Thursday, June 20, 2024

Construction Ticker February 2023

Maharashtra Deputy CM Fadnavis assures support for completion of Bhendi Bazaar redevelopment

Deputy Chief Minister Devendra Fadnavis attended a ceremony to lay the foundation stone for Phase II of the project recently and assured the Saifee Burhani Upliftment Trust (SBUT) of complete support of the government towards the completion of the project.

The ceremony was presided over by His Holiness, Syedna Mufaddal Saifuddin, the leader of the Dawoodi Bohra community and Fadnavis. In his address, Fadnavis said, “The Bhendi Bazaar Upliftment Project is aimed at positively impacting the lives and livelihoods of people and upgrading the dilapidated infrastructures of Bhendi Bazaar. This project is providing a blueprint for the Urban Renewal projects in Maharashtra and rejuvenating congested areas of Mumbai like Dharavi.”

“We all talk about transformation, but this project has gone beyond transformation to provide quality living spaces to the people by building a smart city,” he said adding, “Even the transit facilities are well organised and something for the government to replicate as well. I assure you the full support of our government towards the completion of the project.” Sector 4 named ‘An-Nasr’ covers approximately 1.5 acres of the overall 16.5 acres of land undertaken for redevelopment. An-Nasr will house nearly 1400 residential units and over 375 businesses. 74 dilapidated buildings will make way for two new towers of 53 and 54 storeys each.

An SBUT spokesperson said, “We’re grateful to Devendra Fadnavis for being part of the foundation stone laying ceremony of sector 4 and applauding our upliftment project. This project will be important in building a smart city. With the support of the government, we hope to complete the project and bring back our tenants as soon as possible.”

The redevelopment area undertaken by this project is divided into nine sub-clusters for better management and functionality. The second phase of the redevelopment project also includes Sector 6 Al-Ezz, the construction work for the same began in 2021. In 2020, SBUT completed the first phase named Al-Sa’adah aimed at improving the living standards of over 610 families and 128 businesses. The Trust also provided retail establishments within the planned constructions for roadside vendors. It is pertinent to note that in August 2022 during a discussion on the city’s infrastructure in the legislative assembly, Fadnavis announced a probe by BMC into the redevelopment project on the ground that the original sanctioned plans were altered by SBUT. Two days later, the BMC served a stop-work notice on the project. In November, the civic body revoked the notice and gave a clean chit to the project.

Industrial & Logistics sector leasing grew 8% YoY

Industrial and Logistics (I&L) sector leasing grew by 8 per cent YoY to touch 31.6 million sq. ft. in 2022 despite global headwinds, and a slowdown in e-commerce demand and dissipation of the post-pandemic need to hold additional inventories, a report said.

“This is the second-highest leasing activity recorded in the I&L sector after the 2019 peak of 32 million sq. ft.,” the report released by CBRE South Asia said. Delhi-NCR led the absorption with 7.3 million sq. ft., followed by Mumbai and Bengaluru with 6.1 million sq. ft. and 5.2 million sq. ft. in 2022, respectively.

Also, Delhi-NCR, Mumbai and Bengaluru accounted for almost 60 per cent of the leasing activity during the year. All cities recorded stable or increased annual space take-up except Bengaluru and Pune. “Mumbai, followed by Delhi-NCR dominated large-sized deal closures in 2022, together accounting for about 44 per cent of large-sized deals.” Chairman and CEO-India, South-East Asia, Middle East & Africa, CBRE, Anshuman Magazine, said: “The intent to strengthen the supply chain among global and domestic companies drove the leasing activity in 2022. The activity in 2023 is expected to remain range-bound, driven by sustained demand. On the supply front, we foresee project completions to exceed the 2022 levels and be in line with space take-up during 2023.”

During the July-December 2022 period, supply addition improved by 11 per cent on a half-yearly basis to 11 million sq. ft.

These development completions were led by Delhi-NCR, Chennai, Bengaluru and Mumbai, all of which together accounted for about 73 per cent of the total supply, the report said.

