Overall “Mall vacancy in India”,maintains status-quo at 14.5% | Realty Plus

According to Cushman & Wakefield’s latest Retail reports, the overall #MallVacancy, levels across the top eight India cities remained stagnant at 14.47% in Q2 2014, which was recorded around 0.4 percentage points lower compared to Q1 2014…Amongst the top eight cities, Pune witnessed sharpest decline of 2.5 percentage points due to healthy leasing activity and no new mall supply. Ahmedabad, Chennai and Bengaluru also recorded drops of 0.4 percentage point each due to moderate demand for quality mall spaces from apparels and food and beverages (#F&B) retailers…Hyderabad witnessed a rise of 1.1%, in mall vacancy in the same period.

Q2 2014 saw the addition of 370,000 sq ft of new mall space, which was similar to that received in the previous quarter. The supply comprised of 250,000 sq ft in one mall in NCR and the residual 120,000 sq ft in an operational mall in Kolkata. As many as six new malls planned for Q2 2014 witnessed the deferment to the second half of the year, which together accounted for 2.33 million square feet (msf)…

While three malls measuring 700,000 sf in total were delayed in Bengaluru due to approval delays, slower construction pace in tandem with low leasing led to deferment of one mall each in NCR, Pune and Hyderabad, measuring 700,000 sf, 430,000 sf and 500,000 sf respectively.

Sanjay Dutt, Executive Managing Director, South Asia Cushman & Wakefield, said, “The retail and retail real estate markets are still going through a period of uncertainty. Currently, we are witnessing stagnation in the demand-supply dynamics as mall supply is being deferred and existing vacancies remain more or less stable. Whilst everyone is aware of the huge potential that exists for organised retail in India and domestic and international retailers are keen to expand their presence in the country, they are awaiting the conducive conditions to do so. The real estate sector has been maturing to provide better quality spaces and adopting best practices to cater to retailers needs. However, macroeconomic conditions and not just the sentiments need to improve further to encourage consumer spending and the government needs to address the uncertainty that exists with respect to its policy stand on FDI in retail. The RIET’s for commercial properties post successful listings, would potentially open up for shopping center portfolio listings, giving much needed exit route to the developers & investors. This would encourage shopping centre developers to create much needed quality organized retail space at locations that matter. The overall infrastructure to support retail trade such as transportation and logistics too need to improve substantially for the sector to kick in to its next phase of growth.”

According to C&W, mall rentals remained stable across most cities except Bengaluru, Chennai, Mumbai and Pune where a few micro markets depicted rental variations. In Bengaluru, the sharpest rental decline of 13% was noticed in Mysore Road where lower trade densities impacted rentals adversely. Similarly, Cunningham Road in Bengaluru also witnessed lower demand leading to a 10% dip in rentals. On the other hand, Goregaon in Mumbai witnessed a 10% increase in mall rentals due to healthy demand from retailers. In Pune, Hadapsar also witnessed a positive trend in leasing leading to a 9% uptick in mall rentals. In Chennai, almost all mall micro markets witnessed a rental decline from the last quarter due to weakening demand. The sharpest rental dip of 9% came in Chennai-Western where lack of new mall supply hampered retailer demand for this location. Mall rentals in Hyderabad, Ahmedabad and Kolkata remained stable.

In Pune, JM Road witnessed the highest rental appreciation of 9% due to high demand from fashion and lifestyle retailers. Vashi in Mumbai also witnessed similar rental appreciation due to high interest from apparels and F&B retailers. In Chennai, lack of optimum sized retail spaces led to a 7% decline in main street rentals. Anna Nagar 2nd Avenue in Chennai also witnessed a 7% dip in rentals from last quarter as ongoing infrastructure projects curtailed footfalls. All main streets in NCR, Ahmedabad, Hyderabad and Kolkata recorded stable rentals during this quarter. Vittal Mallaya Road in Bengaluru witnessed a 4% rental drop in wake of dearth of optimum-sized retail spaces and already high rentals commanded by this established main street.

