KepLand to take 49% stake in Mumbai township JV
Investment will cost 4,091m rupees; first such tie-up between a Singaporean developer and an Indian developer for a township in the fast-growing region
Singapore
KEPPEL Land, through its wholly-owned subsidiary Lipalton, will be acquiring a 49 per cent stake in a joint venture with Indian developer Rustomjee Group to develop a 51.4ha integrated township in the Thane district of Mumbai for 4,091 million rupees (about S$78.2 million).
This is believed to be the first such collaboration between a Singaporean developer and an Indian developer for a township in the Mumbai Metropolitan Region, which is among India's fastest-growing regions.
The joint venture company, Kapstone Constructions Private Limited, owns certain land parcels in the Urbania township and holds development rights in the remaining sites. Since its launch in 2006, the Urbania township has housed 2,700 residential units.
Upon completion of the acquisition, Keppel Land and Rustomjee Group will jointly develop an additional 7,400 homes and retail units with a total gross floor area of around five million square feet. The development cost for the first phase under the joint venture, which will comprise some 460 residential units, is expected to be about 4,016 million rupees. Completion of the acquisition is subject to certain conditions, and is expected to take place around the first quarter of 2020.
The investment sum of 4,091 million rupees will be payable in cash upon completion. The amount took into account the location and development potential of the Urbania Township, prices of comparable properties in the Thane District, prevailing market conditions and the unaudited net asset value of the joint venture company.
Ho Kiam Kheong, president (India) of Keppel Land, said their collaboration with the Rustomjee Group for this maturing integrated township is in line with Keppel Land's strategy to strengthen its presence in high-growth areas such as the Mumbai Metropolitan Region.
"The partnership has landed on a rare opportunity of a development of such scale in Mumbai, which is experiencing rapid demand for quality homes," he said.
"We will leverage the Rustomjee Group's extensive network and deep knowledge of the local property market, as well as Keppel Land's international experience and strong execution capabilities to develop a highly liveable and vibrant township."
The transaction is not expected to have any material impact on the earnings per share and net tangible assets per share of Keppel Corporation for the current financial year.
