Real Estate Giants Vie for King-size Projects
For real estate developers in India, size matters. As the economy strides forward with bigger demands on commercial property in India, project sizes assume mammoth proportions. The latest newsmakers are again arch rivals DLF and Unitech who have announced big-budget projects, keeping their shareholders in good humour.
DLF has bagged the Rs.6000 crore contract from the DDA to build an international
convention center at Dwarka on 2 million square ft. The complex will include
commercial spaces, a business hotel, shopping malls, exhibition halls, meeting
rooms and multiplexes.
The land is owned by DLF, and the company will follow
the lease model for the hotel and retail business.
As a consequence, DLF’s shares rose by 6.4%, appreciating by a fifth of its listing price in a month. On Wednesday, 18th July, its stock closed at Rs.643, as against its listing at Rs.525 on 5th July.
The real estate giant is also understood to have tied up with Tata Retailing
Services to develop its malls.
Unitech, meanwhile, is partnering Marriott, Starwood Hotels and Resorts
Worldwide and Intercontinental Hotels to build their hotels in India.
The
28 hotel projects will call for an investment of USD 720 million over
the next four years. Unitech’s stocks have appreciated by 19.5% in the last 6 months, and the company plans to float a REIT overseas to fund its various projects.
Again, the Lanco Hills project in Manikonda, Hyderabad by Lanco Infratech
is reportedly the largest integrated projects in the world, with 30 million
sq. ft of developed area
Public offers from real estate companies are gaining popularity, with
the Omaxe IPO being oversubscribed three times by the second day of its issue.
With 1.77 crore shares on offer at a price band of Rs.265 to Rs.310 per
share, the IPO received bids for 5.54 crore shares.
Omaxe achieved a turnover of Rs.283 crore in 2003-04, which shot up to
Rs.1440 crore in 2006-07, registering a 72% growth. Its profit after tax
of Rs. 8 crore also multiplied to an impressive Rs. 257 crore in 2006-07.
The company has a land reserve of 3255 acres in Punjab, Haryana, Rajasthan,
Madhya Pradesh, Uttaranchal, Himachal and Uttar Pradesh.