During H1 2014, Bengaluru witnessed no new mall supply; this was primarily owing to the delay in approvals, which led to the deferment of upcoming supply. Meanwhile, the city mall vacancy level registered a dip of 0.4 percentage point and was noted at 7.1% towards the end of Q2 2014 due to the absence of new mall supply and moderate demand from apparels, F&B, footwear and electronics retailers. Although most locations in main streets and mall micro markets recorded stable rental trend this quarter, select main streets and mall micro-markets registered a drop in rentals. Whilst Cunningham Road and Mysore Road mall micro markets witnessed a decline of 10-13% in rentals in the wake of weak trading activity; Bannerghatta Road mall micro market recorded a drop of 3% in order to keep rentals competitive and attract newer brands. Main streets of Brigade Road and Vittal Mallya Road observed a drop of 3-4% in rentals due to limited availability of options with optimum sized floor plates. Going forward, Cunningham Road and Mysore Road mall micro markets may experience further downward pressure on rentals. On the other hand, established main streets such as Indiranagar 100 Feet Road, New BEL Road, Kamanahalli Road and Koramangala 80 Feet Road may witness an upward rental bias owing to healthy enquiries from apparels, F&B, electronics and jewelry brands.

In H1 2014, Chennai did not witness any new shopping malls becoming operational and this led to a marginal decline of 0.4 percentage points in vacancy, which was recorded at 5.9% at the end of this quarter. Cautious sentiments and limited transactions led to a dip in mall rentals across all micro markets. Chennai-Western saw the sharpest decline with a 9% drop owing to the ongoing infrastructure projects, which curtailed footfalls and demand. Amongst main streets, strong demand from jewelry retailers for Usman Road- North and Usman Road- South led to a 4% rental appreciation for these locations. However, no availability of optimum sized floor plates in Cathedral Road-R.K. Salai led to a 7% rental dip for this micro market. Enquiries from jewelry retailers for select main streets near CBD remain high but Anna Nagar-2nd Avenue may witness a negative rental bias due to lack of demand caused by the ongoing metro work. Paucity of quality mall space and low demand may lead to stagnant vacancy levels and rental decline across most micro markets.

The mall stock in Hyderabad remained stable in Q2 2014, with 500,000 sf mall space deferred to the next quarter. Q2 2014 witnessed a rise in vacancy by 1.1 percentage points and was noted at 8.22%. Established main streets such as Himayathnagar, Banjara Hills, Jubilee Hills and Kukatpally witnessed an increase in demand from retailers, belonging to apparels, footwear and F&B categories. In the interim, enquiry level for electronic and apparels brands increased in peripheral locations such as Attapur and Kothapet. Whilst mall and main street rentals remained stable, next quarter the city is likely to witness infusion of 500,000 sf of mall space in Kukatpally micro market, which will put a downward pressure on the rentals.

Kolkata witnessed 120,000 sf of mall supply during the first half of 2014 and the overall city mall vacancy increased marginally by 0.07 percentage points. Limited transactions and moderate demand for retail space was recorded. Owing to lack of availability of quality retail space on main streets, malls witnessed more demand compared to main streets. Central and East locations continued to see majority of the leasing activity in both malls and main streets owing to churn and ready catchment. The first half of 2014 witnessed leasing activity predominantly from the apparels segment but rentals remained stable in both main streets and malls.

The first half of 2014 did not witness the opening of any new malls in Mumbai. Despite no new supply, churn in malls led to overall mall vacancies increasing marginally by 0.06 percentage points to 15.4%. During Q2, healthy demand led to mall rentals at Goregaon and Vashi appreciating 10% and 5% respectively while high vacancy levels in malls in Bhandup resulted in developers reducing rentals by 5% to attract retailers. Limited churn kept mall rentals stable in all other locations of the city. Main streets in Mumbai witnessed vibrant leasing activity with domestic and foreign retailers in the apparels and F&B segments actively expanding their presence at locations like Vashi, Lower Parel, Andheri and Linking Road. Owing to high footfall and thriving retail demand in Vashi, strong interest of retailers led to rentals appreciating by 9%. Mall rentals at select locations such as Lower Parel and Malad could appreciate due to higher demand for quality space. Main streets are also expected to witness improved leasing activity in the coming months. Increasing demand for space in main street locations such as Linking Road, Borivali and Thane could lead to increase in rental values.

