Recession downs retail rentals by 25% in Ahmedabad

Retailers in turn ask for share in revenues.

All’s not well with the retail scenario of Ahmedabad. While many retailers have downed their shutters or are downsizing their existing stores, the rentals are also on their way down.

The rentals have gone down by 20-25% in the last three months owing to recession. The rentals on CG Road are in the range of Rs 90-100, down from Rs 120-130 three months ago, industry watchers said. On SG Highway, which houses a maximum number of malls in the city, the rentals are down from about Rs 110 per sq ft to Rs 75-90 per sq ft, according to mall owners.

The retailers on the other hand are now asking for a pie in revenues. “The retailer store owners in Ahmedabad are demanding 8-12% share in revenues from mall owners,” said an official working in a mall.

The footfalls are down by 25-30% on weekdays while it is down by 40% on weekends, as per industry estimates. Also the retailers are seeking a 15% reduction in common area maintenance (CAM) rates by 15%. “We have one of the most reasonable prices in the city. Already from the beginning our rates were lower than others by 15% and we further slashed another 15% three months ago. Hence we are not planning to slash the rentals any further,” said Harit Kothari, senior marketing manager, NG Group-the promoters of Gallops Mall on SG Highway.

Malls on an average are seeing an occupancy level of about 65-70%. Reliance Retail has downsized its hypermart format – Reliance Mart in Iscon Mall on SG Highway, sources familiar with the development said.

Future Group has meanwhile closed down its 70,000 sq ft Big Bazaar near Shyamal Cross Roads. Subhiksha has also downed shutters of a couple of its stores in Ahmedabad and is re-structuring its business. RPG group owned Spencer's retail does not find Ahmedabad a viable business option and has decided to quit. "The closing down of Spencer's retail stores in Ahmedabad is because we did not achieve the targeted revenue. Moreover, Ahmedabad does not seem to have a potential in organised retail in the near future," says Samar Singh Shekhawat, vice president-marketing of Spencer's Retail.

While real estate developers like Alpha G Corp and Modi-Build Well Ltd. agree to correction in property rentals for retail stores in Ahmedabad, they deny any re-negotiations for their projects. The developers claim that their rentals were low from the beginning.

Ahmedabad-based Modi-Build Well, which built the Himalaya Mall has booked almost all retailers around 2-3 years ago. "We had leased almost all the retailers around 2-3 years ago at rates between Rs 40 per sq ft and Rs 60 per sq ft. An early entry into the market at low lease rates has insulated us from current corrections in rentals," said Kamlesh Modi, director of the real estate development company.

Indiabulls has also closed two of its hypermarts in the city as it is restructuring its retail business, sources said. "The correction that has been taking place in rentals for retail stores is related to properties with high rates. Our upcoming project in Ahmedabad has a low average rental of around Rs 70 per sq ft.," said S K Sayal, chief executive officer and director of Alpha G Corp Development Pvt. Ltd., who is developing the Alpha One, a one million sq ft huge mall-cum-hotel project in Ahmedabad, which will come up in 2009.

”We have not negotiated the rentals in the past few months and there has been no change in our rentals at Ten Acres. We have maintained a consistent Rs 55 per sq ft since the last six months," says Indranil Banerjee, general manager of Ten Acres, Ahmedabad City Mall.

The city has witnessed no fresh supply of malls in third quarter of 2008 with the projected 220,000 sq ft development that was scheduled for completion in second quarter being postponed to the last quarter, according to Cushman & Wakefield report. Few retailers have moved out of non-performing malls due to lower conversions causing higher vacancy levels in the existing malls, it said. The city is expected to witness mall development of approximately 870,000 sq. ft. in the next six months, which is likely to put pressure on the current mall rentals, according to real estate consultant Cushman & Wakefield.

Source: business-standard.com

India to set up new land registration system

A report by India’s Department of Land Resources proposed the setting up of a property registration system in the country, with a registry similar to that in the UK proposed. A system of conclusive titles that will guarantee property titles will be introduced soon, according to the Development Minister, Prasad Singh. This will help to combat the problem of fraud over property exchanges that are growing as the country’s real estate market opens up. A single agency will handle all land titles and records so that true ownership is documented and guaranteed. This will be in contrast to the current system, which merely records transactions. Registration of property in India now only amounts to a certification of the transaction, but it does not ensure the title of the property. Currently, in order to verify the title, a prospective buyer or developer has to do an extensive search through various sources, which is costly and time consuming.

In addition to the land registry, the Department is also computerizing all land records using a Geographic Information System (GIS). This process is under way and will combine the two existing programs into the National Land Records Modernization Programme. This system will digitize all land records and help with numerous other services and businesses, including emergency management, real estate, and banks and credit companies.

