Serviced apartments scale new heights

getimage.dllServiced apartments are fast becoming a hot real estate avenue, with as much as a 12-19 per cent annual yield on investments, against 10-12 per cent returns in the commercial segment.

Experts say in the serviced apartments space, developers, primarily from the hospitality sector, are targeting non-resident Indians (NRIs), expatriates and now, even domestic investors. To investors, this segment offers both capital value appreciation, as well as rental returns.

Hotel Leela, Grand Hyatt and Marriott International are among the major hospitality chains with serviced apartments. Ascott, one of the largest serviced residence owner-operator, has a tie-up with Ireo to offer such apartments in Gurgaon.

Now, the venture is expanding into other regions, too.

Many Gurgaon-based firms offer serviced apartments of various developers, including DLF and Unitech, to companies and tourists.

Ashutosh Limaye, head (research and real estate intelligence service), Jones Lang LaSalle India, says, “Of late, domestic investors, along with NRIs, are more keen to invest in serviced apartments, as the realty segment-— residential and commercial — isn’t offering very good returns. It is possible the returns in the serviced apartments space are as high as 12-19 per cent.”

He added the capital appreciation in the residential segment was five-seven per cent and less than five per cent in the commercial space.

Read more: Business Standard

Despite risks, global investors are still willing to buy India infrastructure story, says IDFC’s MK Sinha

Even in the prevailing environment of funk and despondency, MK Sinha — the boss of IDFC’s alternative asset management vertical — should be jubilant.

In just nine months since January of this year, Sinha’s team has managed to raise $644 million from investors in Continental Europe and America to be deployed in Indian roads, port and power projects. This is the largest fund raising in the last 5 years for the beaten down India core infrastructure story that is still fraught with execution risks and lack of regulatory clarity.

But Sinha, the Managing Partner and CEO, isn’t wearing his emotions on his sleeves; neither is stopping just yet. By the end of the calendar he is confident of reaching his billion-dollar fund raising milestone which will also mean surpassing the earlier $930 million raised at the peak of the 2008 boom. “IDFC is still perceived as the go-to institution for infrastructure investing and the market recognises our credentials and track record,” he quips as ET caught up with him for an exclusive interaction.

That’s probably true as investors from the earlier fund — Canadian pension funds, sovereign wealth funds – have reaffirmed their faith and have in fact upped their exposure the second time. “All the limited partners (read: investors) from the first fund have increased their commitment the second time around. They appreciate that we have stuck to our mandate of investing in specific assets as against a company. We value assets on a discounted cash flow basis and that is contained risk where as exposures in a corporate’s holding company mean being vulnerable to a lot of unknown factors,” Sinha explains his recipe for success.

Read more: The Economic Times

Mumbai lags behind other Indian cities in infrastructure

Vinayak Thakur, a foreign exchange dealer with a UK-based investment bank, has lived in Delhi, Hyderabad, and Mumbai and currently resides in Bangalore. Looking back, he thinks the city of dreams, with its creaky infrastructure, is a nightmare.

With many cities such as Delhi, Hyderabad, Bangalore and even relatively sleepy Jaipur rapidly modernising and developing swanky metro lines to ferry people, Mumbaikars, barring the privileged few who live and work in South Mumbai or posh pockets of some suburbs, are beginning to feel left behind. “Mumbai was the city where careers were made earlier, so people were ready to struggle everyday in the trains or fight the traffic on roads. Now other cities offer growth opportunity and have better infrastructure, so why would I want to live in Mumbai,” Thakur says.

The metropolis that once dreamed of becoming a global financial hub and outshining Shanghai offers choked roads, multitudes living in slums, and people taking jam-packed trains to their office that may be in a shiny tower in the middle of a dirty, low-lying locality.

Civic authorities admit there is chaos on the roads. “City suffers from serious traffic congestion with the average speed on major city roads being less than 15 km per hour. Due to lack of availability of land it is difficult to expand the road network and local trains are already overloaded, so building of a mass rapid transit system is the need of the hour,” Mumbai Metropolitan Region Development Authority said after tying up funding for metro line III.

Read more: The Economic Times

Govt plans to tweak law to boost air connectivity

Fliers can expect a new airport in the vicinity of the Indira Gandhi International Airport in Delhi, as the civil aviation ministry is discussing to do away with the clause that rules against building an airport within a 150 km radius of an existing airport.

This is not the first time that the government has discussed abolishing the 150 km clause. The issue was discussed earlier when Haryana and Uttar Pradesh had asked for permissions to build airports within the 150 km radius of the Delhi airport.

The civil aviation ministry is aiming at increasing air connectivity in the country with the abolition of the clause, as it would allow more airports to come up in the smaller cities across the country.

A senior civil aviation ministry official said that abolition of the clause is being discussed. “We will also try and talk to the existing airport operators in Delhi to get a relaxation for the airport in Delhi,” he added. No discussion on the same has been initiated with airport operators now.

According to the current norms, no other airport can come up in the 150 km radius of the existing Delhi airport unless the growth in passenger requires for the same.

Airports in Hyderabad and Bangalore also cannot have another airport within their 150 km radius.

Read more: Financial Express

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