in India. The Bangalore data centre is now truly trend setting ," he says.

AppliedMicro Expands Global Design Operations in India

Applied Micro Circuits Corporation, or AppliedMicro™ (NASDAQ: AMCC), an industry leading provider of energy conscious silicon solutions for next generation data centers and internet infrastructure, announced the opening of its new Bangalore design center. The operation will drive advanced design and development of AppliedMicro's computing and connectivity solutions and provide significant value to its technology capabilities. This is the company's second design center in India after Pune.
AppliedMicro's newest design center will enable the company to meet the explosive demand for "Just-Right" compute and connectivity products for enterprise and cloud data centers through the development of new products. These new products will dramatically reduce energy and the total cost of ownership (TCO) of data center infrastructure by striking the optimal blend of performance, density and power consumption. AppliedMicro is the only company to offer a complete suite of compute and connectivity silicon specifically designed for next-generation data centers.
"With the launch of the X-Gene™ platform at the end of 2011, AppliedMicro demonstrated its innovative capabilities in the cloud computing space. We are building on this by assembling teams that can satisfy our complex and demanding engineering objectives and fuel our growth. Bangalore's world-class, highly proficient and mature talent pool complements this strategy very well, and together with our Pune center, will contribute to India being our fastest growing design location," said Dr. Paramesh Gopi, President and CEO of AppliedMicro.
"By having our new design operations in Bangalore, we will engage the industry's best talent and work closely with our partners and customers to shape next-generation solutions in data center computing and connectivity. The learning and ownership opportunities our company will offer to senior engineering talent here will be significant and unique, allowing them to be pioneers of energy conscious cloud computing silicon and software," said Anil Gupta, Managing Director, AppliedMicro India.
The Bangalore design center will reflect AppliedMicro's strong heritage in innovation and a clear commitment to energy efficiency. It will complement the company's strategy in the development of its flagship product, "X-Gene", the world's first 64-bit ARM® architecture compliant processor for next-generation cloud computing, wireless infrastructure, enterprise networking, storage and security applications. The center will also contribute significantly to the development of AppliedMicro's next generation Optical Transport Network (OTN) and physical layer (PHY) products.
Besides Bangalore and Pune in India, AppliedMicro has design centers in North America, Denmark, and Vietnam.

Intersil Expands Global Footprint With Bangalore Design Center

Intersil Corporation (NASDAQ: ISIL), a world leader in the design and manufacture of high-performance analog and mixed signal semiconductors, today announced it has opened a new design center in Bangalore, India. The center will help develop new integrated circuits and reference designs plus provide system-level application support for customers.
Intersil's new state-of-the-art design center is the result of consolidating two Indian design centers into a spacious, new 18,000 square foot facility that is optimized for developing high-performance analog and mixed signal ICs. Conveniently, the new site is closer to the local IT corridor and shortens the commute for most of Intersil's employees.
"Having a centralized design center in India will not only enhance collaboration amongst employees, but also boost overall productivity within the various teams," said Roger Levinson, Vice President & General Manager for Intersil's Signal Path Products group. "The Bangalore team will continue to provide key support for Intersil's business in the region's growing market."

Bangalore - India's leading realty market

Good range of properties, stable prices, makes the city perform better than peers

With a good range of properties, stable prices and a vibrant workforce, the city’s real estate sector has performed far better than peers like Mumbai and Delhi

Real estate markets around India have been getting a hammering since last year and home sales across the board have suffered.

In the last quarter of the financial year 2012, the Mumbai Metropolitan Region (MMR) saw a drop of 58 per cent in unit home sales, while the National Capital Region (NCR) experienced a similar 57 per cent plunge, compared to the same quarter a year ago, according to realty research firm PropEquity.
However, the one star performer amid this gloom was Bangalore, which saw a drop of just 18 per cent in the quarter, when the numbers were down significantly elsewhere. Moreover, the city has already beaten other property markets in home sales last calendar year, when it absorbed 49 million square feet (sq ft) of residential properties — more than any Indian city — according to Kotak Institutional Equities. Bangalore was followed by NCR, with 46.88 million sq ft of offtake, and MMR, with 35 million sq ft.

"Home sales have been much, much stronger in Bangalore than other cities," says Anuj Puri, chairman and country head, Jones Lang LaSalle, a global property consultant.

