Industry Insider Archives

Rocky 2019 Warned by Middle Real Estate Tycoon

A mogul of Middle East real estate development, Emaar Properties Chairman Mohamed Alabbar, said that the region has plenty of development opportunities despite geopolitical tensions and difficulties doing business. “If I was to look at the region as a whole I’m still positive,” he told CNBC at the Milken Institute MENA Summit in Abu Dhabi on Wednesday. However, he cautioned investors to remain prudent in the longer term. “I’m just careful about what is 2019. I’m just worried that we’ve been having a good time for too long. So I just hope that 2019 goes well … So make sure your balance sheet and debt level is at reasonable levels, so if there’s a shake-up you can handle it,” he said.

Emaar Properties is a real estate development company based in the United Arab Emirates (UAE) which is responsible for developments throughout the country and the wider Middle East, and beyond.Founded in 1997, Emaar Properties has been responsible for much of the development of Dubai, including the iconic Burj Khalifa, the world’s tallest building. It has also developed shopping malls and residential property, hotels and entertainment venues. The real estate firm also has developments further afield such as in India and Pakistan. Speaking to CNBC, Alabbar summarized the outlook for the company.

“My view is that Morocco is doing well for us, I would say Egypt is doing extremely well; Saudi Arabia with all the restructuring going on, it’s going to be a fabulous opportunity. In the UAE, we still expect to grow 20 percent on an annual basis,” he said, noting that the company’s growth in India was recovering and Pakistan was doing “reasonably well” for the firm.

Alabbar said the company had achieved around $5 billion of sales in 2017 and close to $1.8 billion of net profit with the company growing around 20 to 25 percent on an annual basis.

“Trust me, the margins, the opportunities and the growth I’ve been having in the Middle East over the last 20 years — even if you make a mistake, it’s so worth it,” he said, although he noted doing business in the wider Middle East had its challenges.

“Of course if I’m doing business in the UAE, it’s comfortable, it’s safe. But if I have to go to Cairo (in Egypt) I have to know the government, I have to know the mayor of Cairo, the mayor of Alexandria. But that’s what we do, that’s what we’re paid for, that’s what we have to do to grow our business,” he said.
The Middle East is certainly not a region for the faint-hearted. There is ongoing geopolitical turbulence caused by the continuing conflict in Yemen, uncertainty in Syria and Iraq about the possible resurgence of terrorist group Islamic State and internal disputes within the Gulf Cooperation Council (with Qatar being sidelined by

Saudi Arabia, Bahrain, the UAE and Egypt), not to mention perceived proxy wars between Saudi Arabia and Iran.
Couple these issues with economic instability, prompted by the lower oil price, and there’s a combustive mix for most businesses. Alabbar said it was nothing new, however, and that the region was ripe for real estate development and infrastructure investment.

“I think that what the Middle East is going through is, unfortunately, not new … But the truth is that the opportunities exist — there are millions of people who have to go to school, they have to shop, they have to find jobs and open new factories, there’s tourism, so therefore that will contribute to economic growth in the whole region.”
Asked about Emaar Properties’ balance sheet, Alabbar said there had been difficult times.
“2007, 2008 and 2009 was very painful and I try not to forget the lesson. And I deal with bankers with a lot of respect but when they come and tell me ‘your balance sheet is not very efficient’ I know that I’m doing a good job. So I like to keep my debt at a very reasonable level. Then again, we have to do business, we have to be aggressive but at the same time we have to keep our eye on the cycle.”

Officials to Approach Strong Local Economy in the State Real Estate

F.C. Tucker Commercial Thursday presented its annual State of Real Estate program, a panel discussion about recent trends and predictions in the region’s residential, retail and industrial real estate markets. F.C. Tucker officials and Evansville Mayor Lloyd Winnecke participated. A few of the highlights:

Officials said 2017 saw significant activity in local industrial real estate, and the plastics industry was a major driver. Two former Whirlpool warehouses on St. George Road were bought last year for distribution of plastics, and a $2.1 million sale last May on St. Joseph Industrial Park Drive is facilitating a plastics company expansion.

