Schneider Electric takes 5 lakh sq feet property on lease

In among the largest lease deal transactions in India in terms of space in the last two months, Schneider Electric, a global specialist in energy management, has taken 5 lakh square feet of office space on lease in Bearys Global Research Triangle (BGRT) in Whitefield, an upcoming commercial district in Bangalore, according to industry sources.

The lease rentals for the transaction could be anywhere between R30 and R33 per square feet per month in the building, making the deal around R20 crore annually on the higher side, said sources.

“The rentals in the vicinity are in the range of R29 per square feet per month, but BGRT being a Leadership in Energy and Environmental Design (LEED) certified building, could be in a position to command a couple of rupees extra,” said a consultant with knowledge of the transaction.

Schneider refused to divulge details of the transaction. A company spokesperson told FE, “We will not be able to validate or answer your questions at this point in time. Schneider Electric is and remains committed as always to its India operations”.

Built on a 21 acre triangular property, BGRT is a research and development complex being modeled on the Research Triangle Park (RTP), North Carolina, US, according to the project’s website.

It is said to be the first Platinum LEED certified green building research park.

In the first phase, the complex will have a built up area of 1.25 million square feet, and the second and third phase will be 2.71 million square feet. It will house two basements, ground floor and 10 floors.

The under construction office project, sources said, is six to nine months away from completion.

In the commercial and office space offtake, Bangalore has been overshadowing other cities of the country, say market experts.

From IT/ITeS to pharmaceuticals, companies are making a beeline to take up commercial space in Bangalore.

According to market estimates, Bangalore has been contributing a lion’s share to the office space offtake in the country, which has been as high as 50-60% in the last two months

Private equity play hots up Bangalore realty market

A resilient property market backed by perceptions of high quality standards and professionalism has seen private equity investments of at least Rs 400 crore flow into Bangalore-based developers in the last two months.

Global investment firm Xander has bought a49% stake for Rs 150 crore in the retail component of Mantri Developers integrated township,Mantri Serenity,located on Kanakapura Main Road.Sushil Mantri,CMD,Mantri Developers,confirmed the deal .Prior to this,Mantri Developers raised Rs 100 crore from ASK Property Investment Advisors,the real-estate private equity arm of ASK,for its luxury residential project in the heart of the city,near Lalbagh.

On Tuesday,ASK announced another Rs 100 crore fund infusion for a 50% stake in a residential project comprising of villas and apartments being developed by Shriram Properties,located off Sarjapur Road,near the Wipro Campus.Commenting on the companys recent funding activities,Sunil Rohokale,CEO of ASK Investment Holdings,said: Our second round of investments in Bangalore shows our confidence in the outlook for the citys real estate market.The market is stable due to constant job creation. 

Samir Jasuja,CEO of real estate analytics firm PropEquity,said Bangalores absorption rate had been fantastic and the market was doing way better than its peer cities in west and north of the country.Jasuja said the PE interest was also because,south-based developers have proven to be much more professional than developers in the west and north.Also,their project execution and quality is far better than what one sees in the rest of the country.

Anuj Nangpal,director of investment advisory in real estate consultancy DTZ India noted,Mumbais real estate market is whopped,Delhi is too investor led and there is a lot of underwriting in sales,Chennai has seen a slowdown,but Bangalore continues to remain strong and steady.

The PE party may continue in the coming months.Project level funding to the tune of Rs 300 crore is on the cards,with deal closures expected to happen as early as end of September.

Century Real Estate led by P Ravindra Pai,one of the largest owners of real estate (about 3,000 acres) in Bangalore,recently raised Rs 40 crore for its project Century Indus,located in Rajarajeshwari,from Anil Ambanis Reliance Capital.Century is in the process of raising an additional Rs 150 crore to be channeled into two SPVs (special purpose vehicles ),and it is said that Reliance Capital may again participate.

Another Bangalore-based premium developer,Jain Heights,is in talks with three fund houses,including Reliance Capital,to raise around Rs 100 crore at the SPV level for multiple projects.The funding is being planned in two tranches a first round of Rs 60 crore and then Rs 40 crore.The first round of funding will see closure by September end,company sources said.From the consumer standpoint,it is very good news when a PE fund comes on board a project,as it guarantees financial stability,and ensures that the project goes on to completion.


FUND FLOW

Xander invests Rs 150 crore for 49% stake in Mantri Serenity retail ASK invests Rs 100 crore in Mantris luxury residential project near Lalbagh and another Rs 100 crore in Shrirams residential project off Sarjapur Road Reliance Capital invests Rs 40 crore in Century Indus Century is raising an additional Rs 150 cr from Reliance Capital for 2 residential projects Jain Heights is raising Rs 100 crore in two tranches,in which Reliance Capital is the front-runner

Its official: City to host AeroIndia 2013

Sources say the ministry of defence has directed the IAF to make arrangements for staging the country's premier aeronautical show at Yelahanka as usual

Ending the confusion over the venue of Aero-India 2013,the Ministry of Defence (MoD) has decided to continue organizing the country's premier aeronautical show in Bangalore.Marking the beginning of preparations for the much-awaited global event,the MoD,according to sources,has directed the Indian Air Force (IAF) to make arrangements at its Yelahanka Air Force Station to host the show.
The 2013 edition of AeroIndia,scheduled to be held between February 6 and 10,was mired in controversy following rumours of the Union governments decision to shift the event out of Bangalore.Even though there was no consensus over the alternative venue,the buzz in the aviation industry was that the country's IT hub was all set to miss the global event.

