Milestone Domestic Scheme - III

Transcription

1 Milestone Domestic Scheme - III Newsletter for Quarter ended September 2015 AN ISO 9001:2008 CERTIFIED COMPANY Dear Investors, We are pleased to share with you our fund update on Milestone Domestic Scheme-III (The Fund) for the quarter July September Reserve Bank of India (RBI) has cut the repo rate by 50 bps recently taking the total rate cut to 125 bps since January This is expected to improve the investment cycle and with Government s pro-business focus, and control in inflation, it is expected to lead to an economic revival. Residential real estate demand has remained sluggish over last months and continues to remain subdued as reflected in the launch of new residential units falling by 41.3% from 59,136 units in Q to 34,700 units in Q (Source: Propequity). The silver lining is that absorption of commercial office space has increased 11% for 9M 2015 over 9M 2014 and typically residential demand improves with a lag to recovery in commercial office demand. This coupled with stable prices and lowering interest rates are likely to trigger an uptick in the end user demand in coming quarters. During this quarter, the Fund has partially divested from its investment with Richa Realtors, Mumbai and Hubtown, Mumbai and received proceeds (including income) of Rs 40.0 crores and Rs 27.2 crores respectively. The Fund has also received regular coupon payments from its other investments. This has been paid out to you in the 12 th distribution of Rs 71.0 crores made in August I thank you all for the continued support. Nitin Goel Managing Real Estate Investments Portfolio updates investments in Richa Realtors, Mumbai and Hubtown, Mumbai aggregating to Rs 67.2 crores in this quarter. Proposed Action in the first half of October.

2 Milestone Domestic Scheme - III Newsletter for Quarter ended September 2015 FUND SUMMARY AS ON SEPTEMBER 30, 2015 Funds Received Rs Crores Final Closing Date 31st January 2012 Term 3.5 years + 1 year + 1 year No. of Investments 10 Rs Crores Capital Divested Rs Crores Income Generated (Pre-tax) Rs Crores Total Divested Amount Rs Crores (70%) PORTFOLIO EXIT DETAILS AS ON SEPTEMBER 30, 2015 RS. CRORES No. Project Capital Capital Income Total % Capital Invested Divested Generated Exit Divested (Pre Tax, Pre expenses) (A) (B) (C) (B+C) 1 Hubtown, Andheri, Mumbai % (Ackruti City Ltd.) 2 Richa Realtors Mulund, Mumbai % 3 Land Marvel Velachery, Chennai Land Marvel 2 Kotivakka, & Thaiyur, Chennai 5 Hanging Garden Hebbal, Bengaluru Signature Dahisar, Mumbai ATS Group Greater Noida, NCR % 8 Pelican Realty Puducherry Landmark Torrence Chennai FULLY EXITED INVESTMENTS 10 Jain Heights & C.V. Raman Nagar, % Structures Pvt. Ltd. Bengaluru Total

3 Hubtown, Mumbai Andheri, Mumbai Hubtown Limited* Rs Crores Initial Investment Date March ,523 sq ft (approximately) Expected Rate of Return 20.00% IRR *Previously known as Ackruti City Ltd The Fund has invested in Hubtown Limited by way of non convertible debentures. The Fund has mortgage of ready commercial office property Ackruti Star in Andheri (East) - Mumbai, having a total area of 122,523 sq. ft. Company has further paid Rs 4.0 crores towards outstanding dues and is also pursuing sale of the balance area in Akruti Star. The Fund expects to exit this investment by mid 2016 Richa Realtors, Mumbai Mulund, Mumbai Richa Realtors Rs Crores Initial Investment Date October ,150,000 sq ft (approximately) Expected Rate of Return 22.50% p. a. (Simple Interest) The Fund has made an investment in a redevelopment project of a large housing colony on the Eastern Express Highway in Mulund (E), Mumbai. TATA Housing is developing the project as JDA partner of Richa in the project. Richa made part repayment of Rs 40.0 crores from the amount received from Tata Housing (JDA partner). This enabled an exit of 50% of capital at a simple interest of 22.5% per annum. Balance capital is expected to be paid over the next 18 months. Land Marvel - Velachery, Chennai Velachery, Chennai Ramaniyam Group Rs Crores Initial Investment Date November ,000 sq ft (approximately) Expected Rate of Return 22.00% IRR The Fund invested in a residential project in a joint venture with Ramaniyam Group through an SPV viz. Amarneedhi Realtors Private Limited. The SPV entered into a joint development agreement with Land Marvel Homes to develop the 1.25 acres of land with total saleable area of 180,000 sq. ft (to be shared by developer and land owner). The project has been delayed as the road width and other approvals have still not been obtained. The Fund is actively engaged with the developer to ensure repayment of dues. In parallel, the Fund is also exploring sale of developer s share of the land to third parties in order to achieve exit.

