Growing charm of downtown housing projects

Around five years ago, it was announced that Dasaprakash Hotel would give way to a massive residential project. And then, around two years ago, Breeze Hotel, another landmark on Poonamallee High Road, was in the news for the same reason.

These are not isolated cases. Over the last five years, there have been other instances of commercial establishments being taken up for development of residential projects.

There is a variety of reasons for this situation, but the one factor that dominates all others is that residential apartments in the downtown areas of the city sell, actually sell very well, and according to analysts, in the current economic climate, developers stand to gain more from residential projects than from commercial redevelopment of these spaces.

“Returns is the reason,” says Ajit Chordia, managing director of Olympia Group. “The rate of returns is low on rental properties and we will get stuck in exit valuations.” Asked if there is a good demand for high-end projects in the city’s centre, he says it varies from one location to another.

One of the other reasons for commercial spaces — mostly, hotels and office complexes — in downtown areas being offered for sale is that their owners see in the move a greater opportunity for expansion of their business. As these spaces fetch good prices, they can invest elsewhere in large land parcels, mostly in Greenfield areas.

“Divestment for business expansion or restructuring is the reason for such projects coming up in the core areas of the city’s business district,” explains Sanjay Chugh, national head, mandated sales and business head, Chennai, of Jones Lang LaSalle.

There is also another reason for the sale.

T. Chitty Babu, chairman and chief executive officer, Akshaya, says corporate firms exited land parcels in the city as they realised that land was not appreciating beyond a particular point.

Another reason: home buyers want to stay in areas that provide quick access to social infrastructure, including schools and colleges, hospitals, places of leisure, shopping and entertainment zones and these are found in abundance within the core areas of the city, Mr. Chugh says, adding that high-end homes range anywhere between Rs. 4 crore and Rs. 12 crore in these locations.

Mr. Babu points out that some developers, who went in for hotel projects, were reconsidering their decision and planning residential projects instead as there were far too many players in the hospitality sector in the city now.

Sanjay Jain, who has purchased a flat in a luxury project in Egmore, says he does not mind the monthly maintenance expenditure of Rs. 12,000 as his home comes complete with all amenities and more importantly, is located close to all the most sought-after places in the city.

Resource: http://www.thehindu.com

ELEMENTAL Releases Plans of 4 Housing Projects for Open-Source Use

The 2016 Pritzker laureate Alejandro Aravena has announced that his firm, ELEMENTAL, has chosen to release four of their social housing designs to the public for open source use. Speaking in a panel discussion held by the Pritzker Prize earlier tonight titled Challenges Ahead for the Built Environment, Aravena stressed the need to work together to tackle the challenge of rapid migration that is taking place all around the globe, a message closely tied to the theme of the upcoming Venice Biennale which Aravena is directing. In this spirit, DWGs of these four designs - which offer the basic elements of a house at a low budget and encourage the residents to expand into an adjacent space as they find the money to do so - will be available for architects worldwide to learn from.

The drawings, including plans, sections, elevations, site plans and details of the firm's Quinta Monroy, Lo Barnechea, Monterrey and Villa Verde projects, are available to download from ELEMENTAL's site. In addition, the firm has produced a brief summary of the principles that underpin these projects. As stated on ELEMENTAL's website: "Here you will find 4 examples, with four different designs that pursue the same goals and principles. From now on they are public knowledge, an open source that we hope will be able to rule out one more excuse for why markets and governments don’t move in this direction to tackle the challenge of massive rapid urbanization."

Resource: http://www.archdaily.com

Why you must invest in institutionally-funded housing projects

Purchasing a property is the biggest investment of one’s life and usually requires immense sacrifice. Most middle-class people dream of owning a house. Buying a property is looked upon as a very simple transaction wherein the buyer pays money (through savings or a bank loan) to the seller for the underlined property. Though it looks easy, the real picture is different.

As a home buyer, you need to run many checks on the property you are purchasing. Unless buyers are diligent and ensure that the property they are purchasing has no encumbrances, has a clean title, they can easily land in trouble. Just by staking your savings and signing on for a bank loan does not guarantee that your dream home will materialise in time. Above all, your lifetime savings are at risk if the property has an issue.