An empty building in the Vander burgh Industrial Park drew an Israeli-owned company in the plastics industry. “The economic impact of the plastics industry is huge, and as the economy stays strong, I look for the industrial demand to stay strong as well,” said Ken Newcomb, president of F.C. Tucker Commercial.
New comb also noted another recent industrial development win for the region, a TaylorMade golf equipment distribution center at 4400 Garrison Drive.
There tail market has been busy as well, although the continued trend to online shopping has caused some hits, such as the pending loss of Evansville’s Sears store in Washington Square.

Fresh Thyme has opened at The Promenade, and Dick’s Sporting Goods just opened its new store in the former Gordman’s store at East Lloyd Commons, relocating from the Pavilion shopping center further east.

Dick’s will have lower rent and an additional 15,000 square feet at the new site, said Aaron Kendall, F.C. Tucker Commercial vice president.
The new year is expected to bring the arrival of Costco at The Promenade, a relocation of Burlington Coat Factory, the arrival of At Home in Burlington’s former space and a few Eastland Mall additions, such as Box Lunch and Carters/Oshkosh B’gosh.

There’s been quite a bit of new office development in the region, but a lot of B or C class space remains vacant in Downtown Evansville and elsewhere.
Energy Systems Group moved into a new building, just east of Interstate 69 in Warrick County. New burgh Family Dental built on Ruffian Lane, and a new medical office facility is going on adjacent to Target Pavilion on Evansville’s East Side.

The former ITT Tech building is now occupied by Approval Payment Solutions. Commerce Bank opened a new branch at Lloyd and Eagles Crest Drive and relocated its corporate headquarters to nearby 320 Eagle Crest Drive.

The high level of vacancy “speaks to the need of those landlords to adapt and change to the new workforce taking over these spaces,” said Kyle Bernhardt, who works in F.C. Tucker Commercial in commercial sales and leasing.

The region’s tallest building, at 420 Main St., is back on the open market. A purchase option and redevelopment plan was announced at the 2017 State of Real Estate event, but it did not materialize.

“Although we are sad to see this potential project put on hold, we are still very excited about how this property could truly transform Downtown,” Bernhardt said.
Locally and nationally, new home construction starts are well below demand, said John Briscoe, vice president of F.C. Tucker’s residential division.

Vanderburgh and Warrick counties saw 535 housing starts in 2017. That number will likely grow about 10 percent in 2018, Briscoe said.
The local residential market saw record low inventory levels in 2017. Briscoe said houses were on the market an average of 56 days, and it was common during the spring and summer to see multiple offers on houses and offers above the asking price.

Winnecke said the region’s economy is strong. He pointed to major publicly supported projects in Downtown Evansville and organic growth elsewhere in the community.

The Multi-Institutional Academic Health Science and Research Center, a Downtown building that will house academic programs from three universities, is more than 70 percent completed and will be open for classes in August. Construction on the campus’ second building could begin this year.

“Strong regions have strong cores in their primary cities, but it’s not just Downtown where that is happening,” Winnecke said. “Literally, there is hundreds of millions of dollars of investment underway in our city right now … I think 2018 will be another banner year for the community. I hope people are documenting how the city is changing for the better.”

Developers, Investors Takes Flight to Industrial Real Estate

Industrial real estate is fast emerging as the go-to asset class for investors and developers, as demand for special economic zones (SEZ) wanes and India’s consumption and e-commerce story gets a boost from the government’s Make in India initiative and the goods and services tax (GST).
In a bid to build industrial, logistics and warehousing parks, industrial clusters and townships, there is a rush to buy land across states, something that hasn’t happened since the SEZ frenzy more than a decade ago. The warehousing and logistics sector, which attracted investments of more than a billion dollars in 2017, is gearing up for the next round which is expected to witness higher interest in building businesses around steady rental income.

