KOLKATA: Keppel Land, a Singapore-based real estate firm that invested in Bengal's booming real estate sector just before trouble erupted over land acquisition in Singur and Nandigram in mid-2006, exited the state on Tuesday after being frustrated by lack of growth options and surmounting local complications. A consortium of local developers have grabbed the rare opportunity of a land parcel in New Town and struck the deal for Rs 150 crore.
Though Keppel Land had joined hands with Indian companies Magnus Estates & Hotels Ltd to develop upmarket condominium complex christened Elita Garden Vista in New Town Action Area III, it could not manage the situation and offloaded the entire stake to Kolkata-based real estate firms Sureka, Merlin, JB after completing the first phase. Keppel is developing another project in Bangalore on its own.
The local consortium will now invest Rs 600 crore to develop the remaining 13 acre in two phases. "We are excited about the prospect of developing 13 lakh sq ft comprising multiple towers (15?32 storeys) and 1.6 lakh sq ft of developed commercial space. Law firm Fox Mandal and chartered accountancy firm SK Agarwal & Co acted as advisors to the transaction that took nearly eight months to seal. Keppel Land had earlier sold another 16 acre land meant for IT in New Town to Mani Group
An industry source said Keppel Magnus had been struggling with depressed market conditions that stymied hopes of appreciation in its premium project. Nor did it see any hope of growing in Bengal as the Mamata Banerjee government adopted a hands-off policy on land.
"It is extremely difficult for an overseas company to aggregate land the way Indian companies can. In addition, the Singapore-based company with operations in China, Vietnam, Indonesia, Philippines, Sri Lanka and West Asia found it difficult to operate as pressure from rival building material supply syndicates build up," the source said.
Pradip Sureka, managing director of Sureka Group, one of the companies that has bought Keppel Magus Development (KMD), acknowledged that the Singapore company had a tough time handling the local situation. "Real estate is a very localized business. Keppel Land was also struggling to keep costs down," he said.
Merlin Group managing director Sushil Mohta, too, felt handling the situation in any Indian city was quite a handful for any outsider. "Even national players like Emaar-MGF and DLF haven't done very well in Kolkata because they do not have the local experience," he said.
Mohta, Sureka and JB Group director Rajendra Bachhawat are delighted to lay their hands on the land parcel in New Town where the government had not allocated any fresh land in three years. "To get a sanctioned project with ready land in a place like New Town is huge for us," Bachhawat said.
While the trio celebrated the acquisition, Abhijit Das, office director (east) at international realtor Cushman & Wakefield, felt the message that Keppel Land's exit sent out was not a healthy one. "When an international player moves out, it signals lack of opportunity. Their presence would have given others confidence to invest in the market. Also, the market loses out on best practices and value additions," he reasoned.