CRC group to develop 2 million sq ft in Noida, to invest Rs.810 crore

Noida-based real estate developer CRC group has acquired about 11-acre land on the Noida expressway for Rs.138 crore to develop a mixed use office project, a senior executive said.

The company will invest another Rs.650 crore for the construction of the project which will have about 1.2 million sq ft of office space, 3 lakh sq ft of retail and about 100 serviced apartments.

Total project value is about Rs.810 crore and will be completed within 38-40 months. CRC will sell about 30-40% of the project which will fund the construction. The investment by the company is part of Invest UP initiative by the state government. Invest UP is an investment promotion and facilitation agency powered by the state government of UP. CRC group has so far delivered several projects spread across 1.5 million sq ft and about 3.5 million sq ft is under various stages of construction.

Snowman Logistics takes 50,000 sq. ft warehousing space at Hosur industrial park

Snowman Logistics Limited (SLL) – India’s leading integrated temperature-controlled logistics service provider – has taken a 50,000 sq. ft warehousing space at Horizon Industrial Park, Hosur I. This will be SLL’s first dry warehouse and its largest with 5,500 pallet positions. SLL has one of the widest temperature-controlled warehouse networks in India spread across 41 facilities in 19 cities. Its network of 130, 202 pallets capacity a fleet size of over 400 helps reach over 500 cities across the country.

Arkade Group completes Rs.100 crore land acquisition

Arkade Group has completed the acquisition of approx. 8300m2 plot in eastern suburb of Mulund West from Hercules Hoists (Bajaj Group company). Significantly, this is the first transaction in this CY 2023 in Mumbai for transfer of land of above Rs.100 crore.

Arkade has also perused the document pertaining to registration of conveyance deed done at Chembur. The sale deed shows that payment is made in full and possession is transferred to the buyer.

Arkade Group will launch a residential project offering 2 & 3 BHKs with construction area of approx. 5,00,000 square feet and topline of Rs.600 crore. This acquisition is in addition to the two million sq. ft. development on-going across Western suburbs.

Housing prices rise by 7% in 2022 across top 8 cities
Increase in the cost of construction coupled with pent-up demand resulted in an appreciation of housing prices by an average 7 per cent during the last year. The average housing prices increased 7 per cent last year across eight major cities to Rs.6,700 – Rs. 6,900 per square feet as compared with the 2021 calendar year. As per the Real Insight report, the rise in prices of residential properties, however, did not impact sales during 2022 because of huge pent-up demand from the previous two years (2020 and 2021), which saw muted customer demand because of the COVID-19 pandemic. “Housing prices remained by and large stable during the 2016-21 period. The year 2022 saw an appreciation in prices as the rates of key construction materials increased because of global headwinds like the Russia-Ukraine war. Strong revival in demand for both under-construction and ready to move in units also played a role in modest single digit increase in prices,” said Vikas Wadhawan, Group CFO,, & “With the increase in the overall construction cost, builders were forced to raise the basic selling price (BSP) of apartments,”. Gurugram saw the highest price appreciation of about 13 per cent, Bengaluru and Delhi-NCR, both, witnessed a 9 per cent growth in prices, followed by Pune (8 per cent). Ahmedabad and Kolkata saw 7 per cent appreciation each in housing prices. According to the data, the housing prices in Ahmedabad went up by an average 7 per cent year-on-year in 2022 to Rs.3,600-Rs.3,800 per square feet. Southern markets continue to rise while in Bengaluru, the rates appreciated 9 per cent to Rs.6,000-Rs.6,200 per square feet. Similarly, Chennai also grew by close to 5 per cent to Rs.5,600-Rs.5,800 per square feet. Since Hyderabad has already seen high double-digit growth in the last few years, the market seems to be seeing some plateau in terms of growth rate. Although the realty prices continue to rise in the city of Nawabs and grew by about 4 per cent to Rs.6,100-6,300 per square feet. In Delhi NCR, the prices of residential properties rose 9 per cent to Rs.4,800-Rs.5,000 per square feet. Among two major markets of Delhi-NCR, Gurugram saw a surge of 13 per cent to Rs.7,000-Rs.7,200 per square feet while Noida witnessed a growth of 7 per cent to Rs.5,400-Rs.5,600 per square feet. The prices appreciated by 7 per cent in Kolkata to Rs.4,600-Rs.4,800 per square feet.