Delhi-NCR witnessed one new shopping mall measuring 250,000 sf become operational with 60% occupancy levels in H1 2014. Amidst moderate interest among retailers to foray into new and emerging locations, developers continued with slow pace of construction deferring completion of malls. During Q2 2014, overall mall vacancy was recorded at 13.5%, which is 0.06 percentage points higher due to the influx of new mall space. With balanced demand supply conditions, rentals remained stable across all mall locations.

 

“Large Mixed-use Retail Schemes” are the Most-Desired Style of Projects in Indian Real-estate space | ET Retail

Malls in India and elsewhere are increasingly becoming #LifestyleDestinations, posing challenges for #MallDesigners, as they need to create retail properties that engage, are cost efficient and sustainable…From mixed-use developments to family entertainment centres (#FEC) to streets and squares–such as those in Dubai–mall designers are constantly trying to innovate with #RetailFormats…Head and director of UK-based mall design firm, spoke on the latest trends in mall design…The company has designed #ShoppingCentres, in India such as DLF Place in Saket, Delhi, Phoenix Mills in Mumbai and Pacific Mall, also in the National Capital Region(#NCR)..!! 

Going by your experience of designing malls in India and abroad, what are the latest trends internationally that define shopping complex properties today?

The latest trends which we are seeing reflect the changing Global #RetailLandscape…#Consumer Demands are shifting because of the growth of #e-commerce, and designers must now create retail developments which entice shoppers beyond shopping. Creating a retail environment that is as much about leisure, as it is about retail, is essential..

Retail environments need to be in tune with and fully embrace developing lifestyle choices. Visitors should be able to enjoy a much broader experience, rather than be limited to simply shopping alone. Benoy is seeing many more mixed-use developments, which incorporate retail alongside other elements such as residential and commercial offices. These can become iconic structures that also encourage a variety of activities in the shape of leisure offers, entertainment and dining, and which ultimately create a destination. Any great mall design should also be flexible and adaptable so that it can compete with future competition, which employ the most advanced technology.

What kind of retail format has the highest demand in India, according to you– kiosks, speciality retail formats, large size formats etc.

The larger mixed-use retail schemes are the most desired style of projects in India at the present, but there is not a prevalent style or format for retail. Our schemes illustrate a mix of unit types, creating a balanced retail offer. Moreover, because India is so large and diverse, it is hard to define one style of retail design which will be successful and attractive to all areas of the country.

Always approaches India as a continent rather than a country due to the sheer magnitude of the market…The firm understands that what works well in one city may not necessarily translate to another in terms of look, feel and scale. As a country with a wide range of people, finance and consumerism, it is imperative to understand who the regional client is. As designers, Benoy is also very mindful of the natural surroundings and the history of the city.

When it comes to controlling costs of mall construction and design, how can a mall developer cut down on the expense of designing a mall yet make it more consumer friendly?

In other parts of the world, there is a defined trend towards retail developments that are either enclosed malls with natural ventilation strategies or which are open to the environment. Both allow the developer to reduce initial capital expenditure and ongoing running costs, particularly where mechanical conditioning is concerned. Of course, these strategies are not applicable in all parts of the world, yet even in Dubai, a part of the world with an aggressive environment during its summer months, there is a new wave of ground breaking open street developments – streets and squares, if you like – that are setting new benchmarks in sustainable developments. So in parts of India with a benign climate, such strategies should have a role to play.

Also seeing an emphasis of simplification of development so that the nature of the construction is cost efficient. That is not to say that developments should be visually bland or banal, rather that the architectural solution hides an efficiency of construction.

What is the contribution of the mall developer when it comes to facilitating a mall design and construction? Do you think Indian mall developers are up to the mark in that respect ?

Is seeing a wide variety of retail developments across all parts of the Indian retail scene. Of course, like elsewhere in the world, not all projects are world class, but there is a fast developing industry which is devouring new ideas and strategies.

In this, the developer is key. Despite the importance of the statutory authorities, the developer controls the funding, design and construction streams like the conductor of an orchestra. Their role is crucial in setting the tone and direction for any project.