But,unwilling to let go of the event,the then chief minister of Karnataka D V Sadananda Gowda had met defence minister A K Antony and requested him not to shift the venue.

However,the IAF is said to have begun preparations for the much-awaited air show.IAF head quarters has written to various squadrons base dat Yelahanka.Speaking to media,a commanding officer of one of the squadrons,said,We have got an official communication from HQ about the show.Major obstacles like disturbance of civilian air traffic,airspace management and other aspects have been resolved by the MoD.We have been asked to make due arrangements to accommodate the aircraft that will land in Yelahanka. 

Asked whether the show would affect their operational exercises,one of the pilots explained,Even though the event does come on the way of our exercises,we will stream line our schedule for a few days.If in inevitable,we will carry out important exercises from other nearby bases. According to sources in the MoD,the registration process for AeroIndia 2013 has begun.Ever since the nation begantohosttheairshowin1994,the premier defence show has made Bangalore a major destination for aerospace companies to showcase their technology,inventions and R&D activities.

The Yelahanka Air Force Station will be hosting the show between February 6 and 10,2013

B’lore to boast of biggest aerospace park

Bangalore that is already on the international air map, connecting most of the cities in the world, will be home to a biggest aerospace park in the world.

Principal secretary to the department of industries and commerce M N Vidyashankar told media, foundation will be laid for the park, intended to be developed at a cost of nine billion US dollars on 1,000 acres of land near Bengaluru International Airport (BIA) in the month of December.

The park will boast of Airbus, Boeing, Bombardia to name a few among the international aeroplane manufacturers, all coming under one roof.

As a prelude to this, 40 biggest aerospace companies are taking part in a meet in Bangalore on Monday (September 10).

“Name a company, you can find them in the conclave,” the officer said in a confident tone.

Investments

Reiterating that reiteration didn’t have a least impact on the industrial growth in the State, the officer substantiated his claim with the recent expressions of interest. Recently, Rs 48,000 crore worth projects were inked (apart from those signed in GIM 2012).

Most of the investments are in the area of solar energy and wind energy, besides IT and BT too with north Karnataka getting major share of it. The investors are preferring Gadag, Bijapur, Raichur and other districts in north Karnataka for the availability of water in abundance.

In addition to this, Taiwan is coming to India, particularly Bangalore in a bigger way. Taiwan is a country known for its hardware expertise and with that country evincing interest in Bangalore, it will be a wedding between software (of which India is the master) and hardware.

The minister for external affairs, Taiwan is scheduled to lead a delegation of 400 industrialists to Bangalore on September 26, the officer added.

Karnataka clears 23 projects worth Rs 16,077 cr

Kirloskar Toyoda Textile Machinery (KTTM) has received clearance from the Karnataka Government to set up a Rs 3,847 crore factory in Kittur in Belgaum district.

The company will set up an engine and a textile machinery unit which will generate over 1,200 jobs there. KTTM was among the 23 projects cleared by the state high-level clearance committee (SHLCC) on Friday. The total investment involved is over Rs 16,000 crore and it will create nearly 4 lakh jobs.

Clearance was also given to Reliance Cement Company for setting up a Rs 690 crore cement grinding unit in Gowribidanur taluk.

Wadhwan Mega Infrastructure’s proposal to set up agro industrial clusters and agri Infrastructure project in many districts of the state with a total investment of Rs 10,000 crore was also cleared.

The other projects which were cleared were:

Zonasha Estates & Projects’ proposal to establish software development centre at Devanahalli near Bangalore involving an investment of Rs 242.56 crore. It will generate over 17,000 jobs.

Enrich Private Limited’s proposal to establish EPC solar PV project in Aliyabad, Bijapur District, with an investment of Rs 980 crore.

Gopalan Institute of Medical Sciences and Research to set up a medical college and a hospital in Attibele near Bangalore involving an investment of Rs 248.10 crore.

Showa India’s project to set up a unit to make shock absorbers for vehicles with an investment of Rs 342 crore. It will lead to jobs for nearly 1,000 people.

TB Kawashima Automotive Textile’s proposal to set up a unit to manufacture high quality woven and tricot / circular knitted textile fabrics for car seat including weaving, knitting, dyeing, coating and finishing process. The company will invest Rs 100 crore in the project which will be set up in Kadakola Industrial Area, Mysore District.

JSS Mahavidya Peetha’s proposal to set up three education institutions in Kadakola Industrial Area, Mysore District with a total investment of Rs 647 crore. It will create jobs for 14,500 people.