So, it's not surprising that Bangalore ranks tenth this year in the list of top global investment destinations, brought out by Urban Land Institute and PricewaterhouseCoopers. Meanwhile, Mumbai and New Delhi fell from third and fifth place in 2011 to 15th and 12th in 2012.

It's not just in the residential market that Bangalore is on top. The city has also experienced the highest absorption in office space among major cities. In the fourth quarter of financial year 2012, Bangalore sold 3.4 million sq ft of office space, which is 89 per cent higher than in the corresponding quarter of the previous year. By comparison, NCR's office absorption has come down from 1.3 million sq ft in Q4 of 2011 to 0.9 million sq ft in Q4 of 2012, according to data culled by Knight Frank, a global realty consultant. In Mumbai, it has risen from 0.9 million sq ft in Q4 of 2011 to just 1.3 million sq ft in Q4 of 2012.

Why is Bangalore performing better than other Indian markets?

A good range of products, seems to be one reason. "There are good products available at various price points," says S Bhaskaran, chief financial officer at Sobha Developers, one of the largest property developers based in Bangalore. "You can buy a house at any price between Rs 20 lakh and Rs 1 crore or more," he adds.

The absence of big price spikes seems to be another reason. "Prices increase in Bangalore by 10-15 per cent in a year, unlike Mumbai or NCR, where prices go up like crazy. Besides, execution of properties is also much better here," says Sameer Jasuja, chief executive of realty research firm PropEquity.

According to data culled by PropEquity, Bangalore has seen a rise of 18 per cent in home prices since the first quarter of 2009. In comparison, other markets such as Chennai, NCR and Mumbai have seen increase of 22 per cent, 48 per cent and 26 per cent, respectively.

Even the recent data released by National Housing Bank Residex, an index that signals property prices across key cities in India, indicate this. Bangalore saw a rise of 4.5 per cent in residential properties in January to March 2012, compared to the same period last year. Mumbai saw a nine per cent and Delhi a 33 per cent increase during the last quarter of financial year 2012.

Many argue that robust hiring by IT companies and stable tech incomes have also fuelled home sales in Bangalore.

"Many IT companies such as HP, IBM and Texas Instruments have large bases in Bangalore. Whenever they win global contracts, the local markets in which they are located benefit, as the firms shift work here," says Sanjay Dutt, executive managing director, South Asia, Cushman & Wakefield, an international property consultant.

Adds K Madhusudan, co-chief investment officer, Azure Capital, a Bangalore-based realty fund manager : "Both global IT majors such as IBM, Oracle and Cisco and domestic companies are hiring aggressively. That is driving the growth of residential and office markets in the city,"

For instance, TCS, the country's largest software exporter, has a hiring target of 50,000 for 2012-13. It has already made job offers to 37,800 students. Another IT major, Infosys, recently announced that it would hire 35,000 in 2012-13. It had made 26,000 campus offers the previous year.

Akshit Shah of SBICAP Securities, however, reminds people that the numbers are looking good, possibly because of low absorption in 2009-10, when both supply and demand were low in Bangalore.

How long will the garden city be able to sustain its good run?

"I believe Bangalore will be able to maintain a good sales momentum. I expect land costs to remain stable and we will be able to offer good products at reasonable rates," says Irfan Razack, chairman and managing director of Prestige Estates, a Bangalore-based developer that has done a sales of Rs 2,200 crore in 2011-12 and is expecting similar numbers in 2012-13.

Adds Jasuja of PropEquity: "I think the trend (Bangalore leading the markets) is likely to continue for the next three-six months. Beyond that, we have to see how the markets pan out."

If the economy improves, rates climb down and developers come out with aggressive prices, things could look up for Mumbai and NCR, adds Jasuja.

SBICAP’s Shah says, given the high inventories, absorption in Bangalore may not continue to keep pace with supply going ahead. He believes Mumbai will overtake Bangalore in absorption of properties in the coming quarters. "At 3.5 million sq ft to four million sq ft a month, the absorption is stable. I do not see further growth from here," he adds.

One big factor distorting the picture so far is that there have been no major approvals given out by Brihanmumbai Muncipal Corporation (BMC). That has changed now, with BMC’s green light to as many as 78 skyscrapers, positioning Mumbai for a construction boom.

If that happens, Bangalore's reign on top of the real estate charts may end.

