Real Estate Archives

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.

Property Investment Market Continuing to Hit New Heights in Hong Kong

According to a report by JLL’s latest Property Market Monitor, the property investment market in Hong is continuously hitting new heights since last year, which is also riding on strong global investor interest.

A total of four en-bloc office buildings were sold for a total consideration of HKD 14.8 billion in 2018, which is about 17% higher than last year.

The en-bloc sale of 18 King Wah Road drew the most attention, setting a new record for the largest office transaction in Hong Kong East.

Decentralization remained as a key theme playing out among office tenants in the leasing market. The spotlight and the focus of leasing activity was on Hong Kong East and Kowloon East. Here tenant decentralization and consolidation requirements underpinned demand. Net take-up in the overall market amounted to 209,900 sq. ft till date. The net absorption in Central reached 33,000 sq. ft. as diverse tenants requested room for expansion.

“The broadening gap between rents in Central and emerging core business districts will add momentum to decentralization. We expect Hong Kong’s Grade A office market rentals to continue to trend higher, rising by up to 5% in 2018, with the support of the outbound growth of Mainland Chinese companies. Central will continue to outperform the overall market as demand competes for the pockets of space that exist,” reports Alex Barnes, Head of Markets at JLL.

On the back of a tightened vacancy environment, office rents in Central advanced by 0.7% m-o-m in January. There was a rise in rents in Hong Kong East region by 0.8% m-o-m, driven largely by increasing demand at the top-end of the market.

“The strong pricing achieved in the government sale of the Murray Road Car Park in May last year is now starting to permeate through the broader office market as investors reset benchmarks. With local money also flowing into the market, the record high prices being set in the market are no longer relying solely on PRC buyers. We expect capital values to rise a further 5-10% in 2018 even with interest rates set to rise further,” asserted Denis Ma, Head of Research at JLL.

The sentiment remained upbeat buttressed by record high land sale for government sites in Kowloon as well as strong gains in the local stock market, in the city’s residential market. The mass residential properties’ capital values raised up by 0.9% m-o-m in the first month of 2018 following to an increase of 1.3% m-o-m the previous month.

Costa Rica: The Best Place in the World for Retirees in 2018

According to a report, Costa Rica took the top spot for the first time in the index’s history. It topped the categories of healthy lifestyle and healthcare while scoring well in the fitting in, governance, entertainment and amenities, and climate categories.

A Costa Rica Central Valley Correspondent said, “Costa Rica has it all! It has perfect year-round tropical climate, your choice of Caribbean or Pacific beaches, mountains and volcanoes, big cities and nightlife or tranquil rural settings.”

As a proportion of Gross Domestic Product than the U.K., Costa Rica invests more in education and health. As a result, Costa Ricans enjoy a literacy rate approaching 98% and a long life expectancy. The country regularly wins accolades as having the happiest people on earth.

Ticos have established in their country one of the world’s most stable democracies. Costa Rica dissolved its standing army in 1949 and the reallocated funds are spent on education, healthcare, and pensions.

Costa Rica is already filled with a thousands of U.S. and Canadian people and millions have traveled there over the years for beach-resort vacations, surfing, fishing, and many more. With many Costa Ricans speaking English, it’s pretty easy for retirees to navigate while learning more Spanish.

With about 25% of the country’s territory protected, there is a focus on preserving the environment in Costa Rica. There is also a commitment from the government to power the country on solely renewable sources, especially hydroelectric, wind, and geothermal.

While Costa Rica wins the top spot as the most favorite country to travel, it’s just one of 24 countries examined in 12 categories, including: buying and investing; renting; benefits and discounts; visas and residence; governance; cost of living; fitting in; entertainment and amenities; healthcare; healthy lifestyle; development; and climate.

The motto of this guide is to assist the retirees to find locations, their currency goes further, and they can get the best bang for buck in terms of real estate, cost of living, and overall quality of life.

Building a software Company, all you need is the Balance

In the era of ‘Digital Transformation’, we’re repeatedly told two mantras: Software is eating the world, and every company is now a software company.
Unsurprisingly for a company that specialises in software development, CA Technologies is a big proponent of the idea. The company’s CTO, Otto Berkes, has even written a book about it. But he takes this concept further.

He says that companies should look to become “Modern Software Factories”; where not only are companies developing their own software, but doing so in a way that makes use of all the most up to date practices and tools around DevOps, Automation, Continuous Delivery, and security.

Mastering your software transformation
CA recently released a study, Don’t Let an Outdated Software Strategy Hold You Back, designed to explore how far along companies are on this journey towards every becoming a software company.