Mumbai saw an increase of 5 per cent in housing prices to Rs.10,100-Rs.10,300 per square feet. Housing prices in Pune rose 8 per cent to Rs.5,500-Rs.5,700 per square feet in 2022 compared with the previous year. “We believe that housing prices will continue to grow in single digits during 2023 as demand continues to be strong. The input cost has eased a little bit, especially steel prices, but rates of other materials are still high,” Wadhawan said. The new supply is largely coming from trusted developers as demand is getting consolidated towards such builders to avoid risks.

Brookfield India REIT leases 3.3 lakh sq ft office space in December quarter

Brookfield India Real Estate Trust has leased over 3.32 lakh sq ft office space during the quarter ended December, taking its total leasing for the financial for the first three quarters to 9.49 lakh sq ft. The REIT has a leasing pipeline of 2.2 million sq ft including 0.9 million sq ft of new leasing prospects and expected renewals of 1.3 million sq ft in 2023-24.

WeWork India leases K Raheja Corp’s entire 1-lakh-sq-ft office building in Pune

Coworking major WeWork India has started a new centre in Pune with 1,500 desks and 96,000 square feet area amid rising demand for flexible office space from corporates. The new facility is located at Raheja Woods IT Tower developed by K Raheja Corp.This is an asset-light deal, and the company has leased the entire building comprising five floors in this Kalyani Nagar property, spread across a deskspace of 1,500. This is the company’s third facility in Pune.

Pune has offered quality real estate over the years, leading to its emergence as one of the strongest and ideal cities for companies to set up their offices. Spaces such as WeWork India allow companies to plug-and-play within their budget instead of wrestling with office layouts and fit-outs. The company would continue expanding its footprint further. WeWork India has a portfolio of over 6.5 million square feet area across 44 locations in Delhi-NCR, Mumbai, Bengaluru, Pune and Hyderabad. The company’s client portfolio comprises 70 per cent enterprises, while 30 per cent includes startups, freelancers, and SMEs. In 2017, WeWork Global partnered with Bengaluru-based real estate firm Embassy Group to enter the Indian market.

WeWork India had in December raised Rs.550 crore from funds managed by BPEA Credit for future growth and acquisition opportunities. The amount will be used for future growth and potential consolidation opportunities. In 2020, WeWork India raised Rs.750 crore from WeWork Global. WeWork Global has around 27 per cent stake in WeWork India. WeWork India CEO Karan Virwani had earlier said, “Our revenue for this calendar year is estimated to grow to about Rs.1,300 crore. The revenue was Rs.760 crore in 2021”.

The company is not only EBITDA (earnings before interest, taxes, depreciation, and amortisation) positive but also generating free cash flow to expand the business and sustain the growth momentum, he said. On the expansion, Virwani had said the portfolio would reach 6.5 million square feet by March and 8 million square feet by December 2023. Realty consultant Vestian in its recent report mentioned that ‘flexible workspace’ or ‘flexible space’ is a term used to cover a broad category of shared office space options that include co-working space centres, private offices, hot desks, executive suites, serviced centres, and managed offices. Co-working centres are at the most flexible end of the spectrum, while managed offices would be at the less flexible end, it said.

Orders, execution momentum may remain strong till FY24: L&T CFO

Engineering major Larsen & Toubro Ltd is optimistic about order inflow and execution, given the momentum so far in 2022-23 and the capex-heavy budget announced by the government.

Chief Financial Officer R Shankar Raman said that the momentum may continue till 2023-24, if no major disruption happens, the alarming layoffs in the information technology sector are a result of the transition taking place in businesses post-pandemic. And while there is an opportunity for core sector companies to attract talent, companies would have to make efforts to train and engage with people to draw them to the infrastructure sector — which requires complex on-site work, Raman added.

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