CPP Investments to invest Rs 1,500 crore in its JV with RMZ Corp to build office spaces – ET RealEstate

NEW DELHI: Realty firm RMZ Corp has tied up with Canada Pension Plan Investment Board to develop office complexes in Chennai and Hyderabad and the latter will invest Rs 1,500 crore (USD 210 million) in the joint venture.

Bengaluru-based RMZ Corp, which is one of the leading commercial real estate player, said it has entered into a joint venture with Canada Pension Plan Investment Board (CPP Investments) to develop and hold commercial office space in Chennai and Hyderabad.

“CPP Investments will invest Rs 1500 crore (USD 210 million), which will allow for the expected development of 10.4 million square feet of high-quality commercial office sites,” RMZ said.

Both the partners will have an equal stake in the JV firm.

The value of the partnership assets, once developed, is estimated to be over USD 1.5 billion, said Manoj Menda, Corporate Chairman, RMZ Corp.

“The partnership with CPP Investments, a globally respected institutional investor, will only strengthen our vision of achieving our hyper-growth strategy target of RMZ 2.0,” Menda said.

RMZ is amongst the only zero-debt real estate companies globally, said Arshdeep Sethi, Managing Director, RMZ Corp.

“With equity deals for assets over the last few months, we have ample headroom to achieve our next phase of growth,” he said.

The three sites that form this transaction – RMZ Nexity (Hyderabad), RMZ Spire (Hyderabad) and RMZ One Paramount (Chennai) – are Grade-A developments.

Of the 10.4 million square feet included in the transaction, 7.5 million square feet is under active development and construction of the remaining space will commence in the coming months.

“As India continues to be a strong source of global talent, demand for collaborative and engaging work space is expected to grow,” said Hari Krishna, Managing Director, Real Estate – India, CPP Investments.

The joint venture is well placed to meet the growing demand for high-quality sustainable office assets in Chennai and Hyderabad, he said.

In December last year, RMZ Corp completed the sale of its large commercial portfolio to Brookfield for USD 2 billion in India’s largest real estate deal.

The company utilised half of the proceeds to retire debt and the balance amount is meant for future growth.

RMZ group sold 12.8 million sq ft of 67 million sq ft (about 18 per cent) of their real estate assets to a fund managed by Brookfield Asset Management.



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Residential sales recover over 90% to pre-covid levels in Q1 2021: Report – ET RealEstate

NEW DELHI: Residential sales in Jan-March 2021 recovered to more than 90% of the volumes witnessed in Q1 2020 across the top seven cities, according to a recent report by JLL. The cities including Chennai, Hyderabad, Kolkata, and Pune surpassed the sales volumes of Q1 2020.

Mumbai has consistently been the largest contributor to sales in the last four quarters. In Q1 2021, Mumbai accounted for 23% of the sales, followed by Delhi NCR with a share of 21%, according to the report.

Kolkata saw the maximum increase in sales activity in Q1 2021 in comparison to the fourth quarter of 2020. In Kolkata, the offtake of residential units in Q1 2021 was driven by South Suburbs (Joka, Kasba, Behala, Jadavpur, Tollygunje) and East Suburbs (EM Bypass, Rajarhat, Topsia) with a combined contribution of more than 70%.

“There is a time extension to claim the tax holiday on profits from affordable housing projects until March 2022. The housing loan going below 7% for the first time in the last decade also triggered sales in all segments in the residential real estate. The buoyancy in the market manifested in the form of low mortgage rates and stable prices are expected to continue and attract fence-sitters and serious end users,” said Siva Krishnan, managing director, Residential Services (India), JLL.

New launches

The first quarter of 2021 witnessed new launches of 33,953 residential units, a jump of 27% over the last quarter of 2020. Hyderabad continued to dominate new launches and accounted for more than a fourth of the overall launches during the quarter. Bengaluru, which formed more than 16% of the new launches followed.

The markets of Delhi NCR and Chennai witnessed a substantial increase in launch activity during the quarter. New launches are still at 84% when compared to the pre-Covid levels of Q1 2020. Developers across the markets under review remain focused on the completion of under construction projects and clearing their existing inventory.

Development focus on mid and affordable segments continues in Q1 2021 with 69% of the new launches in the sub Rs 10 million categories. In the coming quarters, the focus on these price segments is expected to continue with developers trying to reap the benefits of strong pent up demand in these segments.

Most of the new launches in the markets of Bengaluru, Hyderabad, and Pune were in the sub Rs 10 million category Bengaluru-77%, Hyderabad-76%, Pune-100%, according to the report.

Unsold inventory

As new launches outpaced sales, unsold inventory at various stages of construction across the seven markets under review increased marginally from 462,380 units to 470,750 units.

Mumbai, Delhi NCR, and Bengaluru together account for 70% of the unsold stock. An assessment of years to sell (YTS) reveals that the expected time to liquidate this stock has increased from 4.2 years in Q4 2020 to 4.6 years in Q1 2021.

As developers continue to focus on recovering the volumes lost amidst the pandemic and gaining a foothold in their respective markets, prices are expected to be largely range-bound across most of the markets in the short-term, the report said.



