MUMBAI: Realty developer Lodha Group is looking at buying more properties in central London after picking up MacDonald House from the Canadian Government in the city for over 300 million pounds or Rs 3,000 crore.
"We plan to focus on Mumbai and London as our two main markets...We are looking at buying more properties in central London particularly residential and commercial ones, not hotel assets," said Abhinandan Lodha, deputy MD of Lodha Group.
Lodha Group, however, may not be keen on other European cities as a market, he added. The company has already picked up an office spread over 1,000 sq ft at Eaton Square in London to house its UK business' office.
Lodha Group is the first Indian developer to acquire a ready property overseas for a realty project development, while there are few that have already executed project in foreign countries on acquired land parcels.
The company has made initial payment of Rs 300 crore or around 10% as first tranche of entire consideration and while the company is hoping to pay balance by January end.
The developer is planning to fund the transaction through internal accruals and is not looking to raise debt or induct a private equity player "at this time," Lodha said.
The company has clocked revenue of Rs 8,700 crore for 2012-13 (April-March) and Rs 14,500 crore for six months ended September 2013, he added.
The developer is also exploring options for hedging entire consideration of over 300 million pounds. The deal is currently pegged at Rs 102/pound. "We will decide on the hedge over the next couple of weeks," Lodha said.
The company is aiming to launch the London project in 6-9 months and is hopeful of fetching 20% internal rate of return over the next 4-5 years. When asked if projects approvals are easy to come by in this new market for the company, Lodha said the procedures are standardized there and it will not be a challenge.