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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TDR turns lifeline for major projects in Hyderabad – ET RealEstate

HYDERABAD: Despite the pandemic denting the coffers of the Greater Hyderabad Municipal Corporation (GHMC), transfer of development rights (TDR) turned out to be the biggest lifeline for the city ensuring execution of several infrastructure projects.

The civic body saved over Rs 1,500 crore towards cash compensation due to TDR and ensured projects — especially construction of link roads and flyovers — were executed on time, officials said.

Amid restrictions, owing to the spike in Covid-19 cases, the scheme turned into a win-win situation for property owners, builders, developers and government.

Though TDR concept was introduced a decade ago, till mid-2019, only 115 TDRs were issued. However, with introduction of new policy in 2017 and subsequent amendments, officials said that the property owners opting for TDRs increased along with increase in the city’s infrastructure works. Till date, 807 TDRs have been issued.

TDR is made available for certain additional built-up area in lieu of the area relinquished or surrendered by the land owner, so that he can use extra built-up area or transfer it to another for a sum.

“Apart from additional property value, the provision to sell or purchase TDR has also been an attractive factor. Under the scheme, the extra built-up area could either be utilised by the property owner or sold to others which is a reason builders and realtors come forward to opt for TDR,” said a GHMC official.

Though the TDR concept was introduced a decade ago, the government had issued a GO in 2017 and extended more benefits for property owners.

Speaking at a review meeting at the GHMC headquarters this week, municipal administration and urban development minister KT Rama Rao asked officials said that link road works and the Comprehensive Road Maintenance Programme were progressing on fast track.

He said, “A TDR worth Rs 2,800 crore was submitted for various land acquisitions. The officials are reviewing work under the SRDP as well. As many as 21 works taken up under SRDP have been made available for public while another 17 works would be completed soon.”



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Mumbai region, Pune lead housing activity, accounts for 53% sales in top eight cities in Q1 – ET RealEstate

Property markets of Mumbai Metropolitan Region (MMR) and Pune are driving the most housing sales among the country’s top seven cities as indicated by the rising contribution of these markets in total sales led by reduction in stamp duty, discounts and appropriate product strategies of developers.

MMR and Pune accounted for 53% of total sales in top seven Indian cities in the first quarter of 2021 as against 33% in 2013, showed data from Anarock Property Consultants. In a major trend reversal over the last eight years, the once-most active housing sales markets of Delhi-NCR have dropped sharply in their sales share.

Of a total of 58,300 homes sold across the top seven cities in the March quarter, MMR and Pune together accounted for an impressive 53% share, while NCR contributed just 15%. In 2013, of a total of 3.19 lakh units sold across the top 7 cities, the two cities in Maharashtra contributed 33% while NCR comprised the highest share of 37%.

“From 2013 to date, MMR and Pune have been consistently ramping up year-on-year sales share while Delhi-NCR saw a decelerating trend. The major factors aiding these western markets included active implementation of MahaRERA and timely government interventions to boost housing demand. Simultaneously, developers here put in determined efforts to bridge the demand-supply gap,” said Anuj Puri, Chairman – ANAROCK Property Consultants.

In MMR, according to him, developers have managed to bridge the gap by launching affordable homes in new areas like Dombivli and Boisar priced within Rs 45 lakh and most leading developers efficiently changed gears to tap the growing budget housing demand.

“The substantial increase in MMR’s housing sales in the first quarter of 2021 can be credited to measures like reduced stamp duty, an all-time low home loan interest rates at 7 percent, a significant correction in apartment prices, as well as a surge in household savings. These factors seem to have convinced homebuyers that now is the right time for them to invest in real estate. MMR has recorded a lot of pent-up demand in the last seven to eight years and all that demand is now getting converted into sales,” said Aditya Kedia, Managing Director, Transcon Developers.

During this period, there were no major variations in overall housing sales share of the primary southern markets Bengaluru, Hyderabad and Chennai whose contribution stayed relatively between 26% to 35%.

The Delhi-National Capital Region, on the other hand has continued to pay the price of inordinate project delays and unfavourable consumer sentiments, while the southern markets remained end-user driven and thus maintained an even keel, with developers focusing squarely on consumer demand.



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Varde Partners funds $155 million for two office developments in Hyderabad – ET RealEstate

Global alternative investment Varde Partners has provided senior construction financing on two pre-leased office assets of the Phoenix Group in the Gachibowli financial district of Hyderabad, India.

The $155 million or Rs 1,137 crore facility will be used to refinance and fund to completion over 2.5 million sq ft across the two grade A developments owned by the developer, Varde Partners said in a release.

ET broke the story regarding this transaction on March 22.

Out of the total development, over 1.5 million sq ft has been pre-leased to two multinational companies, reflecting the quality and location of the assets. Construction of both projects is well-advanced, with sub-structure development complete and super-structure phases underway.

Varde believes that India’s real estate market is experiencing a significant imbalance in the supply and demand of capital, leading to many businesses with robust balance sheets seeking alternative sources of capital.

“We see significant opportunity across the Indian office market for both the financing and purchase of assets, in a market that offers potential strong cash-flow visibility, multinational tenants and strong absorption,” said Tim Mooney, Partner and Global Head of Real Estate at Varde Partners. “India is a dramatic example, but emblematic of what we’re seeing across the Asia Pacific region, and across the globe. We believe that a real estate cycle is upon us and while not nearly as pronounced as the cycle brought on by the global financial crisis, the opportunity set is significant and growing.”

Varde Partners is a leading global alternative investment firm with roots in credit and distressed. Founded in 1993, Varde Partners has invested $75 billion since inception and manages more than $14 billion across corporate and traded credit, real estate and mortgages, private equity and direct lending.

Indian real estate sector is expected to continue to witness increased interest from global institutional investors and higher allocation of long-term capital from them given the limited growth opportunities in other developing markets.



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