Sunteck Realty rises high in uneven Mumbai
Apr 05, 2014
Source : The Economic Times

 

MUMBAI: In Mumbai's real estate sector, Sunteck Realty stands apart. The company based in and focused on Mumbai has seen interest from major investors at a time most experts and analysts have negative views on the city's realtors. Ajay Piramal is among the latest to join its investor list. Kotak Realty fund holds an 8% stake in Sunteck, while other investors include US-based College Retirement Fund with a 3.2% holding and Singapore's Tree-Line Asia fund with a 1% stake.
Promoter Kamal Khetan holds close to 74%. The company's financial performance explains the strong investor interest. Between 2008 and 2013, the company has done total sales of Rs 3,000 crore as against less than Rs 100 crore in 2007.
It has achieved this without leveraging its balance sheet much, unlike most other Mumbai developers who are grappling with low sales and heavy debt. "Our focus on Mumbai-centric projects with immediate cash flows has helped. Also, we have been very selective in land acquisition and preferred private equity investments over debt," said Khetan. In 2007, when the Mumbai Metropolitan Region Development Authority invited bids for its plots in the upmarket commercial district of Bandra-Kurla Complex (BKC), Sunteck was the only company that opted for residential plots - all others bid for plots to build commercial projects.
"My observation was that in any business district, the residential segment always commands premium over commercial, whether it's Manhattan, Hong Kong or NCPA in Mumbai," Khetan said. One of the BKC plots which he bought for Rs 140 crore in 2007 and converted into a residential project, Signature Island, is valued at Rs 1,000 crore by analysts. It has two more similar projects at BKC, each valued around Rs 700 crore.
About 65% of the inventory is already sold - buyers include former Citigroup chief executive Vikram Pandit, industrialist Gautum Adani and investment banker Nimesh Kampani - and the remaining is held by the company as it believes the premium will go higher once the projects are completed. "Kamal Khetan has been very smart in land acquisition. His land cost to total sales is one of the lowest among Mumbai realtors," a leading real-estate consultant said. "He has never gone for trophy properties but has still managed to create high luxury projects."
Apart from BKC, which accounts for about two-thirds of the company's asset value, it has a major project in the suburban Goregaon area, where realty prices have risen more than most other locations in Mumbai. Sunteck is also working on several other projects, some in joint venture with the Piramal Group.
The company is now at an inflection point as the Rs 3,000 crore of sales it achieved will start reflecting in its income statements in a staggered manner over three years with delivery of projects. The company has already received Rs 1,600 crore and has paid an advance tax of Rs 75 crore, compared with just Rs 6 crore in fiscal 2013. It records sales and profits of a project only after the project is complete. "From existing sales, we see growth of at least 25-30% over the next 2-3 years," said Khetan.







 

Latest Realty News

National Housing Bank seeks to allow lenders to get 90% property value as home loan
Apr 03, 2014
MUMBAI: The National Housing Bank is considering a proposal that seeks to allow lenders to give up to 90% of the property value as home loan. The proposal is for above Rs 20 lakh loans that carry mortgage guarantee cover.
SBI extends special home loan scheme indefinitely
Apr 03, 2014
MUMBAI: Nation's largest lender State Bank of India, which is also the largest home loan player, on Wednesday extended the date of special home loan rates for new and women borrowers beyond March 31 for an indefinite period.
Property tax collection up by 14% in Nashik
Apr 03, 2014
NASHIK: The property tax collected by the Nashik Municipal Corporation (NMC) has increased by 14.37% during the current financial year 2013-14 as compared to last year's figures.
Improved investment flows into logistics sector envisaged
Apr 03, 2014
MUMBAI: Investment inflows to the logistics sector have improved, following India’s economic impetus in the second half of 2013. At the same time, however, property rental values remained under pressure across certain industrial markets, according to CBRE’s latest report – India Logistics Market View – H2 2013.
AMC's tax recovery touches Rs 90 crore mark
Apr 02, 2014
AURANGABAD: The Aurangabad Municipal Corporation (AMC) on Monday concluded its tax recovery drive after collecting close to Rs 90 crore on account of property tax and water charges for the 2013-14 financial year.
Helion may lead $8m investment in Housing.com
Apr 02, 2014
MUMBAI: Early- to mid-stage, India-focused venture fund Helion Venture Partners may lead an $8 million investment round in Mumbai-based Housing.com, one of the country's hottest technology startups.
Exploring options in emerging cities for investment in commercial realty
Apr 02, 2014
PUNE: The slowdown in major real estate cities of India, has resulted in the emergence of new markets around tier-II cities. Higher costs, liquidity problems and falling investor interest, have diverted the developers and investors, to explore new markets in the country. The immense potential in emerging cities like Indore, Ahmedabad, Nagpur, etc., has drawn a lot of attention from real estate buyers and developers. Experts believe that emerging markets have a lot of potential to deliver in the
Gudi Padwa creating positive sentiments
Apr 02, 2014
MUMBAI: Gudi Padwa is considered as an auspicious time to invest in real estate, by Hindus. The festival signifies new beginnings and is usually earmarked for major purchase decisions including home buying, and holds a lot of prominence for developers in Maharashtra. Considered a time of renewal, it also coincides with Punjab’s Baisakhi, Tamil Nadu’s Puthandu, Andhra Pradesh’s Yugadi and Kerala’s Vishu
Kolte-Patil, ASK Property acquire Pune land parcel for Rs 160 crore
Apr 02, 2014
MUMBAI: Pune-based Kolte-Patil DevelopersBSE 2.64 % and realty fund ASK Property Investment Advisors have jointly acquired a 30-acre land parcel at Kondhwa in Pune for around Rs 160 crore, top executives of the two firms said.
10 more days for property tax recovery even as fiscal year ends
Apr 01, 2014
KOLHAPUR: The Kolhapur Municipal Corporation (KMC) has extended the recovery period for property tax for ten more days though the financial year ended on March 31.

Latest Realty News Of State

Realty Talk's