4 Land Marvel - Kottivakkam & Thaiyur, Chennai Kottivakkam & Thaiyur, Chennai Land Marvel Investment Amount Rs Crores Initial Investment Date July ,000 sq ft (approximately) Expected Rate of Return 24.00% IRR The Fund has invested in two residential projects at Kottivakkam and Thaiyur through subscription of debentures of the SPV developing these projects. At Thaiyur, the project will cater mainly to the mid-income group. At Kottivakkam, the project is planned as a high-rise premium residential development consisting 2/3/4 BHK units with modern amenities. The Fund is actively working on various strategies to achieve exit and exploring JDA/outright sale proposals for the project lands. Hanging Garden - Hebbal, Bengaluru Hebbal, Bengaluru Prisha Properties Rs Crores Initial Investment Date February ,000 sq ft (approximately) Expected Rate of Return 24.00% IRR Investment has been made by the Fund into the Company, by way of Optionally Convertible Debentures. The Project is located in Hebbal, Bengaluru and comprises total saleable residential area of 295, 000 sq ft. The construction work is going on at the site and sales have picked up marginally over the last few quarters. The Fund is working with the developer to obtain partial exit through refinancing and we expect full exit over the next months. Signature - Dahisar, Mumbai Dahisar, Mumbai Chaubey Realties Pvt. Ltd. (CRPL) Rs Crores Initial Investment Date March ,000 sq ft (approximately) Expected Rate of Return 23.00% IRR The Fund has invested in CRPL through subscription of optionally convertible debentures for a period of 36 months. The Fund has invested in a residential project Signature, located in Dahisar East catering to the mid income group consisting of 1/1.5/2 BHK units with modern amenities. Delay in receipt of certain approvals has led to delays in providing possession to the rehab tenants and construction of the sale building. However, the micro market is witnessing upturn in sales and current prices are far higher than our assumptions.

5 ATS Dolce - Greater Noida, NCR Sector Zeta 1, Greater Noida ATS Group Rs Crores Initial Investment Date November ,414,410 sq ft (approximately) Expected Rate of Return 23% IRR (part exit completed for Rs 65cr) The Fund has invested Rs 98.5 crores in Domus Greens Private Limited, an SPV of the ATS group in two tranches of Rs. 65 crores (in November 2013) and Rs crores (in Novemeber 2014). Company is developing a mid residential project ATS Dolce in Sector Zeta I, Greater Noida. consisting of 2 and 3 BHK units with all modern amenities. The project consists of 13 towers of floors each and 14 independent row houses. The Project is being executed in two phases of 1.3 and 1.1 million sq. ft. Construction of seven towers of Phase 1 is in full swing. Company has sold approx. 40% of the total saleable area till September Company has been regular in servicing the quarterly interest payment. Belfort - Puducherry Puducherry Pelican Group Rs Crores Initial Investment Date March ,000 sq ft (approximately) Expected Rate of Return 22.50% IRR The Fund has invested Rs crores in Pelican Realty Projects Pvt. Ltd (Pelican Realty) through Optionally Fully Convertible Debentures (OFCDs) for development of a senior living and an affordable housing project. The project is spread over 52 acres in Bahour, Puducherry. Pelican Realty is a reputed developer in Tamil Nadu/ Puducherry and has also developed projects in locations such as Trichy, Chennai, Madurai & Kodaikanal. For the development of senior living component, Pelican Realty has entered into an agreement for 50% of plots with Serene Senior Living. The senior living component is being developed as an integrated mini township with amenities/facilities for senior citizens. Project Status Company has sold 426 plots till date and of the area mortgaged to the Fund, 16,000 sq ft has been sold. The Company has been regular in servicing its coupon payouts.

6 Landmark Torrence Chennai Perungudi, Chennai Landmark Group Rs Crores Initial Investment Date June ,30,000 sq ft (approximately) Expected Rate of Return 22.50% IRR The Fund has invested Rs crores in Landmark Housing Projects India Pvt. Ltd (Landmark India) through Optionally Fully Convertible Debentures (OFCDs) for development of a mid segment residential project in Perungudi, Chennai. The project is located close to the OMR Toll plaza and is spread over 4.2 acres. The project consists of 4 residential towers of 19 floors comprising of 596 apartments (374 2BHK apartments and BHK apartments) The Fund has exclusive mortgage of project land and all receivables along with personal guarantee of the promoter and corporate guarantee of Landmark Chennai. In addition, the Fund also has pledge of 100% shares of Landmark India owned by the Promoters. Project Status Majority of the approvals including Environmental Clearance, Fire/Airport/Traffic department NOCs, Multi-Storied Building approval have been obtained. Developer will commence construction post obtaining the building permit from Corporation of Chennai, which is expected by early The Developer is expected to commence sales of units of the project in the festive season in November For Queries Contact: info@milestonecapital.in OR Call CAMS : /92, /92 Write to: Computer Age Management Services Pvt. Ltd. (CAMS) Unit : Milestone. No.178/10, Kodambakkam High Road, Opp. Hotel Palmgrove, Nungambakkam, Chennai MILESTONE CAPITAL ADVISORS LIMITED 602, Hallmark Business Plaza, Sant Dhyaneshwar Marg, Opp. Guru Nanak Hospital Bandra (East), Mumbai India. info@milestonecapital.in, website: Disclaimer: The contents of this bulletin is for information purpose only and should not be construed as advice, representation or warranties from Milestone Group. Milestone Group will not be liable for any loss or damage whatsoever arising as a result of any person acting or refraining from acting in reliance on any information contained therein or anything stated or omitted to be stated herein or for any other reason whatsoever. Milestone Group accepts no liability for any errors, misprints, inaccuracy or omission in this publication.