Any person looking at investing in residential real estate would like to invest in a safe and clean property, which can be achieved only by investing in institutionally- funded projects, which are funds raised through external institutional financers like PE funds, financial institutions or banks.

Fund houses typically invest with developers having a stable track record and skin in the game. Proven stability of a developer is a safety net for the buyer in terms of on-time delivery, quality and adherence to contractual obligations. Before funding, they conduct a detailed technical due-diligence to evaluate the approvals and development potential of the project. They also conduct legal and commercial due-diligence including land, title, past borrowing history, delivery record etc to ensure a project will be completed, making it a safe investment.

The fund is handled by professional experts who monitor the project progress on a periodic basis to get real time updates on construction progress. The benefits of investing in institutionally-funded projects are many:

• Funded projects enable customers to rely on the due diligence in relation to title and approvals being done by the institution, which has provided the funds.
• Institutions through their network and contacts conduct a thorough background check of the developers, which is a key investment criterion.
• Institutions invest with reputed developers with good execution track record, thereby minimising the risk of delivery and completion.
• Institutions will ensure availability of money to ensure completion of the project.
• Management plays an active role in business strategy as they have high investments in the project and remain committed until the exit phase.

The real estate sector is one of the most globally-recognised sectors. It is the second largest employer after agriculture and slated to grow around 20-30 percent over the next decade. As real estate is a business with long development cycles, from planning to construction, it takes several years and now is the time to plan for these changes. Buying real estate means it’s a long-term commitment and do not mix it with short-term gains.

Looking forward to 2020 and beyond, the real estate investment industry will find itself at the centre of rapid economic and social change. The growing middle class is increasing demand for specific types of real estate, apart from the demand for affordable housing, smart cities and integrated township projects and REITs.


Resource: http://forbesindia.com

Apartment buildings with no car parks to accelerate says global expert

An apartment building with no designated car parks? John Campbell, the man who steered Toronto's $35 billion waterfront precinct overhaul for 13 years, says authorities around the world will need to factor in the diminishing need for car parks in multi-storey developments as the digital economy and a shift away from vehicle ownership takes hold.

Mr Campbell, who stepped down as chief executive of Toronto Waterfront last year after directing the overhaul of an 800-hectare area on Lake Ontario southeast of the city's centre, says planning authorities and governments will have to increasingly confront this "ticklish issue".

He says the rising popularity of ride-sharing services like Uber, a preference for using public transport systems in CBDs and inner-city precincts and the looming use of driverless cars is behind the big shift, and there are lessons for Australia in the global trend.

Mr Campbell was speaking at the Urban Development Institute of Australia national congress in Adelaide on Tuesday where he also said that one of the keys to success for extensive waterfront overhauls is to ensure there are no residential apartments on the ground floors of apartment buildings facing toward public spaces and walkways because that rapidly kills the buzz and ambience of an area.

Metropolitan Toronto, with a population of 6 million is the fifth-largest city in North America behind Mexico City, New York, Los Angeles and Chicago. One of the underlying tenets of the waterfront redevelopment was the need for it to be "future-proofed". In the Toronto Waterfront project, residential developments, including an affordable housing component, were all wired with the fastest possible broadband.

"We see it as very, very important that everyone has access to the digital economy," he said.

Apartment buildings with car parks were encouraged to design them as flat spaces that could be easily configured in the future for other purposes, rather than always being condemned to be a car park.

Outside of the waterfront precinct, there is another 42-storey condominium tower with no permanent residential car parks attached to it. It is a global trend.

"I think the authorities are starting to get wind of this."

In Australia, several cities are embarking on major waterfront and riverfront redevelopments including the Barangaroo precinct on Sydney's Darling Harbour, the riverbank overhaul fronting the River Torrens in Adelaide and the Riverside development on the foreshore of the Swan River at East Perth.

Melbourne has undertaken an extensive revamp of its Docklands precinct, but that has attracted substantial criticism for being too much like a business park without a welcoming feel.

Mr Campbell says Australian cities have different strategies when it comes to revamping waterfront areas, but they each need to ensure there is maximum public engagement right from the outset.

