Real Estate Magazine

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Bengaluru’s Real Estate and Tech Sectors Converge: CTRLS Data Centers and Intel Seal Lease Agreement

Sneha Niwate Bengaluru, 9th August 2023: In a significant development within the real estate landscape of Bengaluru, two prominent players have entered into a strategic agreement. CTRLS Data Centers Ltd, a leading data center operator, has joined hands with Intel Technology India Pvt Ltd, a global technology giant, for a high-value lease agreement. The agreement entails the licensing of two prime properties situated within the Bengaluru DC1 Building, located in the bustling area of Veer Sandra, Electronic City. The license, which spans a period of 36 months, establishes a firm commitment between the parties involved. The first property, situated on the 1st Floor, boasts an area of 2,500 square feet. Intel Technology India Pvt Ltd will be paying a monthly rent of Ra 11,25,000, translating to Rs 450 per square foot. The second property, an expansive space located on the 7th Floor, spans an impressive 9,036 square feet. The monthly rental for this space has been set at Rs 36,14,400, at a rate of Rs 400 per square foot. The license comes with specific terms, including a lock-in period of 36 months for CTRLS Data Centers Ltd and 12 months for Intel Technology India Pvt Ltd. The license commencement date has been fixed as June 1, 2023. Notably, a partial area of 2,940 square feet on the 7th floor will have its rent commence from October 1, 2023. This collaboration is expected to have a far-reaching impact on the real estate and technology sectors.

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Building Success: Navigating the World of Real Estate Finance – CA Mohnish Katre

Finance plays a critical role in the real estate industry as it provides the necessary capital to purchase, develop, and maintain properties. Real estate investments require significant amount of capital, and finance enables individuals and businesses to access the funds needed to acquire and manage real estate assets. Real estate by its nature is a capital intensive industry. The real raw material to scale up the business is Capital. The developers can scale up their game if capital is available at the right time. The liquidity raised via finance at the right time and used for the desired purpose can significantly increase the ROI. Many institutional lenders have evolved to understand the real estate business and designed various lending models. It’s great to see the focused lending teams who understand the inherent nature of the business and then offer lending products. The real estate developer can consider raising finance at the early stage in the project where the approvals are just received and the sales have started. The projects where the stage of construction has progressed, lenders look at such projects more positively as there is some established track record of execution and sales. The quality of capital available is way better in case of structured finance which gives more flexibility to developers for deployment of funds.   Sources of Real Estate Finance Let’s explore some common types of real estate financing options available to developers and investors:     Traditional Bank Loans: Traditional bank loans are commonly used to finance real estate projects. These loans typically offer competitive interest rates and flexible repayment terms. Developers can utilize these loans for land acquisition, construction, or refinancing existing debt.     Construction Loans from NBFCs: Construction loans provide short-term financing to cover the costs of constructing a property. These loans often have higher interest rates due to the higher risk associated with the construction phase. However, they can be tailored to match the project’s cash flow requirements and typically offer interest-only payments during the construction period.     Joint Ventures and Partnerships: Collaborating with other investors or developers through joint ventures or partnerships is an alternative financing option. By pooling resources and sharing risks and rewards, developers can access additional funds to undertake larger projects.     Private Equity and Venture Capital: Private equity firms and venture capitalists are increasingly participating in real estate investments. These entities provide capital in exchange for an ownership stake in the project or the potential for significant returns upon completion and sale of the property. This source is limited to organised and especially listed developers.     Real Estate Investment Trusts (REITs): REITs offer an opportunity for individuals to invest in real estate without directly owning properties. REITs pool funds from multiple investors and use them to invest in various real estate ventures, including construction projects. Investors can benefit from regular dividends and potential capital appreciation.   Financial institutions such as NBFCs (Non Banking Fiancial Institutions) play a crucial role in providing access to capital for real estate projects. Here are some situations in which finance can be raised from financial institutions.     Land Acquisition: When developers identify a suitable piece of land for their project, they often need financing to acquire it. Financial institutions can provide loans or lines of credit to cover the land purchase costs, allowing developers to secure the desired property.     Construction Financing: Construction projects require significant capital to cover various expenses, including materials, labor, and overhead costs. Financial institutions offer specialized construction loans tailored to the unique cash flow requirements of these projects. These loans are disbursed in stages or based on specific milestones to ensure that funds are available when needed.     Bridge Financing: In certain situations, real estate investors or developers may require short-term financing to bridge a gap between the cash inflow from customers and the amount of payment required to get the approvals (in the form of TDR, Premium FSI and other statutory payment) which is required in the early stage of business. Bridge loans, provided by financial institutions, offer interim financing until the long-term financing is secured by the developer.     Inventory Finance (Last Mile Funding): Typically the projects which are at the last stage of development at times may have inventory of units which will be sold over the period of 12 to 24 months. In such situation, the real estate developer can consider the inventory finance where the future cash flow from this inventory will be discounted to current date and given to the developer. This inventory finance can be used for acquiring new projects or the use of funds for the general corporate purpose.     Structured Finance: Structured finance in real estate refers to intricate financial arrangements where multiple projects are combined to create tailored loan products. The objective of such fund raise can be for the scenarios such as giving exit to a partner or use of the borrowed funds to acquire another project. Financial institutions along with professional advisors devise such solutions.  In summary, the liquidity plays key role in defining the real estate operations and the ROI. The institutional funds if used with discipline, can fuel up the progress and drive more profitability.  Real Estate project finance in nutshell is discounting the future cash flow of the project and making it available to the developer to execute the project faster. Raising finance has become relatively easier in the recent time. If the developer has good execution track record, they can take help of institutional finance to scale up faster. By leveraging appropriate financing strategies, such as inventory finance or structured finance, developers can secure the necessary capital to acquire land, construct properties, and maintain inventories. With a proactive approach to finance, the potential for growth, profitability, and success in the real estate industry becomes within reach. So, seize the opportunities, explore the financing options available, and embark on your real estate ventures with confidence and financial support.   CA Mohnish Katre Partner