Karnataka to set up aerospace park with $10 bn investment, M N Vidyashankar

Bengaluru will be the India's first and biggest aerospace industry hub in next five years. Karnataka government will set up an aerospace park with an investment of $ 10 billion near the Bangalore International Airport, announced M N Vidyashankar, IAS, the Karnataka state's Principal Secretary for Industries and Commerce while inaugurating the two-day BICSI India Annual Conference in Bengaluru on August 23rd, 2012.

He said the state will announce Aerospace Policy, the first such policy from any state in India within a fortnight. "Karnataka will have the World's biggest knowledge hub in Chitraduga - 2,000 acres of land is being provided to IISc, 1,500 acres to ISRO, 2,000 acres to DRDO, and 50 acres to National Aeronautics in Chitradurga. It will also have a manufactruing zone," said M N Vidyashankar.

To leverage the technology value chain, India must focus on Intellectual Property, R&D, manufacturing and applications. He said the contribution of GDP from manufacuturing should increase to 25% from 10%. India has to create ecosystem within the country for value generation and extraction. He opined that three pillars namely technology, government and academia should collaborate and this would create huge opportunities.

Dr Alok Bharadwaj, President, MAIT said at the current rate of technology growth, India will have to be a $ 400 billion net consumer of IT hardware and technology by 2020 as compared to $ 50 billion today. This also implies that there is $ 400 billion opportunitites. The challenge is to convert this into a value chain. To leverage the technology value chain, India must focus on Intellectual Property, R&D, manufacturing and applications.

He also pointed out, the contribution of GDP from manufacuturing should increase to 25% from 10%. India has to create ecosystem within the country for value generation and extraction. He opined that three pillars namely technology, government and academia should collaborate and this would create huge opportunities.

“IEEE is weighing the next data transmission speed options of 400 Gigabit per second and Terabit per second. And most interestingly, the Terabit Ethernet technology is based on a proposal from two companies -- Google and Facebook --who think it is very necessary. However the next speed hike will make sense only if the cost per gigabit come down”, said BICSI India District Chairman Dileep Kumar in his opening remarks.

In the inaugural address, Pravin Prashant, Editor, Voice & Data magazine mentioned that IT has grown by 18%, exports have increased by 22-29% but the domestic IT industry has slipped down. He pointed out that the government should support the industry in uncertain business environment.

Mahindra unveils new Reva plant

Mahindra Reva Electric Vehicles,part of the $15.4 billion Mahindra Group,inaugurated a new manufacturing facility in Bommasandra on the outskirts of Bangalore on Wednesday.In May 2010,Mahindra had acquired a majority stake in Reva Electric Car Company,subsequent to which the company was renamed Mahindra Reva ElectricVehicles.
The new manufacturing facility has an installed capacity to produce 30,000 vehicles annually,and is expected to reach full production capacity over the next three years.The company said the facility,which is scheduled to begin production in September,will produce around 6,000 vehicles to begin with.
Till date the Reva brand has sold 4,500 cars.The new facility will see the production of Mahindra Revas new two door electric car that it had showcased in the beginning of the year at the auto expo in Delhi.The new car is yet to get a name and a price tag.The current Reva vehicles retail between Rs 4.2 lakh and Rs 5.2 lakh (on road prices Bangalore ).The combined investment into the plant and the new product range is over Rs 100crore,the company said.
This plant was conceived even before we came on board, Anand Mahindra,CMD of Mahindra Group,said.Mahindra has turned this plant into a reality,from our expertise of putting up plants in record time and making them cost-effective.This is the greenest plant in the Mahindra group, he said.The new manufacturing facility has been awarded the platinum rating from the Indian Green Building Council,becoming the first automobile manufacturing facility in India to receive this certification.
Electric vehicles like Reva are high priced because of battery and other equipments that are imported from around the world.But Mahindra said,Those costs are now being driven down.In the mean time we will focus on the cost per kilometre. The company says that its electric vehicle technology gives buyers a cost per kilometre of 50 paise to 60 paise,which is 10 times lower than conventional gasoline vehicles.
Mahindra said that the government must put in place a road map for electric vehicles and should emulate the policies seen in countries such as Norway.In the last quarter,2.6% of cars sold in Norway were electric vehicles,a sector which 18 months ago had a 0.01% share of the country's automobile market.In 1999,China had 40,000 electric two wheelers;today that number has crossed 100 million.
Mahindra said he was also keen to approach enlightened state governments that have strong leaderships,who understand the perils of urbanization and the need to cope with them quickly.We should treat them as different countries.We should approach these leaders and ask them to put in place a comprehensive policy that would ensure that a particular percentage of vehicles would use alternate fuels by a certain time.
Delhi gives a 15% subsidy for electric vehicles as well as reductions on VAT and road tax.Chhattisgarh and Gujarat have also reduced taxes on electric vehicles,while Karnataka gives a 5% reduction on VAT andhas a lower road tax.

An inside view of the new Reva factory in Bangalore