Shopping for homes
Britain’s largest supermarket chain is getting into the housing business. Tesco plans to build 2,000 houses over the next three years as the grocery retailer looks to redevelop its large urban real estate portfolio.
The houses will mostly be part of larger mixed-use projects; the residential component will help pay for the development of the site as well as ensure compliance with government rules encouraging a mix of residential and commercial property. The chain reportedly plans to build a store and 960 houses in Woolwich in Southeast London, a £400 million (€607 million; $787 million) project that would include 698 luxury apartments, as well as affordable housing. The plan is subject to approval.
Tesco has other real estate projects in the pipeline. These include 600 houses in Tolworth, Kingstonupon-Thames, in addition to affordable housing for its workforce in South London and the redevelopment of a supermarket in London’s Old Kent Road to include apartments.
According to several newspaper reports, Tesco’s substantial land holdings—the chain reportedly has enough land to build an additional 145 supermarkets— have been criticized, with some charging that Tesco grabs sites to prevent competitors from developing them. The supermarket says it often takes years to acquire the needed land for new outlets.
Adding value malls
The latest concept in Indian retail is the “value mall,” according to a recent report in the Financial Express. Similar in concept to outlet malls in the US, the regional shopping centers will sell branded merchandise at 25 to 30 percent less than the retail price. In the next two years, approximately 50 of these malls are expected to pop up across the Asian subcontinent.
TrammellCrow Meghraj, the Indian subsidiary of the US real estate firm, is spearheading the expansion of the malls into second-and third-tier Indian cities. Shubhranshu Pani, president of the company, told the newspaper: “The new concept of value malls is emerging not only because space for developing premium malls on high street is scarce, but also because retail property prices are expected to soar by 10 to 12 percent in metros by the end of the first quarter of 2007.”
Property firm Akruti Nirman is planning to brand its value malls in second- and third-tier cities under the “CityWorld” banner, while KSL Realty and Infrastructure is planning to rent out similar properties in cities like Vapi, Silvassa and Wardha.
Abu Dhabi-based developer Pearl Properties is developing a 61-story tower to honor the memory of Shaikh Zayed Bin Sultan Al Nahyan, the late president of the United Arab Emirates, who passed away in 2004 at age 86.
The tower, to be completed in 2008, is the second project announced by Pearl, which is one of the companies owned by the son of Shaikh Zayed, Shaikh Issa Bin Zayed al Nahyan.
Al Hekma Tower—translated as the Wisdom Tower—will be built in Dubai near the first interchange on Shaikh Zayed Road and will be topped with a 50-meter image of the late ruler.
Mr. Seif el Suwaidi, manager of Shaikh Issa’s private office, said in a statement: “The vision behind this unique project is to honor Sheikh Zayed, a widely respected Arab and world statesman, for a lifetime of positive contributions, wisdom and determined efforts, the combination of which has played a vital role in the UAE’s formation and economic success.”
Pearl’s first project, the ambitious mixed-use Palisades project in Dubai, was launched last November.
An inland empire
CalWest Industrial Properties, a joint venture between the California Public Employees’ Retirement System and RREEF, the private equity real estate arm of Deutsche Bank firm, is up on the block.
Reportedly valued at $3 billion (€2.3 billion), the portfolio is made up of 97 industrial and warehouse properties, comprising approximately 23 million square feet on the West Coast and in the Southwestern US, with concentrations in Orange County, Oakland, Dallas and Los Angeles.
Founded in 1998, the joint venture has made some high-profile acquisitions, including the 1999 takeover of Pacific Gulf Properties for $929 million and the 2001 acquisition of Boston-based Cabot Industrial Properties for $2.1 billion. At the time, the Cabot deal was one of the largest public REIT privatizations and reportedly was RREEF’s largest property acquisition ever.