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Credai Pune Metro welcome state government’s IT Policy 2023

Pune: Ranjit Naiknavare, President, CREDAI Pune Metro said, “We welcome the new IT Policy 2023 announced by the Government of Maharashtra. It truly encourages digital transformation and will take us towards making Maharashtra a leading Digital Hub. The CREDAI Team, led by Amar Manjrekar, was coordinating with the concerned government departments for faster introduction of this policy. This policy will help in facilitating creation of the required infrastructure and jobs for skilled professionals which will directly – indirectly help the real estate segment.” The policy aims to attract new investments to the tune of 95000 Cr that can generate close to 3.5 Lakh new jobs which can eventually translate into an export of 10 Lakh Cr. If this target is achieved then the state will emerge as the technology capital through the balanced development of the state. The new IT Policy 2023 will make Maharashtra as the first choice of new IT companies that are looking for setting up their operations in India or for the ones that are looking for expansion. It will boost the demand for commercial space for the use of IT and ITES companies since it proposes a lot of benefits like a waiver of stamp duty, electricity duty, and water charges. IT and Data Center Industry would be allowed 24X7X365 days and would be under ESMA Act. To boost the presence of IT & ITES units across the state, the policy provides incentives, rental expenditure, electricity duty, Power Tariff, and property tax etc. Further, IT Parks or IT Units could be set up in residential, no-development & green zones are some provisions which will prove to be beneficial for the commercial segment in real estate. Additional FSI of 5 for Greater Mumbai while 4 for other areas. Relevant DCRs, CDCPRs & UDCPRs will be amended accordingly by all concerned Special Planning Authorities (SPAs). No premium will be charged for additional Floor Space index (FSl)’ in Vidarbha, Marathwada, Dhule, Nandurbar, Ratnagiri and Sindhudurg, while only 50% of applicable premium will be charged in other developed areas of State is also a welcome step and contribute towards well spread infrastructure development across various regions of Maharashtra.

