Su­pertech may sell some of its malls

HT Estates - - FRONT PAGE - Mad­hurima Nandy mad­[email protected]

BEN­GALURU: Realty firm Su­pertech Ltd plans to di­vest some of its shop­ping malls and ho­tels in smaller Tier-II cities and raise around Rs1,000 crore, which will be used to gen­er­ate liq­uid­ity for the busi­ness and to re­duce debt, a top com­pany ex­ec­u­tive said.

Sep­a­rately, the firm ex­pects to de­liver 17,000 res­i­den­tial units, which will gen­er­ate re­ceiv­ables of around Rs1,000 crore from its cus­tomers by end of De­cem­ber 2018.

The com­pany will use the cap­i­tal to re­pay debt and com­plete projects.

Fromits mall and­ho­tel port­fo­lio, the Na­tional Cap­i­tal Re­gion­based de­vel­oper plans to mon­e­tise two malls in Haridwar and Meerut, and its Radis­son Blu ho­tel in Ru­dra­pur and Coun­try Inn & Suites in Meerut.

“We have hired con­sul­tants for the mon­e­ti­za­tion of these as­sets. Along with the cash flows that are ex­pected by hand­ing over the homes to cus­tomers, we can use the cap­i­tal to re­duce our debt as well re­solve liq­uid­ity is­sues,” Su­pertech chair­man R.K. Arora said in a tele­phone in­ter­view.

In De­cem­ber, Su­pertech said it raised Rs430 crore from Altico Cap­i­tal In­dia Pvt. Ltd, a non­bank­ing fi­nan­cial com­pany (NBFC), for its Capetown project in Sec­tor-74, Noida, and partly to re­fi­nance an ex­ist­ing lender.

“We have fast-tracked our op­er­a­tions and are de­ter­mined to de­liver all our projects on time. We have well-main­tained es­crow ac­counts for all projects and are com­mit­ted to com­ply with RERA (Real Es­tate Reg­u­la­tory Au­thor­ity) norms,” Arora said.

A num­ber of res­i­den­tial project de­vel­op­ers, who ven­tured into re­tail mall and ho­tel de­vel­op­ment, have been di­vest­ing port­fo­lios to fo­cus on their core busi­ness of build­ing homes.

Moneti­sa­tion of non- core busi­nesses has been adopted at a time when they are reel­ing un­der liq­uid­ity crunch and res­i­den­tial sales re­main tepid.

Sig­nif­i­cant con­sol­i­da­tion has al­ready taken place in the mall de­vel­op­ment, of­fice and ho­tel seg­ments, lead­ing to the emer­gence of a few strong com­pa­nies backed by large global in­vestors.

For in­stance, Al­pha Corp. De­vel­op­ment Pvt. Ltd sold its mall port­fo­lio in Am­rit­sar and Ahmed­abad to Black­stone Group Lp for a lit­tle less than Rs1,000 crore.

De­vel­op­ers such as Phoenix Mills Ltd, backed by Canada Pen­sion Plan In­vest­ment Board (CPPIB), APG As­set Man­age­men­tNV-backedVir­tu­ous Re­tail South Asia Pte Ltd and Black­stone Group LP’s In­dia sub­sidiary Nexus Malls, have been ac­tively look­ing at buy­ing un­der-con­struc­tion and op­er­a­tional malls from de­vel­op­ers in Tier-II cities.

“De­vel­op­ers are re-look­ing at their project port­fo­lios and iden­ti­fy­ing their core com­pe­tence. Ev­ery as­set class re­quires ca­pa­bil­ity and fi­nan­cial strength. Be­cause cash flows in res­i­den­tial projects are weakand­cus­tomers are get­ting anx­ious, there is a lot of pres­sure on de­vel­op­ers to makethesede­ci­sions wherethey need to di­vest cer­tain prop­er­ties and busi­nesses to en­sure that their core busi­ness runs smoothly,” said Shashank Jain, part­ner, trans­ac­tion ser­vices, PwC In­dia.

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