GIC to invest $336M in Russian Realty

GIC Real Estate is partnering with Russia’s PIK Group to develop a large township in the city of Mytischi in Russia.

The 114-hectare site is located in the Moscow region to the northeast of the capital.

GIC Real Estate will acquire a 25 per cent stake in the project for US$233 million (S$336 million).

A CB Richard Ellis appraisal carried out 12 months ago valued the site at over US$1.3 billion.

The township will contain 50 high-rise apartment buildings and 13 low-rise commercial buildings.

There will also be five schools, seven kindergartens, two polyclinics and over 17,000 parking lots.

When completed in 2013, the development can house about 50,000 residents.

GE might bid for Spanish Real Estate Company

General Electric Co. may bid for Inmobiliaria Colonial SA, the Spanish real estate company that’s lost about 60 percent of its market value in six months.GE’s plan, disclosed by the Fairfield, Connecticut-based company in a regulatory filing today, would be the second potential offer in a week for Colonial. The developer rose 1.3 percent, valuing the company at 2.5 billion euros ($3.6 billion). The shares have climbed 17 percent in the last three trading sessions.

By acquiring Colonial, GE would gain 12 billion euros of assets including offices and malls in Madrid, Barcelona and Paris. Luis Manuel Portillo last month quit as Colonial’s chairman after a slowdown in the property market caused shares of developers to slump.

Unitech eyes core sector, global market

India’s second-largest real estate developer, Unitech has major plans up its sleeves, which look beyond real estate.
After announcing its plans of entering the telecom business, Unitech now wants to concentrate on positioning itself as a full fledged infrastructure development company with interests in power, roads, airports, in short wherever it sees an opportunity.

Besides, it also plans to enter the international market, talks for which are on with a number of foreign players. Unitech wants to own and operate these infrastructure projects unlike contractual work which it used to take up in the past for developing captive power projects or even some road projects.

Infact, it would not be dependant only on real estate for its future growth. “Infrastructure has a fantastic scope. We have aggressive plans for infrastructure development business in addition to expanding our existing road and highway construction business,” Unitech chairman Ramesh Chandra told SundayET.

This would help the company grow at over 50 % over the next three years. “Over the next five years, we plan to grow 5 to 6 times our current size of around Rs 3,388 crore,” he said. The realtor’s recent initiative to bid for airport development rights falls in line with this larger gameplan. But it’s not just infrastructure development which is on their mind.

Commenting on the proposed international business Mr Chandra said that though things are yet to develop, it will first look at the hospitality sector on foreign shores. The real estate player already has plans to go into hospitality in a big way in the domestic market with a target of as many as 28 hotels by 2010.

Having been more involved in luxury and niche projects, Unitech also doesn’t rule out moving into the mass housing sector in the near future. “Mass housing accounts for nearly 30-35% of the market. Hence it is necessary to build projects for this segment. We will be seriously thinking of building projects for them as well,” added Mr Chandra. Unitech, meanwhile, is already involved in the finance market and operates two real estate funds. Besides, it is also developing a couple of SEZs, one of which is in partnership with the Salim group.

GE REAL ESTATE MAY OPEN OFFICE IN BULGARIA IN 2008

GE Real Estate Central and Eastern Europe (GE Real Estate), one of the owners of Mall of Sofia and Mall of Plovdiv, might open an office in Sofia or in Bucharest in 2008, Karim Habra, company’s managing director for Central and Eastern Europe, said.

Habra said that GE Real Estate saw favourable business opportunities in Romania and Bulgaria, especially in the retail sector. GE Real Estate would seek cooperation with local partners to penetrate the market.The company had already partnered with Romanian entrepreneur Helios Phoen in 2007. GE Real Estate had also teamed up with the US-based Tishman International for the development of Bulgaria’s Sofia Airport Centre, a multi-purpose project comprising office, logistic, retail and hotel space, propertywisebulgaria.com said.

GE Real Estate was currently studying new investment opportunities in the region and was likely to open an office in Bulgaria or Romania as long as it would succeed to strike a few more deals in the two countries over forthcoming months.Bulgaria and Romania offered good opportunities, especially in the retail properties markets, investor.bg quoted Habra as saying. GE Real Estate planned to look for partners on the local markets, he said.