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Khushboo Jain

Soul Reading and Healing  Alternative Healing Methods are becoming increasingly popular for those feeling stuck in their Personal or Professional Lives.  I am a Soul Reader who can help Clients overcome fear, anxiety, insomnia, emotional and mental issues, limiting beliefs, financial crisis, relationship, marriage, family issues and lack of direction. Her services are particularly useful for those in the Real Estate Business struggling with property-related issues. Soul Reading and Healing is a unique form of Alternative Healing that goes beyond Physical or Energetic Healing. It involves Healing at the Soul level, which can have a profound impact on every aspect of our lives, including physical health, mental wellbeing, emotional state and spiritual growth.  I am a gifted psychic and intuitive Healer who can tap into the secrets held within a person’s Soul, which can help to heal and transform every aspect of their life, including their business and financial dealings. I can connect with their spirit guides and receive channelled guidance, visions, and messages that can help them navigate the situation with more ease and success.  I help people in the Real Estate Business who are struggling with limiting beliefs or negative thought patterns that are holding them back. By connecting with their Soul Energy, I can help them to release these blockages and achieve greater success in their business.  In addition, I can provide insight and guidance to those facing financial difficulties, as well as individuals and couples navigating relationship issues, like marriage and family problems. For those feeling lost or directionless, I can help them find their purpose and focus their energy on achieving their goals.  To sum it up, I am a skilled and compassionate Healer who can help Clients overcome any obstacles that are holding them back in life. Through Soul Reading and Healing, I can help unlock their true potential and live their best lives.   If you are struggling with fear, anxiety, insomnia, limiting beliefs, financial crisis, relationship problems or lack of direction, please feel free to contact Me.   Author Details Ms. Khushboo Jain Owner, Enlightenment www.khushboo.me khushboo.daglia@gmail.com

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Apurva Sarda –

Pune: The Sweet Spot for Real Estate Investment in India   With more than 12 years of experience in the stock market, I have realized the importance of diversification. In my first two years of investment, I faced huge losses due to heavy concentration in my portfolio. However, I learnt from my mistake and redesigned my portfolio with proper diversification. I came up with a simple formula where an equity portfolio should consist of 15-25 stocks. We should also keep in mind that we should not invest more than 10% in any one stock and not more than 30% in any sector.   Similarly, in my first 5 years of experience in the stock market, I realized that diversification should expand beyond the stock market as an asset class. Real estate is one of the best asset classes to hold for the long term, and it has given multifold returns to the investors in India. It is an illiquid asset, where selling is a major problem in India. However, with the growth in the channel partner sector and shadowing the western culture, the problem of selling will decrease.   We have seen the stability of real estate during the 2008 financial crisis and COVID-19 in 2019. When the stock market just crashed, the real estate market was very illiquid, but there was very little impact on it compared to the stock market. With the cushion of stability, real estate in India is giving amazing returns (approximately 4% rental yield + the capital appreciation). However, the financial capital Mumbai has saturated when you see the returns in real estate due to higher costs and low land availability.   Pune is in a sweet spot to grow in the real estate space. The city is well connected to Mumbai and has immense scope for development. Being born and brought up in Pune, except for the 4 years which I spent in Sydney, Australia studying and working for the Commonwealth Bank, I can see the city growing horizontally and vertically. The recent redevelopment projects in the prime locations of Pune are making it very attractive for the end-users. The second-biggest listed player from real estate, Macrotech Developers (Lodha), has entered Pune with a bang.    Ready Inventory of INR 9b and strong launch pipeline of 1.1msf, they are seeing immense potential in Pune. With metros connecting the outskirts of Pune, the capital appreciation will reach more than 8% CAGR, adding an average of 4% rental yield in total, and give more than 12% returns. In the current market, this is difficult to earn from a few large-cap names in the stock market, considering the volatility and risk associated with it.   Author Details: Name: Apurv Sarda Designation: Business Partner Email: apsafinancialservices@gmail.com Business name: Motilal Oswal financial services ltd

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Dr. D.K. Abhyankar – MAKING CITIES INCLUSIVE, SAFE, RESILIENT, AND SUSTAINABLE

