Faced with the non-compliance by the real estate companies, Brand Capital, earlier known as Times Private Treaties, the ad-for-equity business of publishing group Bennett, Coleman and Co. Ltd (BCCL), has hired real estate consultant Knight Frank India Pvt. Ltd to manage its real estate portfolio. Brand Capital has a real estate portfolio of Rs.500 crore.
“This is the first initiative of its kind where we have taken up such asset management and advisory for a large corporate house,” said Amit Goenka, National Director, Capital Transactions, Knight Frank.
The end-to-end management and advisory solution that will be provided by Knight Frank includes optimizing value with timely exits, maintenance, reporting and analytics, valuation, assistance with leasing, compliance and collections.
The private treaties concept, in which equity is bartered for advertising space and time, was pioneered in India a few years ago by BCCL, publisher of The Times of India and The Economic Times.
The model is also followed by other media houses such as HT Media Ltd, publisher of Mint and the Hindustan Times; Network18 Group, which runs the CNBC-TV18 and CNBC Awaaz channels; DB Corp. Ltd, publisher of the Dainik Bhaskar and the Daily News and Analysis; and New Delhi Television Ltd, which runs the NDTV 24×7 and NDTV Profit channels.
According to Brand Capital’s website, it has 13 real estate firms in its portfolio, including Emaar MGF Land Ltd, Sobha Developers Pvt. Ltd, Nitesh Estates Ltd, Shriram Properties and Lavasa Corp. Ltd.
Companies, large family offices and trusts have engaged private bankers and wealth managers to professionally manage their financial investments in public and private equity, debt capital markets and other securities.
In India, investors have a large direct exposure to real estate, which can form over 40% of their total investment portfolio, according to Goenka. With increasing size and complexity, there has been a growing need to professionally manage real estate as an investment asset class.
“We are facing growing enquiries and have a few other such mandates in the pipeline from large financial institutions, ultra high net-worth individuals and family offices,” said Goenka.
Anshuman Magazine, chairman and managing director of CB Richard Ellis India Pvt. Ltd, a real estate consulting firm, attributes this trend to soaring real estate prices that have made holdings in land and property a very important part of any company’s total business.
“We have been managing real estate portfolios for various state governments,” he said. “However, in the private sector, the trend has recently picked up. Globally, the practice is very common because real estate is such a specialized field and people have realized the need for professional help.”
The role of portfolio managers has also changed and they now also advise companies on how to turn non-performing assets into income-generating ones.
Industry analysts point out that media houses and larger corporates that have a high exposure to real estate may not necessarily have the skill to manage it.
“Large companies such as the Birlas and the Tatas have gone into retail, which has a huge real estate cost and hence need professionals to help them,” said Sachin Sandhir, managing director and country head of the Royal Institution of Chartered Surveyors in India, an independent, representative professional body that regulates property professionals and surveyors.
