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Indian Real Estate News

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  • Re : Indian Real Estate News

    WeWork aims to become profitable in 2021 globally: Sandeep Mathrani, CEO

    WeWork India's contribution to global revenue is currently small but it will continue to rise as the country has great potential for flexible workspace business, Mathrani said.
    • PTI
    • Updated: October 29, 2020, 18:54 IST

    NEW DELHI: Co-working major WeWork will focus on achieving profitable growth globally, including in India, in 2021 by increasing the occupancy level of its real estate portfolio, the company's CEO Sandeep Mathrani said.

    Further, Softbank backed-WeWork will revisit its plan to launch an initial public issue (IPO) only after it becomes profitable, said Mathrani, who became the new CEO in February after the exit of WeWork co-founder and former CEO Adam Neumann.

    In a video conference, Mathrani said India is an important market for the US-based firm and has recently invested USD 100 million in WeWork India.

    WeWork India's contribution to global revenue is currently small but it will continue to rise as the country has great potential for flexible workspace business, Mathrani said.

    Asked about WeWork's top priorities for India, he said the global strategy is to achieve profitable growth through increase in occupancy level at all its centres.

    "Our priority everywhere globally is profitable growth and streamlining our organisation and real estate portfolio in 2020," he said, adding that in 2021, the company plans go towards having profitable growth and become EBIDTA positive.

    Mathrani said the company has been able to reduce operating cost and cash burn significantly this year by streamlining the organisation and also its real estate portfolio.

    The exercise of right-sizing organisations has been completed, while the streamlining of real estate portfolio is also 75 per cent complete, he added.

    Mathrani said 65-70 per cent occupancy level is required for break even, which the company had achieved before the outbreak of COVID-19.

    He noted that the pandemic has highlighted the importance of de-densification of office space and adoption of hub and spoke model.

    He felt that India would benefit from this because of cost advantage.

    Mathrani described the WeWork global investment of USD 100 million as a "strategic move" that shows its commitment to the Indian market. He mentioned that WeWork has sold its investment in its China business.

    Asked whether the company has any plan to relaunch its public offer, Mathrani said the company is currently targeting to achieve profitable growth and positive cash flow, and then will decide the path forward.

    "I am a big believer of we take one step at a time, we show profitable growth and then decide what the path forward is. Get to the cash flow positive and then decide," Mathrani said.

    In September 2019, WeWork had withdrawn its public issue that sought to value the company at USD 47 billion. The valuation reportedly dropped to less than USD 8 billion.

    Karan Virwani, the CEO of WeWork India, said demand for flexible workspace has increased from large enterprises.

    He said the share of large corporates in WeWork India centres has gone up to 67 per cent from 50 per cent but expressed confidence that small members would come back post pandemic.

    WeWork India, which is owned by Bengaluru-based realty firm Embassy group, will not set up centres and then find clients, but it will prefer to take up clients and accordingly lease properties.

    Virwani said the WeWork India has been able to reduce its cost by around Rs 250 crore.

    WeWork India currently has 34 centres, comprising 60,000 desks and over 5 million sq ft area, in Bengaluru, Mumbai, Gurugram, Noida, Pune and Hyderabad.

    Globally, WeWork has around 840 centres with 6.6 lakh membership.











    https://realty.economictimes.indiatimes.com/news/commercial/wework-aims-to-become-profitable-in-2021-globally-sandeep-mathrani-ceo/78934036

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    • Re : Indian Real Estate News

      IWG's revenue fell 10.2% to $754.38 million in Q2 FY21

      The owner of the Regus brand said the advent of further potential pandemics and the need to preserve liquidity by limiting capital and operating expense signals a clear shift towards flexible working.
      • Reuters
      • November 03, 2020, 17:00 IST

      BENGALURU: British office space provider IWG said on Tuesday it has started to see some improvement in its sales activity and highlighted increasing interest in flexible working as companies address how their employees will work in the future.

      The owner of the Regus brand said the advent of further potential pandemics and the need to preserve liquidity by limiting capital and operating expense signals a clear shift towards flexible working.

      Shares in the company were up 2.6% at 261.4 pence in early trade.

      IWG, which competes against U.S.-based WeWork, said it has seen a strong pick-up in demand for its suburban locations, along with a rise in the sale of small offices, accommodating one to two people, compared to pre-COVID-19 levels.

      The company said revenue fell 10.2% to 583.3 million pounds ($754.38 million) in the quarter ended Sept. 30, hurt by customer churn and the significant impact the pandemic had on service revenue.

      The year "2020 has presented the toughest challenge the Group has experienced since its formation 31 years ago," the company said, adding that it was on track to achieve targeted annualised cost savings of about 200 million pounds.

      IWG, which is also looking to grow inorganically, said it is close to deploying the first tranche of capital raised in May with deals in the final stages of due diligence.











      https://realty.economictimes.indiatimes.com/news/commercial/iwgs-revenue-fell-10-2-to-754-38-million-in-q2-fy21/79018712
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      • Re : Indian Real Estate News

        Flexible space market to cross 50 million sq ft by 2023: Report

        It is anticipated that flexible space will grow by an average of around 15-20% per annum over the next three-to-four years, although this trajectory will not be linear, said the report.
        NEW DELHI: Irrespective of several short-term disruptions and challenges, increased demand from large enterprises, will support the growth of the flex space market to more than 50 million sq ft by 2023, according to a recent report by JLL India.

