US real estate firm sets up shop

Global retail majors coming to India, like Wal-Mart and Carrefour, would require world-class real estate services and to provide this service, the globa; real estate firm New America Network Inc. (NAI) to signed an a licence agreement with Kolkata's NK Realtors Real Estate Services to provide international standard solutions and multi-locational facilties in the eastern region.

"NAI has 300 offices worldwide in 40 countries and the Indian business is expected to generate revenue of $1- $5 million in the first year of operation," said Abhijit Malkani, regional director for India and west Asia, NAI.

The tie-up wih NAI will give NK access to NAI's REALTrac real estate management system wherein every transaction is tracked online as also NAI's six sigma package for process management and expertise for feasibility analysis, location benefit analysis, facility management, etc..

NAI would now start marketing Kolkata as a real estate destination to its global clients, including Wal-Mart, Carrefour, ABB Group, General Electric, Gillette and Boots.

"This is part of our corporate policy wherein every office is marketed to every client", Malkani explained.

A study undertaken by real estate economist Peter Linneman on behalf of NAI had indicated that over the next five years, an estimated 3.5 million jobs will be outsourced to India, requiring 200 million square feet.

After adjusting for space lying vacant at present, an additional 10-20 million sq. ft. of new space would be needed every year over the next decade.

"Kolkata along with Chennai and Pune will become exciting real estate investment destinations in this next phase of development which would start in the later part of 2005," said R N Agarwal, director of NK Realtors.

In 2004, NK sold 5 million sq. ft. space in Kolkata.

Government incentives like lower tax rates in Sector V and the unit area measurement system had helped, Agarwal said.

NAI has six existing partnerships for New Delhi, Mumbai, Bangalore, Hyderabad and Chennai.

NAI hoped to initiate operations in Pune and Chandigarh shortly.

The Indian market posed problems like disparity in land and building costs across centres. High land costs had pushed up rental value in city areas and this was pushing users to suburbs, which would witness unprecedented levels of development in the days to come, Malkani elucidated.

The real estate sector has matured over the years with a more structured return on investment approach.

Majority of the projects were financed at the pre-sale stage and FDI-aided 100 acre packages was likely to become common, Malkani said.