"Every city has a different take on it," he says. But all cities are engaged in a "war for talent" where they are trying to attract young professionals to live in their cities, with attractive and inviting waterfront spaces a big drawcard which then delivers substantial spin-offs for the economy.

Resource: http://www.smh.com.au

BRIEF-Orava Residential REIT buys 49 apartments for EUR 9.6 mln

Orava Residential REIT plc :

* Said on Thursday is to acquire total of 49 apartments for total debt-free purchase price of 9.6 million euros ($10.92 million)

* Apartments are located in Helsinki area, Jyväskylä, Lahti, and in medium sized towns

Source text for Eikon:

Further company coverage: ($1 = 0.8790 euros) (Gdynia Newsroom)

Resource: http://in.reuters.com

New luxury apartments in the making near Orlando Fashion Square mall

Orlando Fashion Square mall is set to get some new development — bringing with it some future shoppers and diners.

Atlanta-based Trammell Crow Residential Co. plans to tear down the existing 40,000-square-foot Anthem College building on Maguire Boulevard northeast of the mall and build in its place a new 356-unit, four-story Class A apartment complex, city of Orlando documents showed.
The 8.4-acre site is owned by MMM Lakewood Ltd. LLLP, the entity that owns the land that Orlando Fashion Square sits on, Orange County records showed. The city’s municipal planning board is expected to review the proposal at its May 17 meeting, documents showed.
The estimated $50 million apartment project, dubbed Alexan at Audubon, would add a new element to the mall, where construction began in February on a new 9,000-square-foot regional hub for Wilmington, Del.-based The Bancorp Inc.’s (Nasdaq: TBBK) commercial fleet leasing business, as previously reported by Orlando Business Journal.

And apartments have been part of Fashion Square’s expansion since 2014, when Franklin, Tenn.-based mall owner UP Development Inc. sought approval for 250 units.

Representatives from UP Development didn’t respond to requests for an update on Fashion Square plans, and Jim Berardinelli, vice president of Trammell Crow Residential, wasn't immediately available for comment.

However, Trammell Crow Residential last year started work on the new $50 million, 314-unit Alexan Crossroads apartments near Walt Disney World — its first new development in Central Florida since the Great Recession, as previously reported by OBJ.

New apartments typically bring opportunities for construction companies and vendors, while also creating new housing stock that’s much in demand for Orlando’s growing population.

Read more about the local apartment market and come back to OrlandoBusinessJournal.com for updates.

Resource: http://www.bizjournals.com

WeWork launches WeLive flexible rental apartments in NY and DC

We work, the co-working real estate startup valued north of $5 billion, is launching WeLive, a residential rental building that offers flexible renting and a nicely packaged set of amenities.

The new program launches for New York (at 110 Wall Street), the same building where WeWork has its main space in the Financial District, as well as DC, a 2221 S. Clark Street in Arlington.

The spaces have studios, 1BR, 2BR, 3BR, and 4BR spaces, serving up to eight people, and the studios can come in single bed apartments or two beds to split up the space between roommates.

But what’s more interesting is that folks can rent however they want, with the freedom of a month-to-month agreement.

The least expensive deal is a shared Studio Plus apartment, that comes with two beds, and starts at $1375/month. Keep in mind that includes furniture, bedding, and kitchenware. There are currently over 200 units, available to anyone.

For an extra $150, users will have access to a full set of amenities, including monthly cleaning, high-speed internet and Verizon cable.

WeWork is positioning this as an easy way to move to New York (like as a startup) and get going without all the extra costs of moving, buying furniture and kitchenware, and getting utility bills set up.

Plus, the WeLive space will also have community events like a Happy Hour, Karaoke sessions, etc., all of which can be investigated on the WeLive app.

Given that, at least the NYC location, the WeLive space is in the same building as WeWork, it’s easy to see how this could be a convenient living option for a NY startup.

However, the WeLive space could also be attractive to people just graduating from NYC universities and looking for a job, or people who are losing their lease but haven’t chosen a more permanent settlement yet. And with the long list of amenities included in the deal, it would be easy to see people staying far longer than they expected.

Resource: http://techcrunch.com/