NRN-backed start-up Hector Beverages to set up second manufacturing facility in Hosur

Hector Beverages, a two and a half year old start-up company, which operates in the functional beverages market with its brand Tzinga, is setting up its second manufacturing plant in Hosur, located between Karnataka and Tamil Nadu.
According to Neeraj Kakkar, CEO of Hector Beverages, "Our second plant will have a manufacturing capacity that is 300 times that of our existing plant in Manesar. The investment required will be around Rs 7 to Rs 8 crore, which we would raise as part of a third round of funding from our existing investors."

Hector Beverages was among few start-ups in the food and beverage space to receive early stage funding from N R Narayana Murthy-promoted Catamaran Ventures and Bangalore-based venture capital firm, Footprint Ventures, besides funding from four angel-investors.

In 2010, Hector Beverages raised Rs 6 crore as part of its first round of funding to set-up its manufacturing plant in Manesar. In 2011, the company raised Rs 8 crore in a second round of funding from its investors. "The third round of funding will happen before our new manufacturing facility becomes operational," added Kakkar. The Hosur plant is expected to be operational in March next year.

Kakkar refused to divulge any details on the company's current production numbers or revenues but said, "we our either in the number one or two position in volume terms in the markets that we operate in."
Tzinga, the company's energy drink operates in the functional drinks category, which comprises of sports drinks, energy drinks and enhanced water and juices, a sector that has been clocking growth rates of 40% to 50% in the last five years and has a market value of Rs 600 crore. However, the sector is still miniscule in comparison to the aerated beverages market in India, which has a market value of Rs 15,000 crore.

Tzinga is pitched up against bigwigs such as Red Bull, which is priced at Rs 85 for a 250 ml can. On the other hand Tzinga retails for Rs20 for a 200ml pack. The other major brands operating in the functional beverage segment include Gatorade, Burn (from Coca-Cola), SoBe, and Cloud 9.

"Our goal was to create an affordable product, which we have been able to achieve after 14 months of research, six months of which was done in Europe," said Neeraj.

Speculation fizzles out of Bangalore property mart

From speculative investor-led buying for a good part of the last decade, the city's real estate sector has come to be an end-user market. A reason why residential prices in Bangalore have not skyrocketed like in Mumbai and the National Capital Region (NCR) in recent years.

Chandrashekar Hariharan, CMD of property developer Biodiversity Conservation India, says the average per sqft price in Bangalore is roughly 60% of the going rates in Mumbai and NCR. While premium properties in Bangalore can be bought for Rs 4,000 to Rs 5,000 a sqft, a two bedroom apartment in certain Mumbai locations starts at Rs 12,000 per sqft.

Muninder Seeru, executive director in real estate company G:Corp points out that every city has a price threshold level and Bangalore cannot take it property prices beyond Rs 4,750 per sft. "Pricing beyond this may not be attractive." He says the city might have an oversupply of units but not an oversupply of 'quality residential units', as end users are lapping up quality inventory that comes in to the market.

Data available with developers shows that Bangalore is clocking a healthy monthly absorption of 3,000 units by end users, which has resulted in good loan off-take. "The housing finance companies are disbursing loans worth Rs 1,500 crore every month. Many of these are for homes with a ticket size of Rs 60 lakh," said Hariharan.

M Murali, MD of Shriram Properties, said the company has sold 1,650 apartments in Bangalore of which 99.5% of the buyers were end users. A reason why Bangalore is not seeing speculative price appreciation.

"By and large the investor community has vanished from Bangalore," said Balakrishna Hegde, MD of Chartered Housing. Bangalore, he said, has a population of 80 lakh and there are only 14 to 15 lakh dwelling units in the city. "Hence there is enough scope for more residential units," he said.

Ravindra Pai, MD of Century Real Estate, said the absorption rate was flat in the last quarter because of weak sentiments about the economy.

The developers were speaking at a discussion organized on Wednesday by magicbricks.com, one of India's leading property portals. The event, MB RE+ Dialogues, is a movement to empower the real state sector with knowledge about consumer behaviour as well as prevailing market trends. The event also saw the participation of Bangalore Development Authority (BDA) commissioner Pradeep Singh Kharola, who said that he would try to get all approvals for builders done in 30 to 60 days. Builders say it currently takes two to three years