At the top of the list is Canada’s Brookfield Asset Management Inc., which has invested in residential and commercial office real estate and is now evaluating opportunities in the industrial space.

“Brookfield is looking to invest in logistics parks. It may invest in a company or buy the facility or park itself,” said a person familiar with the company’s plans, who did not wish to be named.

A Brookfield spokesperson declined to comment.
Scouting for land is on in western India, including Mumbai and Pune, as well as in the national capital region (NCR), Gujarat, Chennai and Bengaluru. Sydney’s LOGOS Group and Assetz Property Group from Singapore, which partnered in 2017 to invest $400 million to build logistics and industrial parks in India, is shopping for land. Ben Salmon, co-founder and chief executive officer of Assetz Property Group, said they are planning to close at least three or four transactions in Maharashtra, Karnataka and Tamil Nadu.

“We have a customer-focused, long-term, annuity model approach where we will build logistics parks which get less rent but are focused on servicing companies, and may also do industrial parks for non-polluting, light manufacturing which attract higher rent and are more specialised,” Salmon said.
Niranjan Hiranandani-promoted Hiranandani Communities is planning to launch a 250-acre industrial park in Talegaon, Pune after it recently got approval for an integrated industrial area. The firm has another 300 acres near Chennai and 77 acres in Nashik.

“It’s a big opportunity for us and we are in it for the long run. India wasn’t ready for this even five years back but with the government’s push to promote manufacturing and GST this is the right time,” said Hiranandani.

Maharashtra’s industrial policy is in fact based on the premise of providing an exit route to developers stuck with SEZs owing to difficulties in land acquisition, changes in tax laws by the central government. Last week, in a major policy bailout for long-stuck Navi Mumbai Special Economic Zone Pvt. Ltd, the Maharashtra government allowed the promoters to convert the 1,842-hectare SEZ into an “integrated industrial township”.

“There was a lot of exuberance around SEZs but not many gained from them due to less demand, more supply leading to the inevitable fall. A lot many things are in order today, making industrial real estate more practical and doable,” said Sanjay Dutt, CEO, operations and private funds, Ascendas-Singbridge India.
Ascendas-Singbridge Group manages 30 million sq. ft of industrial space across Asia-Pacific, and plans to build 15-16 million sq. ft of warehousing and logistics space in India in the next five to six years with Firstspace Realty, jointly investing $600 million. Embassy Industrial Parks Pvt. Ltd, a collaboration between realty firm Embassy Group and an affiliate of Warburg Pincus, is looking to buy land in Mumbai, Bengaluru and Delhi, the sweet spot being 25-30 acres in each city. By March-April, it would have 10 million sq. ft of developable land.

“Buying land is not easy but we are building our business the way Embassy built its office park portfolio. It helps that we are allowed to draw long-term, cheaper debt after the logistics space was granted infrastructure status,” said Anshul Singhal, CEO, Embassy Industrial Parks.
Lodha Group is also planning to develop a 150-acre logistics and value-added industries park in the Mumbai Metropolitan Region (MMR), as part of its aim to have $1 billion of assets under management by 2021. The location is 45 minutes from Jawaharlal Nehru Port Trust (JNPT) and half an hour from the upcoming airport in Navi Mumbai.

“We are in the process of finalizing our business plan and partner and expect to start work on the site in the next few months,” said Abhishek Lodha, managing director, Lodha Group.

Mahindra Lifespace Developers Ltd will develop two industrial clusters – 264 acres in north Chennai (with Japanese conglomerate Sumitomo Corporation) and 268 acres near Ahmedabad, apart from earmarking 500 acres in Mahindra World City, Jaipur for industrial development and aggregating land outside Pune.
“The larger question is how will manufacturing demand play out in India?” said Anita Arjundas, managing director and CEO, Mahindra Lifespace Developers.