Urbanization is often linked with economics – increased job opportunities, a centralized market, better pay, and higher individual wealth have all drawn people into cities. For a long time, these pull factors are what caused cities to grow. India is the second-largest urban system in the world with 11% of the total global urban population living in the Indian cities. The UN estimates that India will be more than 50% urban by the year 2050. Urbanization has proven magnificent growth in the last few decades.   However, problems associated with urbanization like High population density, inadequate infrastructure, lack of affordable housing, flooding, pollution, slum creation, crime, congestion, and poverty cannot be ignored. Therefore, it is necessary to see the Big-Picture and prepare a scientific master plan for sustainable urbanization. The government’s various sustainable initiatives in the country such as the development of Green Building standards, policy advocacy and capacity building of, green building professionals will be a valuable addition. Local governments do play a vital role in educating, mobilizing, and responding to the public to promote sustainable development. Half of our cities are still expanding in an unplanned, unscientific manner without any master plan to guide their growth. Cities having no master plans leads to disorganized and unmethodical growth. The chief and the principal challenge is to prepare a detailed Scientific Master Plan to make a city worth liveable. Examining critically the role of every partner in developing ‘liveable cities’, assuring secured and comfortable life to all, without discrimination is necessary.  UN Sustainable Development Goal 11 titled “sustainable cities and communities”, is one of 17 UN Sustainable Development Goals established in the year 2015. The official mission of this goal is to “Make cities inclusive, safe, resilient and sustainable”. This goal takes into account that action in one area will affect outcomes in other areas as well and that development must balance social, economic, and environmental sustainability.  Integration of environment and development concerns and greater attention to them will lead to the fulfillment of basic needs, improved living standards for all, better protected and managed ecosystems, and a safer, more prosperous future. No nation can achieve this on its own, but together we can, in a global partnership for sustainable development.  Sustainable development is influenced by various factors such as the economic environment, social, cultural aspects and political system. Without economic development, the welfare of human beings is not sustainable. The social and cultural aspects also influence greatly in the sustainable development. Society at large has the responsibility to ensure, abide by various rules and regulations and respond positively. The political leaders should restrict their role, only in policymaking. They can play an essential role in bringing social and cultural awareness.  Sustainable development consists of environmental protection, social equity, and economic growth. It is attainable by adopting good governance and creating an adequately regulated sound financial framework, and legal regulatory structure to protect property rights, enforce contracts and stimulate competitive markets, equitable health, education, and social and public services.  The core city agenda would be meeting the challenge successfully only through new thinking, precise policies, and decisive actions within the urban domain. Focus has to be more on liveable cities, more responsible resource use, march towards the quality of life, eco-balancing and depolluting the cities. The dreams of sustainable development of cities can be materialized only through the ‘formation of new partnerships’ and at the same time curtailing the growth of non-sustainable development which takes place simultaneously, by paying higher direct and indirect costs. Secondly, Transit-Oriented Development (TOD) has gained popularity to redress several urban problems, including traffic congestion, affordable housing shortages, air pollution, and incessant sprawl. Therefore, Indian cities must expand on the back of TOD. It has multiple benefits through vertical development as it reduces the number of cars, and increases walkability and bike-ability. All these collectively lead to enhance productivity.  There is also a need to densify our cities, build them vertically, and reap mass benefits of intensifying economic productivity and lowering the transaction cost. The maximum FSI in Singapore is 25, Tokyo 20, and New York 15 whereas in Mumbai it is 1.33 and in Pune, it is 1.25. Restricting the FSI to such a low levels creates distortions in the land market. Keeping FSI artificially low to control the densities is a tactical failure. The key component-WATER. Water will be a key factor in our ability to sustainably manage our cities and enhance the quality of life of our citizens. With all the severe droughts happening in the world, the limited supply of freshwater is becoming one of our most precious resources. Every person on earth needs water to survive. Conserving water involves refraining from water pollution. This requires the use of strategies that includes reducing wastage, preventing damaging of water quality, and improving water management. Indian cities need to collect, treat and reuse used water on a vast scale and need to be fully severed to collect all used water. There is a willingness to pay for a regular supply of water but political unwillingness to charge for water. There is a necessity for sensible policy for pricing water. This has long-term implications in making water boards financially bankrupt. The pricing mechanism should be based on ‘pay as you use’ with direct benefit transfer of a subsidy for those who cannot afford to pay. Lastly, states need to build up a group/panel of professional urban managers, create an ecosystem of friendly regulations, reform building bye-laws, and use upgraded technologies. With Indian cities growing at a very rapid pace in terms of population and technology, there’s a constant need of managing future expansion. States need to provide greater financial autonomy and administrative freedom to cities as ultimately, successful cities are elemental to building a successful nation. The challenge for Indian states is to use urbanization as an instrument of growth, job creation, and elimination of poverty.    Authored by: Dr. D. K. Abhyankar Co-Authored by: Adv. Renuka Gokhale

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