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Gesture & NDR Group to develop three lakh sq ft co-living space in Bengaluru – ET RealEstate

Coliving-operator Gesture has entered into an agreement with Chennai-based NDR Group to convert a warehouse to a coliving space spread over 3 lakh sq ft in Whitefield, Bangalore.

“It’s a fixed rental model arrangement with NDR, Gesture will build and operate the facility for them,” said Sriram Chitturi, Founder, Gesture.

Gesture is also ramping up presence in the segment and plans to roll out 20,000 beds over the next decade in rented living space. The firm that currently has 3150 beds operational and is in talks with investors and landlords to build more such properties. “”The pandemic has impacted the demand for coliving space but it is expected to pick up in future as people look for working closer to the office,” said Chitturi.

The emergence of co-living and rental accommodation start-up has redefined the concept of urbanization in India. As Work From Home(WFH) culture takes precedence, co-living start-ups are also gearing up with designs that cater to the new normal. This ensures business continuity for companies while employees are encouraged to work from the comforts of their living instead of having to move to their hometown.

Many organizations are collaborating with startup co-living companies to provide fine rental accommodation for their employees so that they don’t have to worry about going back to their hometowns. “We expect demand to pick up post June as companies ramp up presence in the offices,” he said.

Co-living is a modern concept popular in metropolitan cities where like-minded people live in the same house with common kitchen, lounge, work area, etc. with shared and private rooms.

The Indian co-living market is at a nascent stage and has only a few organised players like Zolo, Nestaway, and Olive.

However, the trend is catching up in the major cities as the housing market begins to lean away from the proprietorship and towards a service model. Rents for a shared living accommodation range from Rs 6,000 to Rs 20,000 a month, while for individual living it can range between Rs 18,000 to Rs 25,000.

As per the reports by Federation of Indian Chambers of Commerce & Industry ( FICCI ) co-living and rental space in India is set to grow into a1 trillion market opportunity by 2023.The expected Compound Annual Growth Rate of co-living market in the country is 17% in the next five years.

The report indicates that the supply of beds by organised co-living players is expected to increase to about 541,000 across the top seven cities by 2023, with Delhi and Bengaluru accounting for more than 50% of this cumulative capacity.



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Embassy, Ivanhoe Cambridge to setup $500 million real estate platform – ET RealEstate

NEW DELHI: Realty firm Embassy Group on Tuesday announced partnership with Canadian fund Ivanhoe Cambridge to set up a USD 500 million investment platform to develop commercial properties, primarily premium office space. Ivanhoe Cambridge is a subsidiary of the Caisse de depot et placement du Quebec, one of Canada’s leading institutional fund managers.

As per the agreement, Ivanhoe Cambridge will infuse USD 400 million and Embassy group USD 100 million in the platform.

The Embassy Group said in a statement that it has partnered with Ivanhoe Cambridge to “launch an investment platform focused on office business parks in campus based and mixed use environments in India”.

The Bengaluru-based Embassy Group will be responsible for all real estate development, project management, leasing and operations.

Ivanhoe Cambridge will leverage their expertise in investment.

“The platform will have an investment capacity of USD 500 million with Ivanhoe Cambridge and Embassy investing in an 80:20 ratio, with an initial focus on the Southern Indian markets of Bengaluru and Chennai,” the statement said.

The platform will invest in develop-to-core and acquisition of partially developed business park opportunities.

Both the partners seek to cater to the preferences of the millennial workforce in providing flexible workplaces and building sustainable communities across key Indian urban centres.

The concept aims at meeting the demand in the expansion of Global Capability Centres and Research and Development Campuses.

The seed asset for the platform will be the first phase of the 60-acre Embassy East Business Park located in Whitefield Main Road in Bengaluru.

The first phase will be developed on a land parcel of 9 acres, with a gross leasable area of 1.3 million sq ft.

The upcoming business park also offers co-living and retail space.

The first phase of the project is expected to be ready for occupancy by early 2024.

“This new venture with Embassy will allow us to reinforce our presence in India, a key country in our diversification strategy in Asia,” said Karim Habra, Head of Europe & Asia-pacific at Ivanhoe Cambridge.

Over the last couple of decades, he said several global corporations have acknowledged India as a scalable global innovation hub catalysed by a deep, world-class talent pool.

“We anticipate this trend to accelerate thus supporting long-term demand for sustainable, class A offices in mixed use campus environments,” he added.

Chanakya Chakravarti, Managing Director, India, at Ivanhoe Cambridge, said “We look forward to collaborating with Embassy, an experienced developer with a formidable execution track record across market cycles, in expanding our portfolio.”

Ivanhoe Cambridge develops and invests in high-quality real estate properties, projects and companies. It invests internationally alongside strategic partners and major real estate funds that are leaders in their markets.

Founded in 1993, the Embassy Group is one India’s largest real estate conglomerates with a broad portfolio of over 62 million sq ft of prime commercial, residential and industrial space in India.

It has partnered with global investors including Blackstone and Warburg Pincus at the group and project levels.

Embassy was a sponsor of India’s first REIT, the largest office REIT in the Asia Pacific.



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