Triumph India to Confirm Three Motorcycle for this year

Triumph India has sent out a press release stating that it will be launching the Triumph Speedmaster, Tiger 800 and Tiger 1200 here this year. According to the company’s Managing Director, Vimal Sumbly, the bikes will be launched within the next few months. The bikes will come via the CKD route, a move Triumph is pushing to ensure upto 90 per cent of its products are CKD units, thus making it more affordable than a completely built unit (CBU).

The Speedmaster is based on the Bonneville Bobber’s underpinnings but carries a different cruiser design. It features swept-back handlebars and forward-set footpegs for a laidback riding position. The rear subframe is longer, to accommodate a pillion seat. Features include LED headlamps with inset DRLs and a single-pod analogue speedometer with a digital readout.

The 1200cc, liquid-cooled, parallel-twin engine comes in High Torque (HT) spec. It makes 77PS at 6100rpm and 106Nm of torque at 4000rpm. Ride-by-wire allows for two riding modes – Road and Rain. Also on the roster are switchable traction control and cruise control.

Suspension setup includes 41mm telescopic front forks and rear adjustable monoshock. Wheels are 16-inch units at both ends. Braking is via twin 310mm Brembo discs at the front and a 255mm rear disc with ABS as standard. The Speedmaster is expected to be launched by April 2018 at a price close to Rs 10.5 lakh (ex-showroom).

We rode the Speedmaster in the United States of America and found it to be dynamic and easier to adapt to than other cruisers available in the market.

The new Tiger 800 receives more than 200 engine and chassis updates. Triumph says the motor is more responsive at low revs. Power output, at 95PS, remains unchanged. First gear is shorter while the exhaust is lighter and better-sounding as well.

The most noticeable design feature is the new LED headlamps. The bodywork gets aero diffusers to channer air away from the rider and ensure less wind noise. Riding position has been revised for more comfort while touring. Features include a colour TFT screen similar to the Street Triple RS, five-way joystick cube on the left switchgear, and more refined cruise control.

Dynamic updates include higher-spec Showa suspension and Brembo brakes. Off-road tyres are standard now while the off-road oriented XC models get a dedicated “Off-Road Pro” riding mode. We are currently en route to Morocco to ride the new Tiger 800. Stay tuned for a first ride review of the bike.
The 2018 Tiger 1200 gets new graphics and colour options. Other design additions are new alloy wheels.The new headlamp get LED lighting and adaptive cornering lights. Features include a full-colour TFT screen and keyless ignition. Overall weight has dropped by 10 kilos.

The 1215cc inline-triple motor develops 141PS at 9350rpm and 122Nm of torque at 7600rpm. Ride-by-wire has been optimised for better engine response at low revs. A new Arrow exhaust enhances aural quality. Riding modes get an additional ‘Off-road Pro’ mode which allows the rider to deactivate all electronic aids.The 6-speed transmission gets a new bi-directional quickshifter.

Semi-active WP electronic suspension and Brembo brakes have been carried over. The electronics suite and Inertial Measurement Unit (IMU) has been optimised for better refinement.
We rode the new Triumph Tiger in Portugal and found it to be more refined and accessible for newer riders.

Honda Amaze 2018 took off the Red Gown at Auto Expo 2018 in Noida

Honda Cars India has unveiled the 2018 Amaze, based on a completely new platform at the ongoing Auto Expo 2018 in Greater Noida today. Honda has confirmed that the new Amaze will launch before the end of this calendar year.

It takes a lot of cues from the latest generation of cars from the Japanese manufacturer. Gone is the sloping nose of the old car and in its place is a much more horizontal line to the bonnet. The face and tail also borrow styling cues from the Accord and the boot, which looked added on on the first generation car, is much more seamlessly integrated into the design now. The large front grille stretches almost across the complete face and is flanked by sleek wraparound headlamps with LED daytime running lights (DRLs).

The 2018 Amaze also gets refreshments inside and the dash now features a new design. A large touchscreen infotainment screen now sits under the central AC vents with a new set of air con controls below. There is a new, chunky steering wheel that also has buttons for the new cruise control feature that debuts in the Amaze. The rear seats are comfortable and offer more space than before thanks to an increased wheelbase but there is still no sign of rear air con controls.

