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Keppel Land to take 49% stake in JV to develop Mumbai township

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 jointly develop a 51.4 hectare integrated township in the Thane district of Mumbai for INR 4,091 million (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 JV company, Kapstone Constructions Private Limited, owns certain land parcels in the Urbania township and holds development rights in the remaining land parcels.

Since its launch in 2006, the Urbania township has housed 2,700 residential units amid comprehensive amenities.

Upon completion of the acquisition, Keppel Land and Rustomjee Group will jointly develop an addition of about 7,400 homes and retail units with a total gross floor area of approximately five million square feet. The development cost for the first phase under the JV, which will comprise approximately 460 residential units, is expected to be approximately INR 4,016 million. Completion of the acquisition is subject to certain conditions, and is expected to take place around the first quarter of 2020.

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The unaudited net tangible asset value of the JV company attributable to 49 per cent of the total voting rights and adjusted to include the estimated aggregate value of the Urbania Township was approximately INR 4,103 million as at June 30, 2019.

The investment sum of INR 4,091 million will be payable in cash upon completion. The amount took into account the location and development potential for the Urbania Township, prices of comparable properties in the Thane District, prevailing market conditions and the unaudited net asset value of the JV company.

Ho Kiam Kheong, president (India), Keppel Land, said that the collaboration with the Rustomjee Group for the 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.

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