INRnews - Indian Real Estate News

This project sees Trinity playing a major role in Indian Prime Minister Manmohan Singh’s campaign to transform Mumbai into a City with global living, housing and infrastructure standards. Major initiatives in the area by the Government include: the development of low and middle income housing, the £1.3 billion Mumbai-Delhi Dedicated Freight Corridor railway project and the £139 million Brihanmumbai Storm Water Drainage project.

The key details of the transaction are as follows:
• The venture is the development of a condominium project in central Mumbai. The project will develop a total of 1.37 million sq ft of residential space.
• The project is being developed, constructed and marketed by Lokhandwala Builders.
• Construction is scheduled to start in early 2007 and is expected to complete in 2009. Off-plan sales are expected to commence with the start of the construction phases.
• The total cost of the development is expected to be £55.6 million. Estimated IRR exceeds the investment criteria set out at the time of the IPO.
• Demand for new housing, in particular, low-income housing, is such that Mumbai is likely to witness an increasing number of developments. Together Trinity Capital and Lokhandwala Builders are well positioned to undertake many similar projects in the future.

Mumbai’s real estate market
• Mumbai is a highly attractive proposition for real estate investors, with an inadequate supply of land for construction being the key factor behind the soaring property prices over the past few years. The price of residential real estate is the highest in India.
• The McKinsey Report on redeveloping Mumbai, 2003, states that, the current initiatives directed towards low income housing will create a supply of less than 150,000 units over the next ten years, leaving a huge shortfall of 950,000 low-income
housing units over the next decade.
• At the upper end of the market, the current upward trend in the real estate market has led to an increase in the supply of residential properties in Mumbai. Upcoming new residential complexes in prime areas in the city and the suburbs have emerged
as the preferred locations for residential development in Mumbai.
• Currently, development projects targeting the middle-income and high-income segments, which include luxury condominiums and penthouses across the city, sell out, on average, within six months of launch.

About Lokhandwala Builders
• Lokhandwala Builders has established itself in the Indian real estate market over the last 20 years, and has particular expertise in residential developments. The Group has created a niche position in the industry by venturing successfully into low-income redevelopments. The core competitive strengths of the group are its proven ability to assess the potential of a project, early mover advantage and a professional and competent team on the ground to execute projects efficiently.

Moiz Lokhandwala, Managing Director, Lokhandwala Builders said “The Mumbai real estate market is an exciting place to invest given the economic activity and net migration to the City each year. Our relationship with Trinity Capital will allow us to further consolidate our position in the market”.

Rak Chugh, Managing Director, Trikona Capital, said, “This is a significant strategic partnership with an established developer, which has proven expertise in this sector. As stated previously, we believe the partnership approach will generate significant advantages for Trinity. In August we announced our $100 million partnership with IL&FS for investments in real estate and infrastructure, and we expect to announce similar ventures in the near future specialising in other sectors.”

About Trinity Capital

Trinity Capital PLC (“Trinity”), was created in 2006 for the purpose of investing in real estate and real estate related entities across India, with a focus on the office, retail, hospitality and, to a lesser extent, residential sectors.