The engine options on the Amaze have not changed; the petrol variants will be powered by the same 1.2-litre, 4-cylinder 88PS/109Nm i-VTEC engine while the diesel variants will be powered by a 1.5-litre, 4-cylinder 100PS/200Nm i-DTEC engine. Honda has confirmed that it will offer an automatic transmission paired to the diesel engine too, though unlike competitors, this will be a CVT rather than an AMT. Honda claims a CVT offers more benefits at a slight premium when compared to the more affordable AMT.

The new Amaze will go up against its arch rivals from before: the third-gen Maruti Suzuki Dzire, theHyundai Xcent, the VW Ameo, Tata’s Tigor and Zest and also the Ford Figo, which is due for an update soon.

Aftek Motors Showcased at Auto Expo 2018

Amongst all the action at the Auto Expo 2018 Aftek Motors showcased its entire lineup of motorcycles. This includes the Knight Rider 170cc, Scorpion 200cc, Skipper 125cc, Royal+ 110cc, the Turbo 170cc and the Zontes R-250. The company will launch all the motorcycles in March, with price ranging from Rs 44,000 to Rs 1.75 lakh (all prices ex-showroom). The company also plans on opening dealerships in Uttar Pradesh, Uttarakhand, Maharashtra and Gujarat this year.

Starting off with the Turbo, it is powered by a 170cc engine which produces 14.2PS of power at 9000rpm and 13.5Nm of torque at 7500rpm, mated to a 5-speed gearbox. The motorcycle also comes equipped with an LED tail light and turning light. Suspension duties are handled by conventional telescopic forks up front and dual shock absorbers at the rear, while braking is handled by a disc brake at the front and a drum unit at the rear.

The Scorpion Z-200, on the other hand, is powered by a 200cc, single-cylinder, fuel-injected engine that produces 19PS of power at 8000rpm and 18Nm of torque at 6500rpm, mated to a 5-speed gearbox. It too comes with LED taillights and turning lights.

The third entry on our list is the Skipper AF-125. It is powered by a 125cc single-cylinder engine which churns out 10.8PS of power at 9000rpm and 9Nm of torque at 7500rpm. Transmission is taken care of by a 5-speed gearbox. According to the company, the motorcycle can achieve a top speed of 85kmph. Suspension duties are handled by telescopic forks up front and dual shock absorbers at the back. The company has equipped the Skipper with a disc brake up front and a drum unit at the rear.

The Aztek Motors Kight Rider KR-170 is powered by a 170cc single-cylinder engine which churns out 14.27PS of power and 13.5Nm of torque at 7500rpm, mated to a 5-speed gearbox. Just like the Scorpion and the Turbo, it gets LED tail and turning lights. The company has equipped the Knight Rider with telescopic forks up front and dual shock absorbers at the back. Braking is handled by a disc brake at the front and a drum unit at the rear.

The Royal+ is the company’s entry-level motorcycle. It is powered by a 110cc single-cylinder, air-cooled engine which churns out 11.55PS of power and 9Nm of torque, mated to a 5-speed gearbox. Suspension duties are handled by telescopic forks at the front and hydraulic dampers with helical springs at the rear. The company has equipped the motorcycle with drum brakes on both wheels.

The Aftek Zontes R250 is the company’s flagship motorcycle. It gets a bigger 249cc single-cylinder, oil-cooled engine which produces 24.4PS of power and 23Nm of torque, mated to a 6-speed gearbox. The motorcycle gets LED treatment at the front and back. It also gets a digital instrument cluster. The Zontes R250 can achieve a top speed of 145kmph according to the company. Suspension duties are handled by telescopic forks at the front and air bag shock absorbers at the rear, while braking is handled by disc brakes at the front and rear, with ABS coming as standard.