Which international trends that have been extremely popular can be adopted in India according to you?

India is becoming an extremely popular market for foreign companies because of the opportunities on offer…This has led to a highly competitive environment, which is fantastic for driving growth but does highlight the need to have an established brand that sets you apart from your competitors. The recent global downturn has led to developers spending more wisely and they are becoming more selective about the partners they identify as bringing the most value to developments. As designers, it is essential that we offer beautiful schemes that are commercially viable.

Internationally, the rise in dining as an important component of any development has been well documented and it is an important trend that will define the nature of Indian retail developments over the coming years. Out will go standard, run-of-the-mill food courts to be replaced by higher-quality food villages and individual restaurants – dining will be an important anchor..

What are some of the top observations on Indian shoppers according to your psychographic studies?

As an #EmergingMarket, India has the advantage of being able to look to other countries and evaluate what works well. India, therefore, has become a platform for some of the most ambitious designs currently being actioned and offers one of the most exciting retail environments…

Shopping in India is therefore no longer a requirement, rather a choice – a leisure activity – has observed that Indian shoppers take great pleasure in the social aspects of “#RetailTherapy”…Whether Indian shoppers are couples, groups of young people or families, the social aspect of shopping is important and will continue to become more important over the coming years…!!

“India Retail-Property Market” Overview | by: Vivek Kaul | ET Retail

The Retail #RealEstateMarket, in India has developed steadily over the past decade as the quality of stock improves and local developers realize the importance of Modern #ShoppingCenter Management, such as zoning, branding, marketing and promotions, as well as the all-important strategy of following a pure lease model instead of the earlier practice of divesting units to individual investors… This evolution has led to the creation of a number of high quality shopping mall developments in the major cities of Delhi, Mumbai and Bangalore which have set the benchmark for future retail schemes..

The adoption of rental models (such as revenue-sharing) has provided support to retailers in India seeking to establish themselves in the market, and has also enabled shopping mall developers to attract international and domestic retailers to set up flagship stores…!! 

Retail Real Estate Supply: 20072014 (P) : CBRE Research

In the run-up to the global financial crisis of 2008, around 300 new shopping centers were scheduled to be completed in key cities across India. This pipeline was decimated by the credit crunch, however, leading to a shortage of modern retail estate stock. In 2011, the development pipeline sprung back to life as construction work resumed on a number of projects. At the end of 2013, the supply of modern retail space across the country’s seven largest cities stood at about 54 million sq. ft. Around 70% of this space was in New Delhi, Mumbai and Bangalore…

Leading cities including New Delhi, Mumbai, Bangalore, Pune, Chennai, Hyderabad and Kolkata have all seen a steady rise in retailer enquiries in recent years. Shopping mall rents in prime sub-markets of New Delhi have witnessed growth, while values in high streets have increased in Mumbai, Bangalore and Pune. Transaction activity as well as sizes are expected to increase on the back of an increase in consumer spending and expanding mid-income purchasing power. In Mumbai, premium international brands continue to focus on affluent southern parts of the city; but the lack of quality retail space remains a major challenge to growth. Despite the scarcity of quality supply, most retail chains continue to launch their first Indian store in Mumbai and New Delhi usually in a street shop or mall before expanding elsewhere. Even as domestic big box retailers gradually expand to tier II locations, the major foreign brands remain primarily focused on tier I cities.

New supply is steadily coming on stream in the NCR, and will provide opportunities for retailers to operate in an organized retail environment. High street formats continue to dominate the retail landscape, while most luxury retailers prefer to operate from five star hotels and premium malls. Bangalore has a large quantum of organized retail supply in the pipeline which will provide retailers with further opportunities for expansion..

