Bhavin Thakker, Country Manager-Tenant Representation, Savills India talks about the changes Indian commercial real estate gone through in 2017. Demand is led by technology and related industries. Demand in Delhi-NCR has been consistant while the vacany rate has been between 3-15%. In Mumbai, demand for office space has been led by Pharma, BFSI, media consulting and FMCG firms.
Developers are increasingly combining hotels with projects such as malls and office complexes to extract the most out of their properties, given the high capital costs and the glut in the real estate sector
Integrated development may become the trend for the hospitality and real estate sectors.
Developers are increasingly combining hotels with projects such as malls and office complexes to extract the most out of their properties, given the high capital costs and the glut in the real estate sector. Even owners in leisure destinations are looking at setting up hotels in mixed-use projects.
There are advantages in setting up larger and varied developments. A hotel could benefit from demand generated by workers in adjacent offices. Retail outlets could improve a property’s restaurant and banquet offerings. Guests could find it more convenient to have quality lodging and retail options within the same complex.
The Hilton chain is trying to create higher value for its owners and more fruitful experiences for its guests through the integrated development model.
“In terms of upcoming projects, we have joined hands with our partners, Embassy Group, to manage over 600 rooms across our Hilton and Hilton Garden Inn brands at Embassy Manyata Business Park,” said Kaushik Vardharajan, VP for development at Hilton India, referring to the property in Bengaluru. “We are evaluating more of such opportunities and are committed to leverage them.”
Hilton’s Garden Inn New Delhi and Hilton Garden Inn Gurgaon Baani Square are located next to prominent retail spaces.
“These hotels have very quickly become the preferred choice for guests in their respective markets due to the hospitality, location and integrated utility we offer,” said Vardharajan.
Consultants said such projects are being considered even in leisure locations such as Goa, Mysore, Rishikesh, Haridwar and Jammu & Kashmir, where property owners face a glut.
“There is a lot of unsold inventory and they are trying to evaluate if those can be converted to hotels,” said Romesh Koul, CEO of Naaz Hotel Consultants. “Hospitality has also shown an upswing compared to the real estate sector. We are looking at projects in locations like Rishikesh and Noida.”
“Retail or commercial spaces, serviced apartments, hospitals, large-scale clubs are a few primary components of a mixed-use hotel development. Some of these components, being demand generators themselves, contribute direct business to the hotel. The quantum of such projects is more now as it makes absolute financial sense provided the other elements are amalgamated right at the design and planning stage. We are conducting multiple feasibility studies and brand searches with mixed use developments for our clients in cities like Goa, Gurgaon, Dehradun and Udaipur” said Beni Agrawal, founder of GK Hospitality Services.
Investors, too, are seeing returns emerging from such projects.
The St. Regis Mumbai is the only hotel owned by Pallazzio Hotels & Leisure and forms part of the mixed-use development at High Street Phoenix. Phoenix Mills raised its stake to 73% in Pallazzio Hotels & Leisure earlier this year.
“During the first half of the current fiscal year, St. Regis recorded a 21% increase in room revenue (Rs 546 million) with an average occupancy of 72% (up from 65% a year earlier). The hotel also saw an impressive 24% year-on-year increase in EBITDA to Rs 430 million,” said Shishir Shrivatsa, joint MD of Phoenix Mills.
Closure of sand quarries across river Cauvery and Kollidam in August this year took its toll on the construction industry bringing the building construction to a near-halt in the past four months in the state including Trichy
Builders Association of India (BAI), Trichy chapter expressed its displeasure at the slump in their business due to the acute scarcity of river sand following the closure of the sand quarries at several places across the state.
Closure of sand quarries across river Cauvery and Kollidam in August this year took its toll on the construction industry bringing the building construction to a near-halt in the past four months in the state including Trichy.
The builders in Trichy saw an unprecedented decline in the number of construction projects due to the poor availability of sand.
Upset by the unprecedented sluggishness, BAI Trichy chapter chairman R Murugesan pointed out that there was a sharp decline in construction of buildings by 90 %. For instance, the construction of 10 to 15 buildings was taking place in Trichy whereas the number was 100 to 150 before the closure of the quarries.
“Unavailability of sand causes severe damage to the business. We are looking at alternatives to revive the business here,” Murugesan told ToI on the expo- Build Rock – 2018 organised in Trichy on Monday.