The company was planning projects in the residential property markets of Bulgaria and Romania too. Its first projects in this market segment were in Poland and Czech Republic, through the acquisition of local construction companies, propertywisebulgaria.com said.

GE Real Estate intended to carry out parallel investments in Russia over the first quarter of 2008, most probably in warehouse areas and retail units. The company arrived on the Russian market in October 2007, when it invested 50 million dollars in the investment fund Heitman Russia Property Partners (HRUPP).

IL&FS have raised $578M in second round of real estate fund

IL&FS Investment Advisors on Wednesday said it has raised USD 578 million through its second real estate fund and targets to close the fund at USD 750 million. IL&FS India realty Fund-II will invest in an entire gamut of real estate spaces across tier-I and tier-II cities, a press release issued here on Wednesday said.

IL&FS Investment Advisors is a wholly-owned subsidiary of IL&FS Investment Managers Limited (IIML). IIML had raised USD 525-million through its first real estate fund in April 2006, the company said. “The investment team has seen investment opportunities across various sectors ranging from residential, retail, commercial and has the confidence to access prudent investments across all sectors in this space,” IIML’s Vice- Chairman and Managing Director Shahzaad Dalal said in the release.

IIML is currently managing investments in excess of USD 1.5 billion across various sectors, it said.

Cousins, Prudential Real Estate form $172.5M venture for Atlanta office building

 Cousins Properties Inc. (NYSE:CUZ PRB)  said Tuesday it formed a joint venture with Prudential Financial’s (NYSE:PRU) Prudential Real Estate Investors to develop, own and lease Terminus 200, a 565,000-square-foot office building under construction in the Buckhead district of Atlanta.The capitalization of the venture, including debt, will be $172.5 million, which is the expected construction cost of the building.

The joint venture has closed on a $138 million construction loan.Prudential Real Estate Investors is acting on behalf of institutional investors, Cousins said.Shares of Atlanta-based Cousins fell 2.1% to $24.27.

Xinyuan Real Estate’s IPO Prices at $14

Shares of Xinyuan Real Estate Co., which develops real estate in China, will begin trading Wednesday after the company’s initial public offering priced at $14 per American Depositary Share, the midpoint of expectations.According to Securities and Exchange Commission filings, Xinyuan expected the IPO, which totals 17.5 million ADS, to price between $13 and $15 each. Each ADS represents 2 common shares.

Xinyuan is a Cayman Islands holding company that operates through a subsidiary in China.The company raised about $224.9 million in net proceeds from the IPO, after fees and expenses. Xinyuan plans to use the proceeds to acquire land-use rights for future development projects. Remaining proceeds will be used for working capital and other general corporate purposes.

Xinyuan focuses on residential real estate development in China’s larger, more developed cities with above-average gross domestic product and population growth. The company was founded in 1997 by Chairman and Chief Executive Yong Zhang, who previously worked at construction and property-development companies in China.

Foreign biggies looking to invest in Indian real estate

India’s booming real estate industry, growing at a scorching 30 per cent and estimated to touch $60 billion by 2010, has caught the fancy of global realtors and investors who have pumped in or are looking to invest heavily in the sector.

Indian real estate industry, which is currently pegged at 16 billion dollars, is witnessing increased interest from several international developers, primarily from the Middle-East, South-East Asia and Europe.

During this week itself, Donald Trump Jr of US-based Trump Organisation announced it was scouting for partners to foray into the country’s realty market, while Dubai-based DAMAC Properties said it would invest up to 5 billion dollars (about Rs 20,000 crore) to develop properties in India.

Early this week, Merrill Lynch & Co also bought 49 per cent equity in seven mid-income housing projects of India’s largest real estate developer DLF in Chennai, Bangalore, Kochi and Indore for Rs 1,481 crore. The projects would be developed in about 7-8 years.

Dubai-based Nakheel and Hines of the US had earlier this year tied up with DLF to develop properties in India. DLF has formed a joint venture with Limitless Holding, a part of Dubai World, to develop a Rs 60,000-crore township project in Karnataka.