The company so far hasn’t announced any pricing details or when the motorcycles will be launched. However, with the company showcasing its production-ready lineup here, a launch might not be that far off.

Senate Bagged Healthcare aid for Marshallesa

OLYMPIA – For Doresty Daniel, Thursday was “the greatest day of my life.”
The Washington state Senate had just passed a bill to provide health care to Marshall Islanders who are residents of Washington, a measure designed to help the Marshallese who suffer health problems from nuclear tests the United States conducted near their islands in 1940-50. “It means that our people can go out there now, without being afraid of going to the doctor because of (the cost),” said Daniel, a Spokane resident and school district employee.

The bill would allow more people from countries belonging to the Compact of Free Association – an international agreement between the United States and the Pacific Island nations of the Marshall Islands, the Federated States of Micronesia and the Republic of Palau – to receive health insurance.
The Health Care Authority would pay for premiums and out-of-pocket costs of individuals who are citizens of a COFA nation and current Washington residents, with incomes at or below 133 percent of the federal poverty level.

The bill’s sponsor, Sen. Rebecca Saldana, D-Seattle, said the islanders have experienced negative health impacts from the testing, including cancer.
“We’re making right of a past wrong and making sure they have access to health care for their families, for their children and especially for their elders,” she said.
Sen. Bob Hasegawa, D-Beacon Hill, said Washington has a moral obligation to the islanders, who were used as “human guinea pigs” to test the effects of radiation.
“This case is one of the most egregious examples of where we really need to step up,” he said.
But Sen. Jan Angel, R-Kitsap, said the bill does not address the many other Washington residents who pay insurance premiums that are too high, especially young families and single mothers.

“I’m struggling with taking one group of people and singling them out with these benefits,” she said.
Sen. Ann Rivers, R-La Center, said she supports helping the islanders, but is concerned Washington will become a magnet for financial burdens that are the federal government’s responsibility.

“We’re being the adults in the room, and we’re taking care of these people,” she said. “(But) Washington state can’t fix all of Washington, D.C.’s problems.”
Emtison Nyberg, a Marshallese Spokane resident, said she felt like crying with joy when the bill passed. It especially will help seniors like her mother, who does not have insurance and was previously unable to seek help for a bad leg, she said.
“We’ve been waiting for this for a long time,” Nyberg said.

Healthcare Groups Refined the Single-payer System in California

The focus of the testimony was SB 562, a single-payer bill that was approved last year but then shelved. The bill would establish a system by which the state would pay for all healthcare and essentially cut out insurance companies. Taxes would increase, but supporters maintained that would be offset by the elimination of insurance premiums, copays and other costs.

There are some legal hurdles that would make switching to a single-payer system difficult, according to a report from local public news outlet KPCC. The rules that govern the Affordable Care Act, for example, are all federal, so any changes would require negotiation with the U.S. Department of Health and Human Services.

California’s Medicaid program, Medi-Cal, relies on both state and federal funding, and the feds have the final say. Plus, there’s Medicare: It’s a federal program, so California can’t make changes to eligibility, financing or benefits without a thumbs-up from Washington.

There are also a couple of state laws that would make things thorny — such as Prop 4, a 1979 law that limits how much tax money the state can keep. Above a certain threshold, funds have to be returned to taxpayers, and it would require an amendment to the law to make healthcare exempt.

Supporters of the bill, including the California Physicians Alliance, say it would be worth the effort. One of those supporters, economist Robert Pollin of the University of Massachusetts Amherst, told the committee Wednesday that the state would have to raise about $100 million in additional funds to cover the cost of single-payer, but that most in the state would end up paying less for healthcare because insurance-related expenses would be eliminated.

Other supporters include Health Access California, the California Immigrant Policy Center, Small Business Majority and the California Labor Federation.
Opponents of the bill — including the California Chamber of Commerce and the California Medical Association — say there’s no responsible way to pay for a single-payer system.

The committee is expected to produce a report by this spring with recommendations on how to proceed.