As far as Trichy district was concerned, the areas in Thiruverumbur and Vayaloor road saw a boom in the business, but the current situation stalled the business.
The very limited supply of sand from only nine quarries functioning in Cuddalore, Vellore and Nagappattinam in the state upped the sand price to Rs25,000 from the normal price of Rs4000 to Rs5000 per two units earlier thus increasing the construction cost from Rs1900 to Rs2100 per square feet.
Former chairman of BAI, Trichy C Kumaravelu was of the opinion that the M-sand could be the alternative for river sand in the places where the river sand was expensive. The districts close to the sand quarries will opt for river sand instead of M-sand in terms of price.
“The price of M-sand is little more than the river sand in places like Trichy. Further, the government should clear the air over the quality of M-sand to people, because there is no clear idea about M-sand to anyone,” said Kumaravelu.
Referring to issue of real estate developers leaving projects unfinished much to agony of home-buyers, the UP chief minister said that builders had promised to handover 80,000 apartments to consumers in the next six months
Uttar Pradesh Chief Minister Yogi Adityanath on Monday announced new Metro projects for Agra and Kanpur in the state and said that the work for setting up an airport at Jewar near here also had been expedited.
Two major expressways are also being planned in the state, he said.
Referring to issue of real estate developers leaving projects unfinished much to agony of home-buyers, the UP chief minister said that builders had promised to handover 80,000 apartments to consumers in the next six months.
He was addressing his first public meeting at Noida after the inauguration of the Metro’s Magenta line by Prime Minister Narendra Modi.
It is an achievement to have prime minister in the state, Adityanath said as he welcomed Modi. The prime minister, Adityanath said had given a new direction to politics and added that till even a single individual remained downtrodden, we should make efforts to solve his problem.
Attacking the previous regimes in the state, Adityanath claimed that under their rule, Noida, Greater Noida and Yamuna Expressway region was a money minting machine.
Adityanath said that his govt was taking public welfare projects on a priority basis.
Referring to the inauguration of the metro line, Adityanath said the event was the “foundation stone of the development of Noida and state”.
The UP CM said that as per Modi’s directions, he was working on the basis of participation of all and development for all (Sabka saath, sabka vikas) principle.
Aditynath said that in the nine months of his rule, he was taking decisions without any partisan attitude or self interest.
All decisions are in public interest, he added.
The UP chief minister referred to agriculture in the state and claimed that sugarcane farmers’ dues were being paid on time while the power supply too had improved.
Adityanath said his govt was tough on criminals as well.
The buyers raised slogans and displayed placards near Sector 18 Metro station, Botanical Garden Metro station and near Amity University, Sector 125.
Hundreds of homebuyers, whose apartments were delayed by builders like Jaypee, Amrapali and Unitech, held a ‘silent protest’ even as Prime Minister Narendra Modi inaugurated the Magenta Line of the Delhi metro. The buyers raised slogans and displayed placards near Sector 18 Metro station, Botanical Garden Metro station and near Amity University, Sector 125.
“We have no faith in the commitment given by chief minister Yogi Adityanath. It is just an eyewash,” Abhishek Kumar, president, Noida Extension Flat Owners Welfare Association (Nefowa), said.
“We want the Prime Minister to intervene. The numbers being shown are of the flats which are under construction and are in the process of completion. What about the flats where construction has been stopped or those whose builders have fled leaving buyers in the lurch?” Shweta Bharti, general secretary, Nefowa, asked. “For long, it has just been about promises. We want to see a concrete plan on the ground to complete the hung projects,” Indrish Gupta, co-founder, Nefowa, who was among the 10 buyers who met the chief minister on Saturday, said.
Meanwhile, as the homebuyers staged protests throughout the day demanding completion of pending projects, builders’ group, Credai, said 80,000 apartments would be delivered by March, as promised.
“The target of 80,000 houses is achievable. In fact, all the delayed apartments can be delivered in 2018. The three authorities— Noida, Greater Noida and YEIDA expressway—and the builders need to work like partners and jointly solve the problem. Many projects, though physically ready or nearly-ready, are not getting completion certificates or last-mile funding because the authorities have declared them financial defaulters. The authorities need to stand by their assurance of encumbrance-free title at the time of allotment,” said Pankaj Bajaj, president, Credai NCR.