Amongst #RetailCategories, international #F&B outlets have continued to expand in 2013 both at the fast food and fine dining ends of the market. Luxury retailers remain focused on tier I locations but continue to refine their strategy and product offering for the Indian market, which in selected cases has seen them consolidate and reduce the size of some stores. Fashion and apparel remains a high growth sector and major apparel brands from the US and Europe continue to seek opportunities to enter or expand in major markets across the country, including certain tier II locations…

Lack of Quality Retail Real Estate Impedes Market Entry by Global Retail Giants:

There is approximately 54 million sq. ft. of retail stock in India spread across leading metropolitan cities and their surrounding regions. Even after the steady growth in supply of organized retail space over the past ten years, however, retailers of the size of Ikea often find it challenging to secure space in a prime mall in any of these cities. This is essentially because the majority of retail space developed in India to date lags behind global standards, and does not provide the quality, ambience, design, services or post-construction maintenance that global retailers are accustomed to. This is one reason why out of the more than 300 malls in the country, only a handful can be described as successful retail projects. These include Select CityWalk, DLF Emporio and DLF Promenade in South Delhi, Ambience Mall in Gurgaon, Inorbit and High Street Phoenix in Mumbai, and Forum in Bangalore. The total size of these successful malls is just 45 million sq. ft. About 31% of the upcoming supply addition is expected to be centered in smaller cities such as Pune, Chennai, Hyderabad and Kolkata over 2014, with approximately 1011 million sq. ft. of organized retail supply lined up across leading cities..

According to research estimates, India will require an annual supply of about 20 million sq. ft. of organized retail space in order to sustain growth in the sector. This will necessitate a concerted effort from developers to construct successful shopping centers to global standards. However, domestic developers are still in the middle of a steep learning curve with respect to undertaking shopping center development. Many developers view shopping centers simply as another asset class, no different from building offices or housing units. In fact, shopping centers have an organic and perpetually changing quality that needs to be planned, developed, owned and managed as a single property..

It is in this context that the role of global #RetailChains, such as Tesco and Ikea will be crucial….These retailers possess extensive experience of running successful retail stores and properties in markets like the US, China, Europe, Middle East and South East Asia, with local partners to create successful shopping formats..

By utilizing this knowledge they will be able to help usher in a revolution in the development of organized retail real estate in India..

SEBI fine-tunes “Draft-Regulations” for “Infrastructure Investment Trusts” in India | VCCircle

Leasing of land on which a Hospital or Hotel is located shall not be considered as an “ Infrastructure Project for the purposes of #InvITs”…!!

Securities market regulator #SEBI ( Securities and Exchange Board of India), has come out with more elaborate Draft Regulations for setting up “Infrastructure Investment Trusts (InvITs), which prescribe at least 80 per cent of the corpus to be invested in completed or income generating assets for InvITs issuing public units, strategic investors to bring at least 5 per cent of the amount, InvITs offer size to be at least Rs 250 crore (around $42 million) and that the proposed holding of an InvIT in the underlying assets shall be not less than Rs 500 crore ($83 million)..

This follows a previous consultation note circulated late last year and incorporates the provisions delineated in the Union Budget which provided tax pass-through status to such investment vehicles..SEBI has called for comments on its draft proposals by July 24…

Here are some key points:

InvITs are proposed to provide a suitable structure for financing/refinancing of infrastructure projects in the country..It shall invest in infrastructure projects, either directly or through SPV. In case of PPP projects, such investments shall only be through SPV…

InvITs which propose to invest at least 80 per cent of the value of the assets in the completed and revenue generating infrastructure assets, shall raise funds only through public issue of units and minimum subscription size and trading lot for such InvIT shall be Rs 5 lakh. Rest 20 per cent may be invested in under construction infrastructure projects (subject to maximum of 10 per cent) and other permissible investments. The minimum public float in such issues would be 25 per cent, which is at par with equity issues on the bourses.

These other permissible investments include listed or unlisted debt of companies or body corporate in infrastructure sector (provided that this shall not include any investment made in debt of the SPV); shares of companies listed on a recognised stock exchange in India which derives over 80 per cent of operating income from infrastructure sector; government securities besides money market instruments, liquid mutual funds or cash equivalents..

An InvIT which proposes to invest more than 10 per cent of the value of its assets in under construction infrastructure projects shall necessarily raise funds through private placement from Qualified Institutional Buyers and body corporate and the minimum investment and trading lot for such InvITs shall be of Rs 1 crore. Such InvITs shall mandatorily invest in at least one completed and revenue generating project and not less than one pre- commercial operation date (COD) project. In such InvITs there should be at least five QIBs and a maximum of 1,000 institutional investors holding units.