At an event launching the research, Berkes warned that there are “Already leaders and laggards in race to build software factories.”
The report suggests that while most businesses understand the importance and need for better software and processes for developing them, few have actually perfected their implementation of the concept. Only around a quarter of the 1,200+ companies surveyed reported widespread use or implementation of tools such as automation and application analytics as well as deployment of DevOps and security principles.

Those that embrace this concept get more than just applause in reports: The companies that are leading the way towards this software-driven way of doing business – what the report calls the ‘Masters’ – report higher revenue and profit growth than other companies. These ‘masters’ were also seen to be better at attracting talent and more agile.

You can’t just buy your way to digital transformation
Whether it’s John Deere acquiring Blue River for its Machine Learning skills, GM buying Cruise Automation for its self-driving car nous, ASSA ABLOY paying up for smartlock startup August Home, or Boeing snapping up Aurora Flight Sciences, legacy companies left and right are buying the tech startups trying to disrupt them in an effort to try and get ahead of the game.

Cultural change
Beyond the mere acquisition of talent – through hiring or buying – the hard work can be changing the way the company as a whole thinks and works.
“The cultural aspect is often underestimated. You can spend a ton of resources acquiring a ton of talent, but if you don’t have the systems and the culture in place to support and enable them, it will become a futile exercise.”

Company culture, however, is often driven by the people at the top. If a company’s execs and leaders aren’t able to adapt to the digital way of doing things that can stop any kind of evolution actually taking place anywhere in the organisation.
“We talk about talent gaps today focused on software development talent, but we also need the right talent at all levels of leadership to be able to move into a new way of harnessing software.”

“It’s a question of talent management. Leadership absolutely is a part of that challenge. There are going be many cases where leadership change needs to happen along with the rest of the talent change.”

However, although change often means new faces being brought on board, simply gutting the company of its older faces isn’t wise. AWS Chief Architect Glenn Core recently told IDG Connect that keeping experience on board is incredibly important during these kinds of transformations in order to ensure new ideas are implemented in a responsibly and logical way, and Berkes agrees.

“With this kind of transformation you need a balance of talent, institutional knowledge, and memory: they know where some of the pitfalls are and where it’s better to tread cautiously, and to integrate new talent, people, and thinking into the organisation in a thoughtful way.”

“The reality in business is you don’t have the option of putting a pause on everything and starting over, you need to make sure that the business that you have continues to operate while you bring in new processes and transform the business. It’s critical to have people who have the historical context to provide that continuity.”

DevSecOps

Given we live in an age of constant hacks and mega breaches, security should be first and foremost in the minds of all developers. Sadly, this is rarely the case. Security companies often talk about the idea of ‘Security by Design’, but given the alarming frequency products are shipped with poor security, it’s clearly not something that’s really reached the ears of developers.
Berkes and CA are keen to emphasise the security aspect of their ‘software factory’ vision, and are proponents of the concept of DevSecOps.

“The idea is to move away from the idea of having security be this thing that you think about at the end of the development cycle, this process you apply right before you release software, and have it be a core competency at all stages of development.”

However, just like changing a company’s whole mindset can be a challenge, so can ingraining security into development. Berkes argues that the concept has to be translated into very specific actions and outcomes in order to have a material impact.

“It’s one thing to talk about secure by design, it’s another to actually have the right tools to be able to cover the software lifecycle.”
Instead of simply telling developers ‘make sure you write secure code’, says Berkes, companies should instead offer tools that will actually help them identify and address security gaps in code.

In response to the general apathy security often receives from people outside the infosec bubble, some have proposed legislating that certain security frameworks for application development should be put in place to legally mandate how developers approach security.

“Legislation is tricky, partially because of the nature of security: nothing is 100% secure, so how do you legislate something you can’t guarantee?”
Instead, Berkes says he’d like to see something more akin to indicators of effort that show how seriously a company takes security.

“[People] download and cross their fingers and hope because there’s no way to really tell what amount of effort has gone into the application of security best practices. We need some kind of indication so you can assess make some kind of intelligent, data-driven assessment on level of trust.”
The Australian government is reportedly looking into a similar rating system for Internet of Things-connected products.

“It’s an interesting idea to try to standardize security best practices so that there’s some awareness both within industry and also on the consumer side of the equation so that when we click on something or download something at least you’ve got some idea of the level of effort that had been expended on security for that particular product.”

Bangalore Leads as India’s Largest Market for Flexible Workspaces

The flexible working space constituted about eight percent of the total absorption (3.42 million sq ft) in 2017 as compared to three percent share in 2016. According to a report, Bangalore remains the dominating market with almost 32 percent share of the overall flexible workspaces pie in 2017, followed by Mumbai with almost 18 percent share.