“We are looking for JV partners to enter into India. That is precisely why I am here. We are interested in the major cities for investment,” Trump Organisation’s Executive Vice- President (Development and Acquisition) Donald Trump Jr had told reporters in Mumbai.

DAMAC Holding, the parent company of DAMAC Properties, Chairman Hussain Sajwani said: “We plan to invest

Tribune profits slumps due to real estate

Tribune Co. (NYSE:TRB) , the nation’s second-largest newspaper publisher, said Tuesday its October revenue fell 9.3 percent as classified ad sales continued to suffer from real estate declines.

The company, whose properties include the Chicago Tribune, the Los Angeles Times and nine other dailies along with 23 TV stations, said consolidated revenue for the period ended Oct. 28 slipped to $383 million from $422 million a year ago.

The monthly results confirm a continuation of the industry tailspin that sent Tribune’s third-quarter revenue down 4 percent and earnings down 7 percent from the same period in 2006 as the housing slump and lower consumer spending hammer advertising revenue.

Circulation revenue fell more than 6 percent because of declines in single-copy sales and discounts for home delivery, the Tribune said.

Shares in the company fell $1.23, or 4.3 percent, to $27.37 Tuesday.

Publishing revenue in October dropped 7.9 percent to $287 million, with ad revenue sliding 10.6 percent to $222 million.

National ad sales dipped 2.3 percent with softness in auto, transportation and technology categories partially offset by an increase in the movie category.

Classified ad sales slumped 19.2 percent, as real estate tumbled 26.9 percent on significant dropoffs in Los Angeles, Chicago and Florida. Help wanted ad revenue declined 21.7 percent and automotive fell 4.9 percent. Interactive sales were a bright spot, rising 11.4 percent to $22 million.

Retail advertising sales slid 7.8 percent as declines in department stores, amusements and electronic categories were partially offset by a rise in the health care category.

Broadcasting and entertainment revenue slipped 13.3 percent to $96 million on declines in television group revenue and Chicago Cubs revenue. Television revenue fell 7.1 percent on dropoffs in political, movies and retail, partially offset by strength in food/packaged goods, telecom and restaurant/fast food categories.

Tribune is in the process of going private under the leadership of real estate magnate Sam Zell.

DLF to buy aman resorts

Realty major DLF announced on Tuesday that it is buying a controling stake in luxury hotel chain Aman Resorts, which has an enterprise value of $400 million. According to a company source, initially, DLF will pay $200 million to be an equal partner in the company. But, over a period of time, DLF will pay the entire enterprise value of $400 million to acquire the company. A statement issued by DLF says “the transaction when completed is estimated to be valued at $400 million”. This means over a period of time, DLF will acquire a 100% stake in the company. The deal also adds Delhi’s Lodhi Hotel in DLF’s kitty and marks the entry of DLF into the luxury hospitality segment. Delhi-based DLF has also inked a separate JV with the Hilton group to set up business hotels across the country — a segment different from where Aman operates. The group has recently tied up with the most luxurious hotel chain in the world “Four Seasons” to run a super delux hotel in Gurgaon. Under the terms of agreement between DLF and Aman, the properties operated by the latter will continue to use the banner of Aman Resorts — a name familiar to high-end travellers across the world. DLF’s role will be that of a strategic partner that will fund expansion plans based on properties that Aman Resorts identifies. Founder and chairman of Aman resorts Adrian Zecha in a statement said, “With the financial backing of DLF, Aman Resorts will now have the resources to significantly scale up its development plans.” A spokesperson for Aman Resorts in a release said at $778, the company earns the highest average daily rates per room. Roughly 34% of Aman patrons originate from Europe, another 34% from Asia Pacific and 28% from the Americas. For India, DLF has plans to build over 100 hotels with 25,000 rooms spread over 70 cities by 2010. The group has already identified around 40 plots suitable for the hotel development in various cities like Delhi, Mumbai, Chennai, Kolkata, Banglore, Hyderabad, Pune, Chandigarh, Amritsar and Ludhiana. In Mumbai, the group will build a hotel at Mahalaxmi. Here it would also develop super premium residential apartments. The group is also planning to develop a super deluxe five star hotel and an ultra-premium residential condominium on its 23 acre plot at Chanakyapuri in South Delhi.