Goldman forms $300m realty JV with Nitesh Estates

Wall-street leader Goldman Sachs is expected to invest $300 million (Rs 1,850 crore) in a proposed joint venture company promoted by listed property developer Nitesh Estates. The proposed JV will own and operate commercial real estate assets in India, people directly aware of the matter said.

As per reports, Goldman will hold 74% whereas Nitesh Estates will have 26% in the proposed entity which has plans to acquire rent-yielding office parks, shopping malls and luxury hotels, sources added. The impending deal is a proprietary investment from the Goldman Sachs balance sheet which has assets estimated at over $900 billion.

Meanwhile, with the proposed investment Goldman Sachs joins the list of marquee global investors like Blackstone, Brookfield Asset Management, Qatar Investment Authority and GIC of Singapore which have been buying into India's over 400-million-sqft commercial real estate market over the last few years.

Indian economy, dominated by service sector has opened a stable market for income-generating commercial real estate, giving investors a chance to list these assets through real estate investment trusts (REITs). These trusts are listed entities holding income-generating real estate assets from which earnings are distributed to shareholders.

SEBI recently came out with REIT guidelines last year to help real estate and infrastructure developers list their rent-yielding assets, and providing large and small stock market investors with an inflation-indexed product.

Goldman Sachs with the first-generation entrepreneurial company Nitesh Estates, will create a platform of assets worth almost $1 billion in the next few years. The still unnamed JV, on which a battery of top lawyers are completing due diligence, is expected to employ leverage financing of up to three times the equity commitment to go on a shopping spree.

The recent Union Budget provided some tax clarity on REITs even though certain structuring challenges still remain. Four Indian developers - Embassy Office Parks (Blackstone), K Raheja Corp, RMZ Offices (Qatar Investment Authority) and Prestige Group - are readying to list their assets, which could translate into at least a $20-billion REIT market in the next few years.

With such market potential, India would compete with or even surpass the Mexico's REIT market, often cited as a successful new world experiment, launched three years ago and with a current market value exceeding $18 billion. New York, London and Singapore have hogged the limelight in developed market.

Brookfield Asset Management, with real estate and infra assets worth over $200 billion globally, struck the single largest deal when it acquired the office parks of Unitech for $1 billion - $400 million in equity and $600 million in debt. Private equity giant Blackstone Group, too, struck office park acquisitions worth more than $1 billion in recent years in India.

Blackstone-supported Embassy Office Parks and Brookfield India, with 21 million sqft and 17 million sqft portfolios, are among the top five office landlords in the country. DLF tops the list with around 30 million sqft.

Though foreign investors have mostly invested in office buildings, that too specifically in 125-million-sqft IT SEZs until now, they are turning to the country's hotels and shopping malls which have remained undervalued or, in some cases, distressed assets for a while.

Govt to Rope in Major Developers to Promote Green Housing in India

With a view to reduce carbon emissions, the government will soon rope in major real estate developers for voluntary adoption of a set of new guidelines on building low energy consuming green housing complexes. The move is part of the government’s national action plan on climate change.

The ministry of new and renewable energy (MNRE) has asked an expert agency set up by it in partnership with The Energy & Resources Institute (Teri) to evolve a set of guidelines on how to build large housing complexes in the most environment friendly and energy efficient way. The new guidelines would include requirements such as meeting about 5% of the energy requirements through renewable sources.

While development of townships is the mandate of the ministry of urban development and partly, the housing ministry and urban poverty alleviation, the proposed green rating for housing complexes is an initiative of MNRE because it is an extension of the projects it is already doing. Officials from other ministries are part of a technical panel of MNRE dealing with green infrastructure for large development. The expert agency—the

Association for Development and Research of Sustainable Habitats or ADARSH—which now gives green ratings for individual buildings, will evolve the new norms for large residential complexes. ‘‘The rating called Griha would be voluntary for builders in the initial few years, after which it could be made compulsory,’’ the rating agency’s CEO Siva Kishan told FE.

The idea is to rope in top five real estate developers to voluntarily adopt the guidelines, which would then set the benchmark for others. The rating agency is now in talks with various developers and the first partnership with a real estate developer may be announced soon, he said. The rating agency is also talking to various state governments for giving incentives to developers to adopt the new norms that would reduce energy consumption and the impact of construction on ground water levels and the environment.

Shiva Kishan said the Maharashtra government is open to reducing property tax for green buildings as an incentive, while some other states are open to let builders construct more floors if they follow green building norms. This would allow them to recoup the rating fee as well as the extra initial cost of environment-friendly construction. The ministry now allows some incentives for individual buildings to get green rated. These include reimbursement of 90% of the rating fee and rewards for the architect.

CREDAI Organises Conference on Formulation of Banking Strategy for Real Estate

CREDAI NCR, the Delhi-NCR chapter of the Confederation of Real Estate Developers’ Associations of India (CREDAI), the apex body of real estate in India, organised a conference on Formulation of Banking Strategy & the Economic Outlook for Real Estate for 2010-11 here.

The Summit covered a wide range of topics of interest to the stakeholders in the industry, providing a huge networking opportunity as well as a knowledge sharing platform for the participants to discuss and deliberate on the issues being faced by the sector and the way ahead for the same.

The conference takes place at a time when realty sector is improving, and growth in real estate is aligned to the economic growth of the country, wherein real estate is a vital contributor as residential housing alone contributes over 5% to the country’s GDP at this time. Financing is an integral part of the real estate industry and hence it is imperative that the developers and the finance institutions work closely and in mutual aid to help sustain and develop the growth trajectory of the sector. A constructive dialogue and collaborative strategies between banks and real estate developers have the potential to transform the real estate sector today and build a momentum that can benefit the economy as a whole.

