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The India Street Editor Musings – Deal Tracker

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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 middle-
income 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 Nature of Deal Value Additional Details
Entity
Procter and Sold its general offices Rs 727.5 Sold five to nine floors at Global Business
Gamble at Gurgaon million Park, Mehrauli Gurgaon Road, Gurgaon
Plaza Centers, a Acquired about 10.8 Rs 1.1 billion Acquisition was made through a 50:50 JV
European acres of land with an Indian property developer; the plot
property At Trivandrum, Kerala will be used to develop a mixed-use project
developer totaling 2.1 msf, comprising shopping and
entertainment centers, offices and a hotel
Alpha Tiger Entered into an Rs 1.9 billion The agreement appoints Alpha Tiger as
Property agreement with Xansa, Xansa's preferred provider in India; the
Trust an outsourcing and agreement is conditional on local and
technology firm, to Central government approvals, including
purchase 40 acres of SEZ notification and is expected to be
development land and completed in phases
for
the sale and leaseback
of Xansa’s real estate
interests in India
Reliance Acquired 16,100 sq. m Rs 1.1 billion –
Industries plot from Sterlite
Industries at Vidyavihar,
a Mumbai suburb
Hotel Acquired a three-acre Rs 6.1 billion Intends to develop a 250-room premium
Leelaventure plot at luxury hotel, to be operational before the
Vinay Marg in Delhi Commonwealth Games in 2010
from
National Buildings
Construction
Corporation
Karnataka State Auctioned 73 acres of Rs 295.3 –
Government land in Bangalore million
Orbit Corporation Acquired a two-acre Rs 3.3 billion Orbit plans to redevelop the plot
plot at Kalina in the
suburb of Santacruz,
Mumbai, from Ambuja
Cements

Name of Entity Nature of Transaction Additional Details


Alony Hetz Properties and Tied up with Wearology Limited of To develop 500 acres at Karjat, near
Poddar Mumbai;
Investments Limited, Israel Group and LJCB Investment Group the initiative comprises a luxury
of Australia holiday home project spread over
200 acres at an investment of US$
160–200 million
Garnet Construction Entered into a 50:50 JV with the To develop properties in Europe,
Dubai-based Sternon Group with a prime focus on Sweden and
Mauritius, off the African coast

Trent, the retail arm of Tata Tied up with global private equity To develop real estate properties for
Group investor Xander its various retail ventures
RMZ Corp, a real estate Entered into a 50:50 JV with AIG To build commercial properties and
development company Global Real to evaluate hospitality development
Estate projects across India

DLF Entered into an agreement with To develop an integrated township


Kolkata Metropolitan Development in Hooghly District, West Bengal,
Authority with an investment of Rs 330 billion

Deals In the Making?

Name of Entity Nature of Transaction Additional Details


Quantum Fund (promoted Plans to acquire a 4% stake in Ansal With this, George Soros’ stake in
by George Soros) API for Rs Ansal API will increase to 5%; in
2 billion 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 would utilize these
Prestige Group through equity funds to develop projects across
placement or debt financing South India, as it plans to expand its
footprint outside Bangalore
Godrej Properties Is negotiating with private equity –
investors to raise Rs 2 billion for its
real estate projects in Kolkata and
Hyderabad
Infinite India, a real estate Are in advanced negotiations with Wearology is in the process of
fund floated by JM textile firm Wearology to pick up developing over 500 acres of land in
Financial and Old Lane majority stake in two real estate various parts of Mumbai
(the New York-based projects
India-focused hedge fund)
Carlson Group, a US- Plans to acquire a 26% stake in a new The JV will introduce the Regent
based JV hospitality
hospitality company (called Elbrus Builders) with the brand in India and invest Rs 4.5
Unitech Group for Rs 26 million billion to develop a luxury hotel
property in Greater Noida
Al Fajer Properties, Dubai Plans to invest upto US$ 1 billion in To develop commercial and
India township projects through JVs
A consortium by Plan to acquire a stake in Anant Raj –
Government of Singapore Industries
Investment Corporation, for Rs 6.8 billion
Dean Witter of Morgan
Stanley and Quantum Fund
of George Soros
IL&FS Investment Intends to provide US$ 100 million QVC plans to take up township
Managers (IIML) to QVC Realty projects in Gurgaon and Bangalore;
IIML has raised over US$ 500
million to invest in real estate

New Money

Arrived
Name of Fund Size Additional Details
Entity
Morgan Stanley Raised a property fund, US$ 8 billion –
Real MSREF VI,
Estate that would primarily invest
in the
Asian markets including
Japan, China
and India
Ascendas Launched Ascendas India S$ 500 million The company plans to increase
Development Trust (AIDT), its asset size to S$ 1 billion and
a real will invest in integrated
estate development fund development projects in India
with a term
of eight years
Tanglin Raised funds from Hypo Rs 3.8 billion The fund will be used for
Development Real Estate financing and development of 2
Bank International msf of additional IT office space
at Global Tech Park in
Bangalore
Red Ribbon UK Plans to invest £ 250 million £ 250 million Of this, the fund will invest £ 50
Fund, a in the million in budget hotel chains, £
UK-based property real estate sector in India in 50 million to develop resorts in
investor the next 5 Kerala, £ 50 million in student
years accommodation, and £ 100
million in commercial properties

Expected Capital
Name of Fund Size Additional Details
Entity
CapitaLand Plans to launch a fund to S$ 500 million –
invest in real estate projects
in India