Saturday, November 17, 2007

Ajay Piramal Group company Piramal Enterprises enters into a joint venture with Sunteck Realty and Infrastructure to develop properties in India

The joint venture (JV), called Piramal Sunteck Realty Pvt Ltd, will focus on high-end real estate projects in metros and tier-II cities and plans to invest Rs 1,000 crore in the next one year.

According to Business Standard, The Piramal Sunteck Realty Pvt. Ltd. will undertake its first project, a commercial/IT park of over a million square feet, at Sion in Mumbai.

In addition to ultra luxury residential projects, the JV will develop commercial projects, mixed-use townships and SEZs.

"Residential properties will comprise 65 per cent of our portfolio while commercial and others will constitute the rest," said Ajay Piramal, chairman, Piramal Enterprises.

Piramal said the Piramal Sunteck Realty Pvt. Ltd. would fund the projects from the promoters' equity and private equity funds.

"We will strive to leverage the synergies of both the groups to emerge as one of the top realty companies in the country in the coming years," Kamal Khetan, chairman, Sunteck Realty Ltd. said.

Recently, Kotak Realty Fund has picked up 10% stake in Mumbai-based developer Sunteck Realty for Rs 140 crore.

Indiareit:

The Ajay Piramal Group group already has exposure in real estate through its real estate fund INDIAREIT, which has a total corpus of $470 million.

INDIAREIT (INDIAREIT Fund Advisors Private Limited) has both domestic and offshore funds.

Led by an entrepreneur personality, Mr. Ramesh Jogani, Managing Director and CEO, INDIAREIT, brings a developers perspective in choosing the projects with an inherent assurance of delivery and successful implementation of the projects.

Currently, INDIAREIT manages a corpus of about Rs 1,800 crore, which includes an offshore fund, in which 3i, a major private equity and venture capital firm, is a cornerstone investor.

Over 70 per cent has been deployed and of eight projects in progress, the fund managers have initiated the process of a partial exit in three. “Strategic exits in a Bangalore retreat comprising villas, a commercial property and a residential venture in Mumbai have raked in returns of 2-2.5 times, within a span of two years,” said Mr Jogani.

INDIAREIT plans to raise Rs 3,800 crore through domestic and offshore offerings by March 2008:

The USPs of INDIAREIT:

Managerial expertise in real estate domain

Entry after the project is conceived by Developer and Project involvement throughout the life cycle of the project - from land acquisition, development, marketing to sale of finished product with endeavor to safeguard the interest of the customers to the fund

Fund based capital return profit sharing rather than project base profit sharing

No control over crest and troughs but Innovative deal structuring to protect the downside

INDIAREIT' investment: Blue Ridge, Hinjewadi, Pune:

Paranjape Schemes's 138 acre, world class township, Blue Ridge at Hinjewadi in Pune, we all know, was launched on October 27, 2007 and all 2, 3, 4 and 5 bhk flats were booked by noon next day. Even the waiting list of second phase was also closed by the evening after 400 bookings. Launching of the Blue Ridge has become a historical event.

Brief Profile of Mr. Ajay Piramal:

Ajay Gopikisan Piramal (52) (B.SC.(HONS.), Master In Management Studies -Jamnalal Bajaj Institute, Advanced Management Programme, Harvard Business School, USA.) heads the Piramal Enterprises Group.

Piramal Enterprises has interests in pharmaceuticals, pharma research, glass containers for pharma, cosmetics and perfumery industry and financial services.

Ajay Piramal's presence in the pharmaceutical industry has been widely recognised. He is a member of the World Economic Forum's Governors' Forum on Healthcare.

Ajay Piramal is also the Chairman of the Drugs and Pharmaceuticals Committee of the Confederation of Indian Industries and a member of its National Committee.

Ajay Piramal was earlier a member of the Prime Minister's Council for Trade and Industry, the Prime Minister's Task Force on Pharmaceuticals and Knowledge-based Industries amongst others.

Recently, Ajay Piramal was conferred the 'Entrepreneur of the Year' Award of the UK Trade & Investments India Business Awards by Prince Andrew, Duke of York.

Indian Real Estate Joint Ventures:

Banking on the higher yields from real estate projects, a number of companies have formed joint ventures to develop properties in India.

Future Group company Kshitij had formed a JV with Singapore's Capitaland to develop malls.

US private equity funds Starwood Capital and Walton Street Capital entered into a agreement with property developer Shriram Properties to develop a Rs 5,500 crore integrated IT township and auto park in Hindustan Motor's Uttarpara plant in West Bengal.

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