Project financing is one of the critical issues in real estate today, where much needs to be done to ensure smoother operations and growth. Hence, project financing, both in residential as well as commercial realty, requires immediate attention and the conference focussed on the matter in order to arrive at workable solutions in the area.

Issues such as the difficulties in financing for projects as faced by mid and small level developers; the procedural complexities involving legal requirements, low growth rate of real estate loans in recent times; credit crunch faced by the sector heightened by the anti-inflationary measures taken by the RBI; problems faced in risk assessment of projects; and others were discussed in detail as industry stalwarts and experts in the domain shared their views and suggestions on them.

The conference aimed at providing an opportunity to understand the economic outlook and the real estate scenario in the coming year. At the same time, it sought to conceptualize a banking strategy that can address the needs of the real estate sector. Also, developing solutions so as to help generate smoother funds flow in the sector, by addressing the concern areas of both the lenders and the borrowers – i.e. the developers and the finance institutions. The conference also provided an insight to the developers and the bankers to build their portfolio strategies for the year ahead.

Mr. Santosh Rungta, President – CREDAI, said, “With the outlook on the Indian economy and the realty sector improving, it’s a good time to develop a new strategy to look at project financing for real estate in India in both the residential and commercial scenarios. We are hopeful that this initiative will be able to open new avenues for us in the area of project financing and guide us towards effective solutions for the benefit of both the bankers and the developers, eventually aiding the augmentation of the sector as a whole.”

Mr. Pradeep Jain, President – CREDAI NCR, commented, “It is essential that the developers and the financing institutions work in mutual cooperation and understand the issues and complexities involved in the processes from each other’s perspective. We took this initiative in order to facilitate comprehensive and transparent communication amongst the stakeholders so as to help develop effective solutions which would benefit all the parties involved and at the same time ensure sustainable growth and development for the industry.”

The conference witnessed participation from eminent industry stalwarts like S S Kohli, CMD - India Infrastructure Finance Company Limited; Dr. J D Agarwal, Chairman & Director - Indian Institute of Finance; Sandeep Kotak, Executive Vice President, Kotak Mahindra Bank Limited; Punit Malik, Managing Director - Yes Bank; Renu Karnad, Joint Managing Director - HDFC; Deepak Chawla, Advisor Markets - Financial Advisory Services, Ernst & Young; Shanti Ekambaram, Director - Kotak Mahindra Capital; Sunil Rohokale, Executive Director - ASK Investment Holdings Private Ltd. and Rajiv Sabharwal, Senior General Manager - ICICI Bank, among others.

Delhi to have Real Estate Regulator by Year-End

Delhi will have real estate regulator by this year-end, Urban Development Minister S. Jaipal Reddy said Thursday. He also said the government was talking to other states to have similar regulators. “The state governments have sounded positive. It would take time to happen. But Delhi will get a regulatory authority for the real estate by this year,” Reddy told.

He said the legislation process for the real estate regulator for Delhi would soon be completed as the draft bill has been circulated to the stakeholders.

According to him, the regulator once in place would prevent real estate players from indulging in unnecessary profiteering.

The minister also said the Metro rail will stretch to 190 km in the national capital region by the time the Commonwealth Games start here October 3.

Six degrees of separation: Find out how the Sales 2.0 leader can help

The biggest challenge that I often come across is “how do I find the right people to speak to at a company, who can help?” I’ve tried everything possible viz. going through LinkedIn, Jigsaw, scouring multiple local data providers, company websites, etc. The one common thing across all these is the immensity of data that I’m faced with. Once I have the right data, I then need to organize it together and start looking for some sort of connection to these people. It used to take me anything between 1-2 days to gather my data set, and then start calling people.

InsideView is one source where I can get everything I need at one place. Its smart search abilities allow me to narrow down my companies based on specific criteria, track companies, and the best part is it tells me the people I’m connected to at my target accounts.

We’ve all seen the overflow of data across multiple social and professional networks. It’s not difficult anymore to find people, but it’s still a mammoth task to find out a good connection to those people. InsideView’s Smart Connections help you uncover relationships that you didn’t know existed. It’s a simple three-step process:

1. Put in your list of existing clients (reference customers)
2. Put in your previous employments
3. Search for and open any company record in InsideView
4. Voila!

Your connections are right there on the first page. Want to go down deep and find out more detailed level of connections? Just click through the people that it shows you’re connected to. Want even more? you’ve got it. InsideView partners with some of the most popular social and professional networks to bring together everything you need. You can look up people you’re connected to through your LinkedIn and Facebook profiles, all while staying within your InsideView or your CRM pages. The best part of it all is that none of your personal data gets displayed to anyone else, yet allows you to optimize your resources, while respecting everyone’s privacy.

Everyone wants something more, something’s always missing in everything. I can’t deny that there may be a situation when despite everything, you still can’t find that one guy. Just because you can’t, doesn’t mean your BOD, or your colleagues can’t either. InsideView will not only help you uncover direct relationships, but also the ones that your other team members or your senior leadership can generate for you. InsideView maximizes its immense database and smart technology to connect the dots between your colleagues, senior management, and shows you the people you can use as a reference point.

Gone are the days of granddaddy methods of selling. InsideView has ushered in a whole new era of Sales Intelligence, Sales 2.0. InsideView has long been doing breakthrough work by integrating cutting edge technology, artificial intelligence, user entered content, and managed to bring it all together in a logical and actionable manner. Sign in to your InsideView account today, and start connecting.

Check out this related Post too: http://blog.insideview.com/2010/04/27/connecting-the-dots-how-sales-2-0-can-help-you-connect-with-prospects/