        The current market penetration of flex spaces into India's total office stock stands at 3% which is expected to move to 4.2% by 2023.

        It is anticipated that flexible space will grow by an average of around 15-20% per annum over the next three-to-four years, although this trajectory will not be linear, said the report.

        According to the report, Bengaluru and Delhi-NCR together account for more than 50% of India's flex stock followed by Hyderabad with 4.5 million sq ft and Mumbai with 4.3 million sq ft of flex office stock. Hyderabad and Pune are among the fastest-growing flex markets.

        However, the availability of capital, in the current scenario, will be a challenge. Players who have embarked on aggressive growth so far will find themselves strapped for capital. In such a scenario, the market is likely to witness consolidation activity driven by larger operators with financial wherewithal acquiring smaller ones.

        "While the flex-space market more than tripled in the last three years, the momentum going ahead will be relatively slower. Players are likely to tread cautiously, and the overall market is expected to expand 1.5 times from the current size," said Dr Samantak Das, chief economist and head of research & REIS, JLL India.

        Going forward, large enterprises might look at splitting up their offices to reduce commute times and dependence on public transport. However, with expected economic uncertainty, companies will be hesitant to commit large capital to real estate, said the report.

        The densification trend that had emerged over the last decade will likely reverse with enterprises leaning on flexible office space to relax space density.














        https://realty.economictimes.indiatimes.com/news/commercial/flexible-space-market-to-cross-50-million-sq-ft-by-2023-report/79131762


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        • Re : Indian Real Estate News

          Leasing by co-working operators to rise by 42% in 2021: Report

          As per the report, over 3,000 co-working centers across the country are likely to offer approximately one million desks by 2022.
          NEW DELHI: Leasing by co-working operators is expected to increase by 42% in 2021 at 4.9 million sq ft over 2020 with shared offices likely to gain greater significance in the post-Covid world, according to a recent report by Savills India.

          In 2020, co-working players are expected to lease around 3.4 million sq ft accounting 11% share of the total office leasing market. Although the overall leasing activity is expected to reduce significantly in 2020 as compared to 2019, it is expected to increase steadily over the next two years. The share of co-working space take-up in overall office leasing activity is poised to rebound to a 15% share in 2021, similar to the 2019 level.

          As per the report, over 3,000 co-working centers across the country are likely to offer approximately one million desks by 2022. Additionally, leasing activity by the co-working segment is expected to grow by 29% during 2015-2022.

          Co-working in India has grown from having a 5% share in 2016-17 to about 15% in 2019. Although the pandemic related uncertainty in commercial office market has impacted the growth trajectory in 2020, it is still expected to contribute around 10% of the overall leasing activity in 2021 and 2022, according to Savills India.

          In 2020, as of Q3, Bengaluru and Hyderabad had a combined share of approximately 66% of the total leasing activity in the co-working segment.











          Co-working spaces: Leasing by co-working operators to rise by 42% in 2021: Report, Real Estate News, ET RealEstate (indiatimes.com)
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          • Re : Indian Real Estate News

            Blackstone's Nucleus Office Parks targets 24.5 million sq ft by 2020 end

            “Nucleus will expand its capability in terms of development and stabilise the assets fully owned by Blackstone,” said Quaiser Parvez, CEO, Nucleus Office Parks.
            Blackstone Group is scaling up Nucleus Office Parks, an entity that houses commercial properties fully owned by the group, in a bid to own 24.5 mn sft of office parks by the year end, a senior official told ET. Half Blackstone Group’s portfolio is in Southern India.

            “Nucleus will expand its capability in terms of development and stabilise the assets fully owned by Blackstone,” said Quaiser Parvez, CEO, Nucleus Office Parks.

            Nucleus Office Parks currently has 9.6 mn sft of the operational and developmental portfolio across markets like Mumbai, Gurgaon and Chennai.

            “The Southern commercial market including Chennai, Bangalore and Hyderabad, will have around 50% of the office portfolio including developmental assets for Nucleus Office Parks,” said Parvez.

            So far Blackstone has followed a partnership model with builders like Salarpuria-SATTVA, K Raheja, Panschil and Embassy Group to buy income yielding commercial assets.

            Nucleus Office Parks will also see Blackstone Group merging some of the assets from the ongoing Prestige Estates office deal.

            Recently, Blackstone finalised the terms with Prestige to acquire rental income assets, including mostly office space and a few malls and hotels, for about $1.5 billion.

            Additionally, it has also added the recent Indiabulls portfolio to the entity to consolidate all its fully-owned properties under a single entity.

            Currently, Nucleus Office Parks has properties like One International Center (formerly Indiabulls Finance Centre), One World Center (formerly One Indiabulls Centre) and One BKC-Radius in Mumbai.

            It also owns commercial space in Chennai and Gurgaon.

            Blackstone currently owns the largest office portfolio totalling 120 million sq. ft across 44 assets in six cities.

            The market value of Blackstone's investments in India stands at $50 billion.











            Blackstone's Nucleus Office Parks targets 24.5 million sq ft by 2020 end, Real Estate News, ET RealEstate (indiatimes.com)


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