INRnews - Indian Real Estate & Property News

Dev intends to dispose of its entire interest in two development projects, the Jupiter Mills and Elphinstone Mills Projects (the Projects).  The proposed transaction will be structured as a sale of Dev's entire 13 per cent. interest in each of the following project special purpose vehicles (SPVs): Indiabulls Properties Private Limited and Indiabulls Real Estate Company Private Limited.

Dev's interests in the SPVs will be sold to wholly-owned subsidiaries of Indiabulls Properties Investment Trust (IPIT), a Singapore-based investment trust with the principal objective of investing in office space in India.  IPIT intends to finance the acquisition of Dev's interests in the Projects by offering units representing undivided interests in IPIT (Units) through an international placement to investors and an offering to the public of Singapore.

Part of the consideration paid for the Dev's interests in the Projects will be satisfied by IPIT issuing Units to the relevant subsidiaries of the Company. The cash component of the consideration will constitute at least 20 per cent of the total consideration received by the Company.

The proposed transaction is currently expected to complete by 1 March 2008. Completion of the transaction will be subject to IPIT raising sufficient funds to pay the cash component of the Minimum Consideration.

The initial investment paid by the Company for its interests in the two Projects was approximately £82.7 million. The Minimum Consideration payable to the Company represents an average internal rate of return of 35 per cent on the initial investment (before the payment of the relevant performance fees to the Investment Manager and deduction of expenses incurred by the Company and assuming the transaction is completed on 1 March 2008).

Rishi Khosla, chairman of Dev Property Development PLC stated: "At the time of IPO we announced that a possible strategy to maximise return on investments might include the sale of the Company's interests in its development projects. Today's announcement highlights our ability to implement this strategy in order to create shareholder value and opens up promising opportunities for future reinvestment".

Jupiter Mills, a site located between two business districts near central Mumbai, is being developed by Indiabulls Properties Private Limited as an integrated project with two components: a commercial element comprising an IT park (which includes a retail space/mall) and a residential element which cover a combined 11.1 acres; 9.7 acres making up the commercial component and the residential component comprising of 1.4 acres. Indiabulls Properties Private Limited is awaiting the final approval of its industrial park status from the Government of India. Jupiter Mills has a planned total 1,433,000 sq ft of lettable office space, 438,000 sq ft of lettable retail space, a residential element comprising 119,000 sq ft of saleable area and 3,500 carparks to be completed by 31 December 2008. At 27 December 2007, Jupiter Mills had entered into letters of intent (LOIs) in respect of approximately 644,000 sq ft, 34 per cent. of lettable area for Jupiter Mill when fully completed. The tenant profile of Jupiter Mills is diverse and is expected to include banks, financial institutions, large corporates and high end retailers. With regard to the residential component of the business, all units in the residential building are expected to be sold.

The Elphinstone Mills site which is being developed by Indiabulls Real Estate Company Private Limited (IRECPL) is located on 7.8 acres in Lower Parel in close proximity to Jupiter Mills.

Approval has been received from the Ministry of Commerce and Industry of the Government of India to establish an industrial park and an approval from the State of Maharashtra to establish an IT park at the project site in April 2006 and September 2006 respectively. IRECPL has made an application to the Government of India for renewal of its approval for its industrial park status.

It is expected that Elphinstone Mills shall have a total of 1,536,000 sq ft of lettable office space and 3,000 car parks to be completed post-listing of Indiabulls Properties Investment Trust by 30 November 2008.

IPIT is a proposed Singapore-based business trust to be established with the principal objectives of investing, either directly or indirectly, primarily in income-producing office space in India; acquiring and developing primarily office space in India with the intention of holding such properties upon completion; and investing in real-estate related assets.