India Deal Tracker

The India Street Editor Musings – Deal Tracker Readership at the India Street has grown tremendously thanks to all of you. In fact, we were recently mentioned by Digital Inspiration as one of Indian’s most widely read Finance Blog. We are soon going to bring entertaining investor related videos so that you can learn about Indian companies operating all over the world and by extension make money off the information. Stay tuned for these videos as they will be appearing in the next few weeks. In interesting to note the discussions on a real estate bubble in India now and where real estate values are headed. I tend to examine the real world behavior of those closest to the situation. For example, DLF is focusing on Hotel and SEZ development in India. Rajiv Singh expects his revenue growth to strengthen in the short term from a thrust in middleincome housing. While prices paid are high compared to the past few years and will not likely go up in the double digits as in years past, we will still see price appreciation in Tier 1 cities and much higher price appreciation in Tier 2 and Tier 3 cities. As I have said in past editorials, India needs to be completely rebuilt. It’s not practical to rebuild the older cities, so what is going to happen is that new city centers will appear alongside the old and you will see a large demographic shift happen as a result. You can bank on this prediction as it’s the only way to create modern cities without ripping up entire sections of India’s older cities. Below, I have listed real estate deals for June 2007. The information was provided courtesy of Ernst & Young.

Completed Deals Name of Entity

Nature of Deal

Value

Additional Details

Procter and Gamble Plaza Centers, a European property developer

Sold its general offices at Gurgaon Acquired about 10.8 acres of land At Trivandrum, Kerala

Rs 727.5 million Rs 1.1 billion

Alpha Tiger Property Trust

Entered into an agreement with Xansa, an outsourcing and technology firm, to purchase 40 acres of development land and for the sale and leaseback of Xansa’s real estate interests in India Acquired 16,100 sq. m plot from Sterlite Industries at Vidyavihar, a Mumbai suburb Acquired a three-acre plot at Vinay Marg in Delhi from National Buildings Construction Corporation Auctioned 73 acres of land in Bangalore Acquired a two-acre plot at Kalina in the suburb of Santacruz, Mumbai, from Ambuja Cements

Rs 1.9 billion

Sold five to nine floors at Global Business Park, Mehrauli Gurgaon Road, Gurgaon Acquisition was made through a 50:50 JV with an Indian property developer; the plot will be used to develop a mixed-use project totaling 2.1 msf, comprising shopping and entertainment centers, offices and a hotel The agreement appoints Alpha Tiger as Xansa's preferred provider in India; the agreement is conditional on local and Central government approvals, including SEZ notification and is expected to be completed in phases

Reliance Industries Hotel Leelaventure

Karnataka State Government Orbit Corporation

Name of Entity Alony Hetz Properties and Investments Limited, Israel

Rs 1.1 billion

–

Rs 6.1 billion

Intends to develop a 250-room premium luxury hotel, to be operational before the Commonwealth Games in 2010

Rs 295.3 million Rs 3.3 billion

–

Nature of Transaction Tied up with Wearology Limited of Poddar Group and LJCB Investment Group of Australia

Garnet Construction

Entered into a 50:50 JV with the Dubai-based Sternon Group

Trent, the retail arm of Tata Group RMZ Corp, a real estate development company

Tied up with global private equity investor Xander Entered into a 50:50 JV with AIG Global Real

Orbit plans to redevelop the plot

Additional Details To develop 500 acres at Karjat, near Mumbai; the initiative comprises a luxury holiday home project spread over 200 acres at an investment of US$ 160–200 million To develop properties in Europe, with a prime focus on Sweden and Mauritius, off the African coast To develop real estate properties for its various retail ventures To build commercial properties and to evaluate hospitality development

Estate

projects across India

Entered into an agreement with Kolkata Metropolitan Development Authority

To develop an integrated township in Hooghly District, West Bengal, with an investment of Rs 330 billion

Name of Entity

Nature of Transaction

Additional Details

Quantum Fund (promoted by George Soros)

Plans to acquire a 4% stake in Ansal API for Rs 2 billion

With this, George Soros’ stake in Ansal API will increase to 5%; in 2006, George Soros had acquired a 1% stake in the company for about Rs 250 million

JP Morgan

Plans to invest US$ 100 million in Prestige Group through equity placement or debt financing

Godrej Properties

Is negotiating with private equity investors to raise Rs 2 billion for its real estate projects in Kolkata and Hyderabad Are in advanced negotiations with textile firm Wearology to pick up majority stake in two real estate projects

Prestige Group would utilize these funds to develop projects across South India, as it plans to expand its footprint outside Bangalore –

DLF

Deals In the Making?

Infinite India, a real estate fund floated by JM Financial and Old Lane (the New York-based India-focused hedge fund) Carlson Group, a USbased hospitality company Al Fajer Properties, Dubai A consortium by Government of Singapore Investment Corporation, Dean Witter of Morgan Stanley and Quantum Fund of George Soros IL&FS Investment Managers (IIML)

Plans to acquire a 26% stake in a new JV (called Elbrus Builders) with the Unitech Group for Rs 26 million Plans to invest upto US$ 1 billion in India Plan to acquire a stake in Anant Raj Industries for Rs 6.8 billion

Intends to provide US$ 100 million to QVC Realty

Wearology is in the process of developing over 500 acres of land in various parts of Mumbai The JV will introduce the Regent hospitality brand in India and invest Rs 4.5 billion to develop a luxury hotel property in Greater Noida To develop commercial and township projects through JVs –

QVC plans to take up township projects in Gurgaon and Bangalore; IIML has raised over US$ 500 million to invest in real estate

New Money Arrived Name of Entity

Fund

Size

Additional Details

Morgan Stanley Real Estate

Ascendas

Tanglin Development

Red Ribbon UK Fund, a UK-based property investor

Expected Capital Name of Entity CapitaLand

Raised a property fund, MSREF VI, that would primarily invest in the Asian markets including Japan, China and India Launched Ascendas India Development Trust (AIDT), a real estate development fund with a term of eight years Raised funds from Hypo Real Estate Bank International

US$ 8 billion

–

S$ 500 million

The company plans to increase its asset size to S$ 1 billion and will invest in integrated development projects in India

Rs 3.8 billion

Plans to invest £ 250 million in the real estate sector in India in the next 5 years

£ 250 million

The fund will be used for financing and development of 2 msf of additional IT office space at Global Tech Park in Bangalore Of this, the fund will invest £ 50 million in budget hotel chains, £ 50 million to develop resorts in Kerala, £ 50 million in student accommodation, and £ 100 million in commercial properties

Fund Plans to launch a fund to invest in real estate projects in India

Size S$ 500 million

Additional Details –