Bangalore International Airport
TO CATER TO 6.7 MILLION PEOPLE AFTER PHASE 1
(40 MILLION IN ALL)

Work began at the international airport site—located 35 km outside Bangalore, in Devanahalli—in July 2005. A skeletal steel structure is already up. The project is among the first public-private partnerships in India and a Greenfield airport. In its first phase the airport will cater to over 6.7 million passengers per year, create 1,000 jobs per million passengers and have a cargo capacity of 1.4 lakh tonnes per year. Apart from regular services, the airport promises travellers a hotel, shopping mall, tax-free shops, food courts and other amenities.

In the first phase, a 4-km runway, aircraft stands, a terminal building, technical buildings and other airside and landside facilities are being constructed. A consortium consisting of Siemens, Zurich Airport and Larsen and Toubro has undertaken the project. Bangalore International Airport Ltd (BIAL) is the owner and operator. With the target launch date being April 2008, work is on for 14-16 hours a day and is, till now, on schedule.

Once the new airport at Devanahalli is ready, all international and domestic airlines will operate from there. The Hindustan Aeronautics Ltd and the Indian Air Force will use the present HAL airport.

                                                                   — Posted online, 26 Jan

Bangalore's commercial property business
holds pride of place in world charts

In a survey by London-listed international real estate consultancy firm DTZ, the IT city of India has been ranked No. 3 among global cities for office space absorbed in 2005. A record 9.28 million sft of Grade A leasehold office space was absorbed in Bangalore last year, marginally behind London, where the net absorption was 9.96 million sft. Tokyo tops the list with annual net absorption of 12.33 million sft.
In a measure of India's rapidly growing appeal as an IT/BPO destination, two other Indian cities found themselves in the top 20 rankings. Chennai is ranked sixth with net absorption of 3.76 million sft, and Delhi is ranked 11th with 2.36 million sft. Shanghai, New York City, Dallas, San Francisco Bay Area, Los Angeles and Frankfurt are the others in the top 10.

Bangalore witnessed a 22 percent jump in space absorbed in 2005, against the 7.6 million sft absorbed in 2004.

"The continued demand for space from the IT/IT-enabled services and BPO sectors is the main driver behind this dramatic increase in absorption in Bangalore," said DTZ India Managing Director, Ankur Srivastava. He said the financial services sector and engineering companies were also expanding and taking up a substantial portion of office space.

Notable transactions over the last year in Bangalore include those of Cisco, Apple, i-flex, IBM, Cognizant, Juniper, AOL, Cadence Design Systems, Accenture, Samsung, Caterpillar and SAP.

And no slip-up is expected this year, despite Bangalore's infrastructure concerns. The demand for space in Bangalore is far more than any other city. Bangalore's talent and cosmopolitan culture is a huge attraction.

                                                           — The Times of India, 24 Jan

EGoM on Bangalore Metro formed

An Empowered Group of Ministers (EGoM) has been constituted by the United Progressive Alliance to expedite a mass transport system for Bangalore and other mega cities. The EGoM has been asked to decide who should run the metro and whether the system will employ the standard gauge or the broad gauge.
The government has allocated Rs 75 crore for land acquisition. While the cost of the project is seen to be rapidly increasing, the green signal has been given for:

• 621 private properties to be marked.
• Compensation to be worked out.
• Land belonging to Nuclear Corp, HAL, BHEL, Silk Board, NGEF and railways to be acquired.
• A committee to be formed to aid the land acquisition process.
  
                                  — Compiled from various news reports
  

Real Estate market:
Excellent 2005, promising 2006

The year gone by has been an excellent one for the real estate fraternity. The increased demand and strengthening of prices seen in the last two quarters of 2004 has further accelerated throughout 2005. It is pertinent to note that this trend, unlike in the past, has been sustained primarily because of the strong fundamentals i.e., genuine buyers, positive outlook in the economy both nationally and locally, besides the regular factors such as affordability and easy access to finance, etc.

Model apartment at Brigade Gateway

Residential: There has been an increase in apartment prices and land values, with select suburban land cost having appreciated 100 per cent in capital values. Demand has been seen across all budgets. Stocks released into the market have been largely absorbed in the initial offer period with premiums emerging shortly thereafter, inducing some element of investor participation from the salaried class in the initial offering. Land parcels in central areas available for development have reduced considerably and therefore, the supply side in the prime residential areas has been severely constrained.

Conference room at the Brigade Gateway project office

Commercial: It is important to remember that the job creation in the city has resulted in nearly 9 million sft of space being committed by corporate occupiers this year.

Indications are that 2006 will be equally good for the corporate real estate market. The Central Business District has limited supply and rates have strengthened sharply. In suburban areas where the bulk of the absorption of space has taken place, rental rates have been stable with a steady growth. This has facilitated consolidation and has also provided comfort that further expansion will be possible at reasonable rates.

Not software, it's real estate boom time

PricewaterhouseCoopers recently estimated that as much as $8 billion of private equity will flow into Indian real estate funds over the next 18 to 30 months. Real estate funds are still a novelty in the country but investors are flocking to them since the securities regulator allowed them in April 2004.
In the past few years, software and call-center companies have underpinned demand for commercial property in India. Technology services account for as much as 85% of India's office space demand. An under-supplied market means that the net yield on office property in India is among the highest in Asia. Add to that a 20% to 40% price appreciation in the past 15 months, and office space in Mumbai, New Delhi and Bangalore looks like a very attractive asset.

		By 2010, technology-related work that will get "off-shored" from developed countries to India may jump more than fourfold to $60 billion. As hypermarkets and shopping malls jostle for a slice of the country's non-residential property stock, office space will get scarcer and dearer.

The Indian property market may get a further boost when the regulator allows real estate investment trusts, or REITs. A committee set up by the Securities and Exchange Board of India has recommended that REITs be allowed to be set up as mutual funds.
The HDFC India Real Estate Fund, which in July gave local investors their first chance to own multiple properties with a single investment, was open to individuals with at least 50 million rupees, or approximately $1.1 million, to spare. The seven-year, close-ended fund, jointly offered by Housing Development Finance and State Bank of India, will allocate 45% of its $230 million kitty to office space for technology companies, which will require 66 million square feet in the next five years.

GE Commercial Finance Real Estate announced a $63 million investment in a private-equity fund sponsored by the Singapore-based developer Ascendas. The fund will develop office space worth $500 million for computer software and back-office companies across India.

In February last year, the government significantly relaxed investment norms for overseas developers. For REITs to work in India, stamp duties must be aligned and brought down to 1% or so from 5% to 15%.

For investors who can afford to provide a larger chunk of capital and leave it locked in for seven years, the field is already wide open.

• Loan amounts that can be availed depend on the housing finance institution
• Loan amount limit depends on the income of the applicant
• Security of the loan is the first mortgage of the property to be financed
• Loans can be availed from leading financial institutions
• Interest rates and EMIs are subject to change without notice, check with the financial institutions for prevailing interest rates
• Calculations are based on loan amount of Rs 10 lakh onwards