Real Estate Newsletter - December 01 to 05, 2014

Reliance Communications and Lodha Group Dollar bonds were called off after fund raising plans failed to generate response among US-based investors, according to reports.

Dec 05, 2014 10:12 IST India Infoline News Service

Top News
 
Sahara sells Gurgaon land worth Rs 1,211 cr to M3M
Sahara has sold land parcel worth Rs 1,211 crore to Gurgaon-based developer M3M India Ltd, says report.
 
Report stated that the 185-acre land in Gurgaon, would be used for mix-use development.
 
M3M India Director Pankaj Bansal stated that the entire amount will be paid in instalments over a period of six months.
 
The deal comes within days of Supreme Court permitting the Sahara Group to proceed with the sale of four domestic properties.
 
HDIL clarifies reports on irregularities in Bandra slum rehabilitation project
The Exchange had sought clarification from Housing Development and Infrastructure Ltd with respect to news appearing on Zee News website on December 03, 2014 titled "SRA project irregularities: FIR against govt, HDIL officials."
 
Housing Development and Infrastructure Ltd replied stating "This is regarding newspaper articles published today in respect to F.I.R. having been filed against Government Officials, SRA Officials, the Company and its Directors in the Project approved under SRA Scheme in Motilal Nehru Nagar, Bandra (East) in the year 2005-06. The eligibility under the Scheme is decided by the concerned Statutory Authority and the Company has no role to play.
 
This is a frivolous attempt to malign the reputation of the Company and its Directors and as such Company will take appropriate legal action including quashing of the FIR."
 
RCOM, Lodha Group Dollar bonds called off
Reliance Communications and Lodha Group Dollar bonds were called off after fund raising plans failed to generate response among US-based investors, according to reports. Report said that this move came due to poor market conditions and pricing issues. Lodha was planning to raise $350 mn and Reliance Communication was to raise $225 million from their debut US dollar bonds, reports added.
 
RCom had launched its 5 year bonds on Monday with an initial price guidance in the 6.5% area. A day later, Lodha offered 5 year bonds at a mid-high 10% initial guidance. Lodha Developers had appointed Bank of America Merrill Lynch and JP Morgan as bankers for the bonds.
 
Domestic News
 
Fitch assigns 'B+(EXP)' to Lodha Developers' US Dollar Notes
Fitch Ratings has assigned India-based Lodha Developers Private Limited's (Lodha) US dollar denominated notes an expected rating of 'B+(EXP)' and Recovery Rating of 'RR4'. The notes will be issued by Lodha Developers International (Mauritius) Limited (Lodha Mauritius) and guaranteed by Lodha.
 
The final rating on the notes is contingent upon the receipt of final documents conforming to information already received.
 
Lodha Mauritius is a wholly owned subsidiary of Lodha, and its proposed notes will be unconditionally and irrevocably guaranteed by Lodha and its key subsidiaries. The notes will rank pari passu with existing and future senior unsecured indebtedness of Lodha and its key subsidiaries. However as of the date of the indenture, only group companies that together account for 40% of consolidated EBITDA would extend guarantees to the notes, while the remaining material subsidiaries (defined in the indenture as those which account for at least 5% of consolidated EBITDA or 5% of consolidated net worth each) as of this date will be added on as guarantors within a span of six months. Subsidiaries that are not material as of the indenture date will be added on as guarantors as and when they pass the materiality test in future.
 
CREDAI Chief demands Government intervention for low cost funding of real estate
Expressing disappointment at the RBI's monetary policy of maintaining status quo on repo rates, CREDAI Chief Lalit Kumar Jain, has called for government intervention to facilitate low cost funding for real estate developers and buyers.
 
"For a long time RBI has been consistently taking steps that do not encourage real estate sector despite the well recognized fact that the industry contributes handsomely to the country's GDP, apart from creating massive employment," he said.
 
In a situation where country's economy needs a big boost and the overall growth needs to be given top priority, one would have expected the RBI to tow the government policy to encourage affordable housing in a big way.
 
Omaxe plans to raise Rs500 crores
Omaxe Ltd has announced that the Board of Directors of the Company at its meeting held on December 02, 2014 has considered and approved the Issuance of Secured Non-Convertible Redeemable Debentures and/or other Debt Securities for an aggregate amount of Rs. 500,00,00,000/- (Rupees Five Hundred Crores only) in one or more tranche and constituted a Committee and delegated the powers for further actions in this regard.
 
Essel Group acquires property in Mumbai
 
Essel Group has acquired 2.20 lakh square feet commercial space in Marathon Futurex complex at Lower Parel in Mumbai, according to reports. Report stated that the deal may be valued at over Rs 400 crore.
 
The group will be shifting headquarters from Worli to new office spread over top seven floors of Marathon Realty's tower II. This is the second largest outright commercial space transaction based on both area and value terms.
 
DLF plans to sell 50% in Cyber City: reports
Real estate major, DLF is reportedly planning to sell 50% of its subsidiary, DLF Cyber City Developers (DCCD) to raise over Rs 3,500 crores, says report. The company is in talks with strategic players and investors like Blackstone, Brookfield Global for the transaction, says report.
 
KV Developers awards winner of Diwali online contest winner
 
Tata Housing bags prestigious Global Performance Excellence Award 2014
 
Ashiana Housing signs Development agreement with Escapade Real Estate
 
International News
 
Moody's: China Aoyuan's sale of stake in investment property is credit positive
Moody's Investors Service says that China Aoyuan Property Group Limited's (B2 stable) announcement that it will be selling to Huaxia Life Insurance Co. Ltd (unrated) a 46% stake in its wholly--owned subsidiary, Guangzhou Aoyu Real Estate Development Company Limited, for a total consideration of RMB1 billion, will boost its liquidity and is credit positive.
 
The transaction is expected to close before by end of 2014.
 
The transaction has no immediate impact on China Aoyuan's B2 corporate family rating and B3 senior unsecured rating as the company intends to use the sale proceeds to fund investments and general working capital.
 
Guangzhou Aoyu currently owns an investment property, Guangzhou Aoyuan Plaza, which is located in Guangzhou and has total GFA of approximately 80,000 sqm. China Aoyuan will continue to hold 54% of Guangzhou Aoyu.
 
"The disposal will increase China Aoyuan's liquidity to fund investments, which is credit positive for the company," says Gerwin Ho, a Moody's Vice President and Senior Analyst.
 
"Moreover the transaction demonstrates the company's ability to diversify its funding channel via investment property stake sale," adds Ho, who is also Moody's Lead Analyst for China Aoyuan.
 
China Aoyuan also reported that it achieved RMB10.7 billion in contracted sales in the first 11 months of 2014. This represents 33% year-on-year growth and is in line with Moody's expectations.

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