India Real Estate Monitor » Memorandum Of Understanding

BSEL to float Malaysian arm to execute projects

rajani — Tue, 20 May 2008 10:28:43 +0000

Mumbai-based firm will invest Rs 18,000 crore in next twelve years. BSEL Infrastructure Realty plans to set up a company in Malaysia to execute its operations in that country.
The Mumbai-based company has signed a memorandum of understanding (MOU) with Malaysia’s Iskandar Regional Development Authority (IRDA) to develop properties in Johar Bharu region of Malaysia. The company has plans to invest Rs 18,000 crore in the next twelve years.
The new company will be either made a supplementary of BSEL Infrastructure Realty, or its UAE subsidiary BSEL Infrastructure Realty FZE.
Dharmendra Raichura, managing director, BSEL, said that the company will use the proceeds from UAE projects to finance the Malaysian projects. The company generated revenues of three hundred crore rupees in 2007-08 from the UAE operations and expects to make seven hundred crore rupees in the recent financial year. BSEL will borrow funds to finance the projects.
The company will develop seventy million sq ft of space in three phases with ten million sq ft in the first phase and double in every subsequent phase. It will invest Rs 2,500 crore in the first phase and Rs 5,000 crore in the next phase.
Raichura said the company expects returns of 35- 40 % from the project. Private equity companies invest in realty projects in India with expectations of 25-30 % rate on investment.
“Johar Bharu is a 25-minute drive from Central Singapore, where property prices are 25 times more than the rest of the country. The authority plans to transform Johar Bharu into the next hot spot after Singapore in five to seven years. That is why we chose that city,” Raichura said.
BSEL will get a tax holiday on land sales and premises sales till 2015 and exemption on rental income till 2020.

Deyaar Of Dubai Cancels Indian Realty Deal

rajani — Fri, 09 May 2008 10:10:51 +0000

DUBAI: Dubai’s third-largest traded real estate company Deyaar Development Co said 7th may that a deal to develop projects with India’s Ansal Properties & Infrastructure has been canceled.
“The memorandum of understanding between Deyaar and Ansal Properties to develop a project in India has been terminated by mutual consent,” Nasser al-Sheikh said in a statement on the Dubai bourse website.
The announcement comes amid a financial investigation into alleged embezzlement at the company, which has already led to the detention of it’s former chief executive Zack Shahin and three other people in connection with the probe. Deyaar shares closed flat at 2.37 UAE dirhams ($0.64), after falling intraday to 2.31 dirhams. The stock is down almost twenty per cent this year.
Ansal shares ended down 0.7 per cent to Rs172.95 on the Bombay Stock Exchange. Termination of the agreement came into effect from 7th may, Deyaar said in the statement.
Deyaar had granted to take up to forty per cent stake in a project to develop a township comprising of residential and commercial real estate in India, as par an Ansal disclosure previous year posted on the Bombay Stock Exchange website.
The company, which said in November it was thinking over a five billion dollar real estate project in India, added that it still plans enter the market and is in discussions with other prospective associates.

Ispat Industry Sells Flats in Mumbai

rajani — Mon, 28 Jan 2008 12:51:54 +0000

18 January 2008, New Delhi. Ispat Industries is informally entering in to real estate industry. Ispat industry is known as a major steel producer industry and now they are planning to sell its property at Mumbai’s Peddar Road at a rate of about Rs 50,000 per sq. ft. Mr. Vinod garg, Executive director (marketing), has cleared “It is one of the prime locations in the city and we are expecting valuations of about Rs 50,000 per sq ft”. Further he added, “Our strength is steel and power and we want to be restricted to that”. It has mentioned very clearly that company has no plans of getting into the real estate business at present.

The company is planning to either sell the property as duplex flats of 8000 sq ft in 40 crores or as single flats 4,000 sq ft in 20 crore.

The company is in talks with property consultant Cushman and Wakefield for sale of the 112,000 sq ft residential property it has developed. The going rate in the area is close to Rs 50,000 per sq ft and the company hopes to realize similar rates.

It has signed memorandum of understanding (MoU) with the Chattisgarh government for setting up a thermal power plant with a capacity of 1,200 mw and another with Maharashtra for setting up a 1,000 mw power plant. Construction of a 110 mw captive power plant at Dolvi (Maharashtra) plant is underway.