Source : Business Times - 16 Jul 2008
BUILDING a presence in India’s residential property market, Frasers Centrepoint will acquire a 74 per cent interest in Indian property firm KS Realty Constructions for $30.02 million.
Frasers Centrepoint’s subsidiary, Frasers India (I), entered into a conditional agreement with Kotak India Real Estate Fund-I and KS Realty for the deal. Kotak Fund will hold the remaining 26 per cent interest in KS Realty.
KS Realty owns a 20.7-acre plot of land along Old Mahabalipuram Road, which is known as the IT corridor in Chennai, India. The firm is principally involved in building residential units on the land.
The $30.02 million purchase price took into account KS Realty’s audited net asset value of around 559 million rupees (S$17.7 million) as at March 31, 2008, and the estimated project development value of the land. The acquisition will be funded from internal sources.
According to a Frasers Centrepoint spokesman, the target is for KS Realty to develop a 1,500-unit condominium project in phases over six years. Units will range from 1,300 sq ft 2-bedroom apartments to 1,800 sq ft 3-bedroom apartments. Blocks with prime views may have penthouses with duplex layouts.
The condominium will also include recreational facilities such as a clubhouse with a gymnasium and swimming pools.
‘As part of its regional growth strategy, Frasers Centrepoint has been looking at Tier I, II and III cities in India,’ said its spokesman. ‘Chennai is witnessing a smart makeover with the ongoing construction activities, resulting from the demand from the IT sector, which has certainly given a push to real estate developments in this city.’
Under the collaboration, Frasers Centrepoint can offer its expertise and strong brand name, while KS Realty shares its local knowledge, the spokesman noted.
Frasers Centrepoint is a subsidiary of Fraser and Neave (F&N). F&N does not expect the acquisition to have a material effect on the group’s net tangible assets or earnings per share for the current financial year.
Shares of F&N closed six cents down at $4.38 yesterday.
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