Listing shall be mandatory for both publicly offered and privately placed InvITs…!!

The InvIT shall refund money to the applicants if it collects subscription of amount less than 75 per cent of the issue size as specified in the final offer document or in the case of public issues less than 20 subscribers buy the units of the InvIT. SEBI has also said the maximum oversubscription amount which can be retained by the InvIT would be capped at 25 per cent over and above the target.,

An InvIT prior to making an offer of units, either through public issue or private placement, may have strategic investors such as banks, international multilateral financial institutions, foreign portfolio investors including sovereign wealth funds, etc., which together invest at least 5 per cent of the size of the InvIT or such amount  as may be specified by SEBI.

An InvIT shall be a trust with parties such as sponsor(s), investment manager, trustee and project manager(s). A trustee can either be a debenture trustee registered with SEBI and not an associate of the sponsor(s)/investment manager; or an associate of the sponsor/investment manager having not less than 50 per cent of its directors as independent and not related parties to the InvIT. However, a trustee of InvIT cannot be trustee to another InvIT or an Alternative Investment Fund engaged in infrastructure sector.

The proposed holding of an InvIT in the underlying assets shall be not less than Rs 500 crore and the offer size of the InvIT shall not be less then Rs 250 crore at the time of initial offer of units.

The aggregate consolidated borrowing of the InvIT and the underlying SPVs shall be capped at 49 per cent of the value of InvIT assets. However, this may exclude any debt infused by the InvIT in the underlying SPV. Further, for any borrowing exceeding 25 per cent of the value of InvIT assets, requirement of credit rating and unit holders approval has been made mandatory.

SEBI has said leasing of land or building on which a hospital or hotel is located shall not be considered as an infrastructure project for the purposes of InvITs but if revenues are generated from operation and management of a hospital or hotel, then the same shall be considered as infrastructure project under these regulations.

If the sponsor of the InvIT is a developer it needs to have at least two projects which have achieved financial closure…

It calls for the investment manager to have net worth of at least Rs 5 crore if it is a body corporate or a company or net tangible assets of value not less than Rs 5 crore in case the it is a Limited Liability Partnership..

It should have at least five years experience in #FundManagement/#AdvisoryServices/development in the #InfrastructureSector and have at least two employees with five years or more experience each, in fund management/advisory services/development in the infrastructure sector; at least one employee who has five years of experience in the relevant sub-sector(s) in which the InvIT has invested or proposes to invest; an office in India from where the operations pertaining to the InvIT is proposed to be conducted…!!

“Department of Industrial Policy & Promotion (DIPP)” for “simplification of Land Acquisition Act”, in India | ET Retail

The Department of Industrial Policy and Promotion (#DIPP) will pitch for simplification of the #LandAcquisitionAct to facilitate investment and manufacturing in the economy by doing away with the cumbersome rules and procedures in the legislation..

Commerce and industry minister Nirmala Sitharaman, will likely take the matter up with her rural development counterpart Gopinath Munde…DIPP will likely propose ” doing away with the social impact assessment process in the Act, which is a pre-requisite for public-private partnership (PPP) and private entities to acquire land”.

” Land Act in the present form has stalled industrial activity and suitable amendments are urgently needed to spur manufacturing in the economy…. There is no land acquisition taking place. We have taken up the matter with the minister,” said an official…

 

 

Act stipulates establishment of a state social impact assessment unit, the office of a commissioner, rehabilitation and resettlement, and a state-level monitoring committee by each state government. The Act has nearly brought acquiring land to a halt, impacting large projects hitting manufacturing growth, which contracted by 0.7% in 2013-14.

Besides, the commerce and industry ministry may also recommend empowering of district collectors of each state to authorise providing of up to 500 acres for small-scale industrial projects. Investment and infrastructure reforms are one of the 10 point agenda of Prime Minister Narendra Modi unveiled on Thursday… Rural development minister Gopinath Munde ruled out scrapping of the land acquisition act, however, called for a need to amend it….

