REIT Road Cracks For Realtors

MUMBAI: It’s second-time unlucky for Indian realtors hoping to garner some desperately needed cash by floating their real estate investment trusts in Singapore.

On 5th june, Indiabulls Real Estate said its plans to float a Reit to mop up $286 million is being extended. Analysts said this was due to very poor response from retail investors.

The Reit had opened on 2nd june and was supposed to close on 5th june but now will close on 6th june following a last-ditch attempt to gather investors.
Ajit Mittal, chief executive officer of Indiabulls Properties, however, said the issue has been oversubscribed.

“We are extending it because merchant bankers said many retail investors from Malaysia, Indonesia and nearby countries want to invest”.

Unitech, India’s No. 2 realtor, had earlier pulled its plan to raise $700 million similarly.
Indiabulls couldn’t sell the mandatory minimum 1,000 units — it managed just one-third of it, which is why it had to extend, a source familiar with the situation said. Indiabulls Properties Investment Trust, the entity floating, had offered an attractive yield of 9.8% on the issue.

But the institutional portion of the issue saw good interest, and was oversubscribed by 1.8 times.

David Lum, an analyst at Daiwa Institute of Research Singapore, said the market conditions are pretty delicate and most issuers are pretty cautious.

The ones that were launched late last year haven’t been doing well. The subprime situation has to be over.”

Indiabulls plans to list its Elphinstone and Jupiter Mills properties in Lower Parel with an area of 3.4 million sq ft.

“We remain apprehensive about Indiabulls’ plans to list its Elphinstone and Jupiter properties in Singapore in the current market conditions,” Sandeep Mathew, an analyst at BNP Paribas India Solutions, said in a note to clients on May 23. “A strong balance sheet indicates that the listing is more of an effort to return cash to promoters.”

Lakshmi Niwas Mittal, steel baron and the world’s richest Indian, is the anchor investor in the issue, having bought 91 million shares. Merrill Lynch and Deutsche Bank AG are the bookrunners of the issue.

One Comment

  1. Posted June 9, 2008 at 4:54 am | Permalink

    If I were an employee, I would certainly be thinking about retirement. Worrying about retirement and social security has become an increasing concern for many. The stock market, 401 K, insurance, and good old fashion savings are all means people take to secure their financial freedom when it comes to the 65 plus years. An ideal investment strategy is one that comes with low risks and high returns. Good old fashion savings will not give you high returns, and stock market games are not often associated with low risks. Investing in land is one that that comes with both low risks and high returns if you play your cards right and you do not need to be independently wealthy to get into this industry. Investing in land is one of the smartest things anyone can do to increase their net worth and financial freedom. Investors with small or large capitals are smart to invest in land for a variety of reasons. Land property is an investment that offers consistent returns that are safer than other investments, and always appreciate in value.Knowing how and when to act with land investments can be done with the aid of a realtor in the area you are interested in. Avoid fresher’s who might actually be able to get you the best deals, but will inspire lesser confidence. Realtors know land the way a banker knows money, and they will always work with you to ensure your dollar is maximized. Now is the time to start thinking about it. Do not get into land investment without doing deep homework.For more view-

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  1. […] fund its growth mainly from internal resources such as the sale of non-core assets and listing of REITs, and will control loans from banks. This entry was written by Rajani, posted on June 24, 2008 at […]

  2. […] slackening, this move will lead to more slowdown,” said Ramesh Jogani, managing director at India REIT Fund Advisors, which has invested in several projects. “We see a 15-20 % fall in […]

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