Source: indianrealtynews.com

Chennai to become world class city by 2026

For the first time, the restriction on Chennai’s vertical growth has been lifted. In a vision for the next 18 years, the city has a new master plan. From now on, the Chennai metropolitan development authority will even permit hundred floors if the building is abutting a hundred feet road. Earlier, a ceiling and only 29 floors were permitted. The Chennai real estate industry is delighted. “This means better lighting, better ventilation, and fantastic designs due to the vertical growth,” said T Chitty Babu, CMD, Akshaya Homes.

Those who live in smaller homes will also be benefited by the city’s master plan. The floor space index or FSI has been altered from 1.5 to 1.75, up to a maximum of 450 square feet. It means that those who have a plot of say 200 square feet could build a house up to 350 square feet on two floors. And there could be more residential areas along the city’s mass rapid transport system, as the FSI has gone up from 1.5 to 2. That means they will have thirty percent more space to build. And ten percent of homes ought to be earmarked for economically weaker sections in all private projects developed in a hectare or above. “Our aim is to provide accommodation to the rising population of the Chennai metropolitan area,” said Susan Mathew, vice chairperson, CMDA. Chennai will soon join the high skyline club of Delhi, Mumbai and Gurgaon to become a world class city.

Source: indianrealtynews.com

Pantaloon Retail Launches Big Bazaar in Ranchi

Pantaloon Retail (India) Limited, part of the Future Group, today announced the launch of its flagship hypermarket retail store – Big Bazaar – in Ranchi city. This is the second Big Bazaar in Jharkhand region and the first biggest store with 80,000 sq.ft area in East Zone for the company.

With the launch of Ranchi Big Bazaar, Pantaloon Retail now has a strong chain of 83 Big Bazaar stores across the country. At Ranchi, Big Bazaar located at J C Tower, Kadru More, Main Road, will cater to every single household needs for the citizens of the city and its neighbourhood towns.

Trusted by millions of family across the country, Big Bazaar will bring value to customers shopping, with its unmatched offers, discounts and unbelievable round the year promotions on all categories be it personal care products, garments, footwear, toys, home décor, home utilities, kitchen utilities, packed food, pulses, fruits or vegetables, groceries and many more.

Says Mr. Sandeep Marwaha, Head, East Zone, Pantaloon Retail (I) Ltd., "Big Bazaar will bring convenience plus rich shopping experience to the people of Ranchi. We are a consumer-driven company and we ensure that all our Big Bazaar stores fulfill the needs of the entire household under one roof.

“Big Bazaar maintains stringent procurement norms and quality control measures to ensure quality products sold at every Big Bazaar stores. We are confident of our offerings both in quality and competitive pricing, which has earned us the trust of millions of family across the country, added Mr. Marwaha.”

Ranchi Big Bazaar will have following categories/section devoted to specific products:
Food Bazaar: All food items, pulses, grains, fruits, vegetables
M-Bazaar: A mobile shop offering latest and affordable handsets.
Depot : Book shop offering novels, cassettes & CDs, stationeries, books.
Apparel : For Ladies, Men’s, Kids for all season. Western, ethnic, casuals & formals
Appliances: All kitchen appliances like Mixer Grander, Toaster, Microwave, Juicer.
GM-Home: Entire range of kitchen need, Utensils, Plastic-wear, Home-linen
GM-Fashion: Accessories, Luggage, Gift items and many more…
Furniture Bazaar: Offers an entire range of Home Furniture at affordable pricing.
Electronic Bazaar : Offers the best deals in branded electronic goods & appliances.
Live Kitchen: Offers fresh baked products like bread, cakes, and pastries.

About Pantaloon Retail (India) Limited
Pantaloon Retail (India) Limited is a leading retailer with a turnover of over Rs. 3550 crore for the financial year 2006-07. Headquartered in Mumbai, the company operates through primarily the ‘Lifestyle’ and ‘Value’ formats through multiple delivery mechanisms and lines of business — some of them being, fashion, food, general merchandise, home, leisure and entertainment, financial services, communications and wellness. The company has stores in 54 cities across the country, constituting over 7 million square feet of retail space. The company caters to the ‘Lifestyle’ segment through its 39 Pantaloons Stores and 5 Central Malls, as well as its other concepts. In ‘Value’ retailing it is present through 83 Big Bazaar hypermarkets, 130 Food Bazaars and other delivery formats.

Demand for serviced office space grows in Bangalore

Bangalore, with a projected supply of 13 million sq.ft. of office space for the year, has not quite been able to satiate the immediate demand. The shortage of ready supply as well as heavy pre-leasing by corporates has increased the need for interim office space. Business Centres have strong growth recently with more focus on quality and international service standards.