Ms. Sitharaman has emphasised on bolstering manufacturing in the economy. Munde was recently reported as saying that the rules of the Act have made the implementation difficult. “There is no question of repealing the Act, as we supported it in Parliament; it is a good law. I have taken up the Act as my first issue with officials in this ministry… I must say I agree with the rates of compensation in the Act,” he said.

Any amendment the Act will need to go through the Parliament. The Act has made it mandatory to get the consent of at least 70% of the affected people for acquiring land for PPP projects and 80% for acquiring land for private companies.

DIPP secretary Amitabh Kant had said in his interview to ET last month that the law had to be redrafted and simplified keeping in mind that a fair price is paid to the farmer.

“We need to un-shackle controls. It provides for too many committees and too many approvals. It will be too time-consuming a process,” he had said..

The ” New Law provides compensation FOUR Times the Market-price for Rural-Land and up-to TWICE the value of Urban-land for acquiring for public works or industrial activities”…!!

“Tekla India & RICS promote” Building Information Modeling “(BIM) Technology”, to “Engineering & Construction Markets”| Realty Plus

“Tekla India, a leader in bringing Building Information Modeling (BIM) software to the engineering and construction markets of India, today announces its strategic alliance with the Royal Institution of Chartered Surveyors (RICS) and the RICS school of Built Environment….” 

The main objective of this partnership is to build a critical-mass of  “Quality Talent Pool” and create better Employment Opportunities for Young professionals across the construction and infrastructure industry, in the region..!!

This collaboration will help reach out to the student and education community to educate them on BIM technology using Tekla Structures through the Real estate and Construction Management courses offered by RICS School of Built Environment in their campuses in India…

As a part of this 2 year course, the program will provide students with a firm foundation on Tekla Structures Building Information Modeling (BIM) software…. Tekla India as a strategic partner will also be part of RICS’s conferences and workshops through the year across the major metro cities of the country..

The construction industry is the second largest industry of the country. It makes a significant contribution to the national economy and provides employment to large number of people…!!

The use of various new technologies and deployment of project management strategies has made it possible to undertake projects of mega scale. In its path towards automation, the industry has to overcome a number of traditional and technical challenges. 

Hence, professional training opportunities in this field is a must as this will help them do their jobs better, while achieving greater accuracy, efficiency, and cost management”.
Nirmalya Chatterjee – COO & Business Director, Tekla India said, “We are very proud to announce this one of its kind industry-academic partnership with RICS India. Volume of construction and infrastructure is only increasing in India and use of BIM technology can lead to enormous gains for the industry. 

“Qualified BIM professionals are the need of the hour. It is thus important that we train the younger generation joining the construction & infrastructure industry in their nascent stage…

This tie-up is a step forward to benefiting the student community as well as providing the industry with a larger talent pool. We along with RICS ensure that the best of professional education is offered to aspiring students keen on joining this vibrant industry”…!!

Sachin Sandhir, Managing Director, RICS South Asia said, ” We are honored to be associated with Tekla as it will further enhance our education curriculum at the RICS School of Built environment by providing our students with expertise and knowledge to improve their skills and giving them an edge in an increasingly competitive market ” ….

With advancement in technology, a new era of automation in construction industry has rolled in which clearly shows a huge growth from the manual representations to the 3D modeling and digital level of engineering. The introduction of the newest version of Tekla’s BIM software has improved construction workflow efficiency by providing the means to better organize models, manage tasks and avoid structural clashes..

Construction is about collaboration. As BIM penetrates construction industry processes, architectural trends produce increasingly complex shapes, and buildings include more refined technology, information exchange becomes progressively more important…!!

While information management remains at the core of BIM, building today’s structures requires more information than ever before. The new professionals need to well equip with the latest developments and technologies in the rapidly growing sector..

Expect “more Mid-Market Divestitures in 2014” : “Strategic-sales OR Acquisitions for growth-momentum” | Chief Executive

The report, conducted in late 2013 and the THIRD such endeavor by RBS Citizens, surveyed 460 Executives, ” who are open to OR currently engaged in some sort of corporate development activity, including Mergers, Acquisitions and Raising-capital…”

With a sense of stability returning to the economy middle market companies remain open to buying or selling but are prioritizing opportunities to Re-invest in their existing operations..