“We can say that 2018 is likely to be an active year in the flexible workspace sector, fueled by an increase in end-user demand from the IT industry. It is looking for ways to mitigate real estate costs and seeking flexible solutions. By avoiding long-term leases and the flexible workspace sector, occupiers across the market are seeking to minimise risk and are set to be the beneficiary of this uncertainty” asserted Senior Director, Office Services at Colliers International India.

The flexible workspace operators amounted to 1.1 million sq. ft., approximately seven percent of Bangalore’s total office market absorption, in 2017.
Bangalore remains the largest market for flexible workspaces in India and has the largest share of technology start-ups. Initially characterised by domestic operators, the market now has a more diverse range with international entrants including WeWork, The Executive Centre and Regus.

With approximately 23 percent of the flexible workspace operator transactions for the year, the CBD has remained one of the preferred locations. Other notable districts were SBD (28 percent) and Koramangala (18 percent). Despite being the technology hub of Bangalore, Outer Ring Road (ORR) had a share of only four percent, says the report.

Mumbai
Mumbai too is quickly catching up with Bangalore in the flexible workspace market. Occupiers in Mumbai are embracing the trend for the flexible workspace to cater to this increased demand, and various local operators have expanded at a rapid pace, fuelled by external investment.

Mumbai’s traditional CBD, Nariman Point, accommodates relatively small flexible workspace locations and most operators are planning to concentrate on the new financial hub of the city, BKC, and surrounding areas. The take-up by flexible workspace operators in Mumbai increased from 380,000 sq ft in 2016 to more than 600,000 sq. ft. (0.6 million sq. ft.) in 2017. In 2017, flexible workspace accounted for 12 percent of the total market take-up and remains concentrated in SBD locations such as BKC, Andheri and Worli, says the report.

The trend is expected to continue in 2018 due to the restricted supply in key markets in Mumbai. Companies such as iKeva and Avanta have recently announced expansion plans. Major operators present in the Mumbai market are a mix of international and domestic names including WeWork, Regus, Awfis, Avanta Business Center, Innov8 and Ikeva.

A Senior Executive Director, Mumbai & Developer Services at Colliers International India aserted, “Currently flexible workspace operators have a strong presence in major commercial hubs such as BKC, Andheri, Powai, Vikhroli and Lower Parel. While their footprint has increased tremendously in the last year it has been confined predominantly to these locations. However, we expect growth in 2018 to occur across all micro-markets in rambuildingconsultancy.co.uk.”

A Successive Rise in the Mortgage Rates in U.S. for Seven Straight Weeks

The Council of Global Unions held its 12th meeting conveying the support of its members in the US, and also condemned the attacks on the American trade union movement

During its annual conference, which took place on 13 February at the OECD Headoffice in Paris, the Council voiced its deep concern about the restriction of trade unions’ freedoms in the United States under the guise of freedom of speech.

Affiliates of the Public Services International (PSI) and Education International (EI) are currently fighting severe attacks, aimed at prohibiting the collection of fair share fees from non-unionised workers who nonetheless have to be legally represented by unions. The offensive is supported by wealthy conservatives including the Koch Brothers, whose goal is to diminish the power of the US labour movement. On 26 February the case will be presented to the US Supreme Court. “The case warps and weaponises the idea of freedom of speech by enabling one person’s complaint to undermine the interests of millions of workers across the country who benefit from collective bargaining,” according to a statement issued by the Council. It considers the case not as an isolated, domestic event but rather as part of a global attempt to weaken the trade union movement, as became apparent with the recently established Trade Union Act in the United Kingdom.

Finding strategies
The meeting discussed strategies to meet urgent challenges that confront the international trade union movement, from international trade agreements to tax evasion by global corporations, and climate change.

Attendants were briefed about the launch a global campaign to promote the observance of fundamental rights on the occasion of the 100th anniversary of the ILO in 2019. The campaign will have a special focus on occupational health and safety.

The Council also examined the progress of the work done by the ILO Commission on the Future of Work, whose mandate is to produce an independent report on how to achieve a future of work that provides decent and sustainable work opportunities for all. Participants at the meeting had the chance to discuss with the Director General of ILO, Mr. Guy Ryder. They also had discussions with Mr. Angel Gurria, Director General of OECD, about OECD’s Jobs Strategy.
EI was represented by Fred van Leeuwen, General Secretary, David Edwards, Deputy General Secretary, and Duncan Smith, Senior Coordinator.