“UAE investors” seek “exposure in India real-estate” | by: Cleofe Maceda | Gulf News

” Property funds generate growing interest from affluent clients in a market with growth potential “…

Investors from the UAE are increasingly looking to put their money in India’s real estate in view of the country’s positive environment and long-term growth potential, a financial services company told Gulf News.

ASK Group, which earlier launched funds that are focused on residential real estate in India, has received encouraging response and is bullish to attract a large interest from investors, especially high networth clients, in the UAE.

The company focuses on institutional investments, such as fund of funds, sovereign funds, endowment funds and family offices, which are advisory firms that serve affluent households. It currently seeks to raise $200 million (Dh735 million) offshore fund to be able to invest in housing developments in India…

“Family offices currently are more proactive in participating in India growth story and we hope the process of institutional investors has begun. [We’ve] got encouraging response from family offices and could able to close more than 50 % of the fund from UAE currently,” said Managing Director and CEO of ASK Group.

Rohokale said both non-resident Indians and citizens in the UAE, including institutions and ultra high-net worth residents, are looking for diversification and are actively seeking India’s real estate as a “de-risking strategy”.

He said the introduction of Real Estate Investment Trusts (REITs) in India and regulations such as the Land Acquisition Bill and Real Estate Regulatory Bill, coupled with a stable currency and “ healthy macro-financial numbers”, have helped renewed investor confidence…!!

“ Of late, we have seen many [Indian] developers coming to Dubai, setting up their offices and doing road shows to which investors have reacted positively because of currency gains. The property prices in India have bottomed out and in the past, many investors have made money in Indian real estate and hence are more comfortable,” Rohokale added.

ASK Group is a diversified financial services company that has been operating in India for over 30 years. Its asset management business covers equity, private equity and real estate private equity. The company considers UAE as a “very strategic market”…

Investors from the UAE are not just focused on real estate funds. Private wealth is spread across a wide range of vehicles, including mutual funds, traditional savings and long-term investment plans, among others.

A new survey commissioned by Standard Life suggested that investment flows from the UAE are likely to increase, with two thirds of NRIs saying they are optimistic that India will be more investor-friendly after the general elections…

In its report on private equity (PE) investments in real estate, it said the healthy increase was due to increasing investments in leased office assets by both foreign and domestic funds, given the potential for stable yields and attractive capital values.

Residential assets also witnessed stable investments as developers are increasingly using private equity funds to raise capital. Despite stagnant sales, the high coupon rates offered by developers is attracting capital. Fund houses have tried to mitigate some of these risks by investing through structured mezzanine deals guaranteeing fixed returns.

Executive Managing Director South Asia, Cushman & Wakefield, in a statement said, “A number of funds have committed funds towards investment in Indian real estate. This is expected to translate into increasing transactions in the sector, especially in income-yielding assets. With expected growth in capital requirements, we see a number of fund houses raising additional capital to invest in the sector.”

He said, “Investments in real estate by domestic companies have witnessed a significant increase during the first quarter of the year. This was due to companies acquiring land and office assets required to execute growth strategies ahead of the anticipated recovery of the economy in the second half of the year.”

The office and residential segments recorded Rs1,435 crore and Rs1,065 crore investments respectively; contributing close to 51% and 38 % respectively to the total private equity investments in the real estate sector in India during the quarter.

One transaction in the retail segment in Bangalore was worth Rs300 crore. Investor interest in the commercial office sector has been steadily increasing, with investments doubling in Q1 2014 from the first quarter of 2013 (Rs700 crore).

Healthy valuation of commercial developments, stable yields and the potential for rising capital values has led to investors actively evaluating and investing in prime office assets across the top cities.

The total number of deals in the first quarter of 2014 was recorded at 18, one deal lower than the previous quarter, thus indicating an increase in average deal size by nearly 35 % to Rs.156 crore.

Bangalore topped with investments of Rs1,905 crore, an increase of 45 % compared to the previous quarter. The transaction volume in Mumbai was up 22 %  over the previous quarter at Rs470 crore. NCR and Pune registered investments of Rs345 crore and Rs80 crore respectively…

“Time For Retailers To Re-Evaluate” their Store Footprint : “One Size Does Not Fit All” | by: Laura Pomerantz | Forbes

“As digitally savvy shoppers continue to drive today’s retail environment, companies are being forced to strategically re-think their store footprint to be more relevant with these consumers”…

Increasingly, these important decisions have been moved into the boardroom, as real estate can be the most critical factor in a retailer’s operating and growth strategy and a key driver in unlocking value…Investors are demanding that retailers reassess their real estate to maximize their space, and we’re finding that as they do so, there is no longer a one size fits all model..

While in the past, a retailer’s needs might have consistently been a 1,500 square foot store in an “A” mall, today, there is a lot more to consider. Every retailer needs to address their real estate strategy in each of the markets they serve, and identify the right size space that makes sense for their business. This means smaller spaces for some, and larger spaces for others.

We’ve seen big box retailers like Best Buy and Staples move to smaller spaces to better serve the digitally savvy consumer, while others, such as leading men’s big and tall apparel retailer Destination XL, is catering to its customer with larger format stores to showcase its premium brand merchandise in wider aisles, with larger fitting rooms, sofas, chairs and flat-screen televisions.

Photo courtesy of: Pioneer Press Best Buy Mobile store in Mall of America -- Best Buy will continue to emphasize e-commerce and smaller stores to reshape its future

Further, as demand for  Michael Kors  products continues to grow, it is capitalizing on its strong opportunities with aggressive expansion in the  U.S., as well as in Europe and China. Having successfully expanded beyond apparel into handbags, small leather goods, eyewear, jewelry, watches, and footwear, the renowned global lifestyle brand has been moving to larger store formats to accommodate its growing number of product categories. Constantly delivering new innovation to its customers, the brand continues to grow its global footprint.

Conversely, some retailers are redesigning their stores to occupy a smaller footprint in order to greater utilize their space. Contemporary apparel retailer Scoop, for example, has begun moving to smaller spaces to provide a more exclusive experience for its customers. With less duplicative product, and a more intimate environment, Scoop is enhancing its customer shopping experience, while lowering overhead cost and increasing sales.

We are also seeing companies re-think their footprint, as they expand with new retail concepts. In an effort to reach different segments of the population, J. Crew is speculated to be developing a new store format aimed at budget-conscious shoppers, according to a recent Wall Street Journal article. If so, you can expect the retailer will look for appropriate locations, markets, and store sizes to attract this target customer.

So how should retailers evaluate their square footage ?

There are a number of factors to consider when assessing a retailer’s footprint, and each neighborhood needs to be addressed individually.  Importantly, a retailer will want to know the market potential in the given area. What is the population threshold, and could this location present further opportunities?  A retailer will also want to seek out any competition and determine if there is already over-saturation in its market niche or if it is strong enough to carry another retailer in that space. Further, who are the co-tenancies? Is the retailer’s customer already there? After a thorough evaluation, a retailer can appropriately determine its ideal square footage.

As retailers remain committed to driving shoppers back into the store, they have a lot to consider in terms of re-thinking their store footprint to align with today’s sophisticated consumers…!! 

At the same time, rental costs have risen dramatically in the last few years as new developments have slowed, which is forcing retailers to refocus their real estate strategies to maximize square footage and sales.

While this is driving some retailers to reduce their number of stores and relocate to smaller spaces, it is driving others to increase square footage and open additional stores. Clearly, there is not a one-size fits all approach.

Retailers need to develop the optimal strategies in the appropriate markets, location and space that make sense for their business..