“ Our latest survey indicates that the appetite for acquisitions and sales remains strong, but businesses are taking a more strategic, less urgent approach, which reflects a strengthening economy,” said Bob Rubino, EVP and head of corporate banking and capital markets for RBS Citizens.

“As more Middle -Market companies see Top-line growth, Owners are looking for Strategic-Sales or Acquisitions that can augment their Re-investment Strategy and help keep their Growth momentum going ..”

These findings mirror other reports that suggest that critical sectors of the U.S. economy such as healthcare, retail food and energy will see continued or renewed M&A activity in 2014, according to business leaders at CIT Group. .

The middle market is ripe for a more fruitful M&A environment in 2014, according to Thomson Reuters LPC. The persistent fog of economic and political uncertainty that has stymied investment is lifting, giving way to improved visibility for lenders, borrowers and private equity sponsors alike.

Increased Economic confidence, more certainty with respect to Fed tapering, and fewer concerns about future government budget stalemates are paving the way for greater willingness to buy, sell and invest in middle market companies…

If in recent quarters companies were primarily focused on cost savings, they are shifting their attention to strategic growth opportunities. There is an abundance of capital – in the hands of both debt and equity investors – waiting on the sidelines, which will help buoy M&A activity…

Key findings from this year’s RBS Citizens survey include :

Sellers are more interested in selling part of their business than the whole.

While interest in raising capital remains steady, companies are less likely to take on debt and are more likely to accumulate earnings, sell a business unit or divest significant assets to make investments.

Executives believe both this year and next will be a ” Buyer’s market”..!!

Nine of Ten survey respondents intend to engage a ” Friend in the deal ” – an outside partner – to provide guidance throughout the M&A process ; half of all buyers and 40% of sellers are considering partnering with a commercial bank…!!

In late 2013, RBS Citizens conducted a survey of 460 U.S.-based middle market business executives that are open to or currently engaged in some form of corporate development activity, including mergers, acquisitions, and raising capital in the New England, Mid-Atlantic and Mid-West regions. For the purposes of this survey, middle market businesses have annual revenues of between $5 million and $2 billion.

The Sellers’ Perspective :

  • Based on this year’s survey results, the proportion of current and potential sellers in the market remains unchanged since 2012, but their motivations and intentions have shifted.
  • Although just 6% of middle market executives are currently involved in a sale, more than one-third indicate they would be open to a deal if approached by a buyer with a strategic fit.
  • While sellers were willing to ‘sell it all’ a year ago, a partial sale – selling an operating asset or division – has become more appealing than selling off the entire organization.
  • Being undervalued and underpaid by acquiring firms remains sellers’ primary concern; partial sellers are increasingly concerned about meeting post-acquisition revenue targets.

The Buyers’ Perspective :

While fewer acquisitions were in process at the end of 2013 than in the year before, deals this year are expected to be ” Larger and more Strategic” :

  • Less urgency in the market has translated into fewer current deals in process in early 2014 and more potential buyers are ‘on the sidelines’: open to but not actively seeking buying opportunities.
  • Buyers are less reliant on M&A as a means of growing; their goals are now more likely to be expanding geographic reach, increasing production and product capabilities and accelerating organic growth.
  • Respondents plan to make fewer purchases in 2014 but expect to spend more on each; the majority of executives anticipate spending between $10 million and $25 million.

Given the complexity of an M&A transaction, from ensuring proper valuation to identifying the best strategic buyers OR acquisition targets, the process has become more labour-intensive.

Most companies  without an “experienced Internal-Team” are “relying on an Outside Advisor”…!!

  • Of organizations who intend to engage external support for their deal-related corporate development needs, commercial banks are the most popular choice, followed by investment banks and business brokers.
  • Nearly half (47%) of respondents rate commercial banks as ‘excellent’ in regards to their corporate development capabilities, compared to 35% for investment banks and 26% for both private equity and venture capital firms.
  • Valuation, financing, opportunity assessment and due diligence are the areas where these companies are looking for the most help.