Real estate services firm Cushman & Wakefield reports that high interest areas like CBD and Off CBD especially face this space crunch; and have the majority of operational Business Centres like DBS, Pan Asia, Golden Square, New Bridge as well as Regus in RMZ Millenia and Raheja Towers. Most of these offer corporates the advantage of an attractive location as well as a known address.

According to Cushman & Wakefield, Outer Ring Road currently faces a situation wherein the projects that are nearing completion have already been committed to by corporates, thereby creating a further dearth of supply. Yet, there are no operational Business centres in the area that can cater to the current requirement, although certain clients are provided incubation space by developers.

Suburban locations of Indiranagar and Inner Ring Road boast of centres like Stylus and New Bridge. North Bangalore, which is most likely to be the next preferred commercial location, is soon to have a centre by Stylus.

Whitefield, though facing surplus stock from the previous year, has also witnessed large pre-lease commitments. Currently, its interim requirements are being met by Regus business centre.

Pricing: The average cost per seat in Grade-A business centres ranges from INR 18,000 to INR 30,000 per month in Bangalore, depending on the location and quantitative requirement. Add-ons like telephone, fax, photocopying, internet, pantry, conference rooms, help/ travel desk and secretarial services come at an additional cost.

Hotels in the city also offer part of their business centres as temporary office solutions. Star hotels like Taj, Park, Leela, Windsor Manor, Lé Meridien etc. offer conference rooms on a day-to-day basis at rates ranging from INR 10,000 to INR 18,000 per day for an 8 to 16 seater. Only few city hotels offer cubicles which can be furnished at an approximate cost of INR 10,000 per day.

Incubation centres offered by developers, are usually based on the client's commitment for permanent space uptake and range from approximately 15 - 20% of the committed space. Generally in a Kirby structure (a temporary structure proximally located to the developing facility) fully furnished rates for these range from INR 65 to INR 75 per sq.ft. per month.

Due to continued demand for office space, Cushman & Wakefield expects that business centre occupancy levels in Bangalore will remain in excess of 75% through 2007. The charges/ rentals will remain stable over the next 6 months owing to sustained demand and new business centres being available in CBD and other suburban and peripheral locations.

Courtesy: INRnews

BDA to construct two lakh houses

The Bengalooru Development Authority (BDA) will build 2 lakh houses on 300 acres in different localities of the city. The houses will be built on government land recovered from encroachers by the Revenue Department. Out of the two lakh houses, 1.60 lakh will be allotted to middle-income groups and the rest to poor families. Under the Ashraya scheme, the Government has decided to construct group housing for families living below the poverty line in Bengalooru. The proposal will be placed before the Cabinet for approval, the Chief Minister, Mr H D Kumaraswamy said. As many as 38,000 houses have been constructed on revenue land in Bengalooru. Six lakh houses will be constructed under the Ashraya scheme. Since the implementation of the scheme is slow, the Housing Department has been instructed to construct 50,000 houses a month. Under the Suvarna Gramodaya programme, 10 acres will be acquired in each of the selected villages for allotment of housing sites. As many as 1,127 villages have been selected in the first phase.

Source: 99acres.com

Navi Mumbai international airport project drives up land prices

The proposed international airport project in Navi Mumbai is driving up land prices in areas such as New Panvel, Kalamboli and Kharghar. The City and Industrial Development Corporation of Maharashtra (CIDCO) has recently sold plots in the area for significantly higher amounts than recent market prices.

The Navi Mumbai International Airport would be one of the world's few ''greenfield'' international state-of-art airports offering world-class facilities for passengers, cargo, aircrafts and airlines. The airport will support the rapidly growing air travel needs of the Mumbai Metropolitan Region. It is expected to absorb annually 4.5 million passengers in its first operational year, doubling to 8.2 million by 2010 to 13.7 million by 2020 and 30 million by 2030 according to developer CIDCO.

The site of the airport in Panvel, to be developed through a public-partnership model, is located in an area of 950 hectares. CIDCO plans to sell 470 hectares in the periphery of the airport for development of hotels, malls, multiplexes and other aviation related facilities.

This real estate bonanza is sure to attract large developers to the area and drive up property prices. CIDCO recently sold 12 plots in the area for residential and commercial use at a significant premium to prevailing prices. For example, a 1535 sq.m plot was auctioned in New Panvel at Rs.47,200 per sq.m almost double recent prices. In Kharghar CIDCO has realised Rs.3,715 per sq.ft from a land sale.

Source: 99acres.com