MANOJa

Unitech Ltd, India’s second largest real estate company, is expanding its retail development business and plans to invest around Rs 2,000 crore over the next three years to develop about two million square feet of premium and luxury shopping malls. “The road map is to monetize the existing land parcels we have spread across various cities and to also acquire new land to build shopping malls,” Munish Baldev, head, retail, Unitech told Mint.

Baldev said now is the right time for Unitech to grow its retail business because rentals are stabilising. He added that the firm has the dual advantage of owning land in plenty and good catchment areas in the form of its own residential projects, where shopping centres can be a natural component. Currently, residential projects account for 70-75 per cent of Unitech’s portfolio and the rest is made up of commercial and retail projects.

Unitech has 1.3 million sq ft of mall area in New Delhi, Noida and Gurgaon, and is developing another 2 million sq ft of retail space in cities such as Kochi, Bhopal, Dehradun, Mohali, Lucknow and Gurgaon. Unitech will employ a lease-cum-sale model for most of its retail ventures, Baldev said. The company will sell up to 30 per cent of the space in a shopping mall to retail investors –equivalent to the construction cost — and lease out the rest of the area. It has already employed this model in the Gardens Galleria mall in south Bangalore that it is developing with its joint development partner Valdel Group.

Unitech will develop a range of retail formats including malls of 300,000-500,000 sq ft in cities such as Bangalore, Mohali and Dehradun, Baldev said. It will also develop high-end luxury malls of 100,000 sq ft as well as retail spaces of 100,000-150,000 sq ft that will be part of its housing colonies across cities. Unitech managing director Sanjay Chandra has been in jail since April pending investigation into his suspected role in gaming the grant of second-generation spectrum and licences to telcos in 2008.



Unitech Plans Retail Expansion; To Invest Rs 2000 crores to Develop Luxury Shopping Malls

MANOJa

Realty major Unitech Ltd is currently developing about 80 projects across the country covering 40 million sq ft of area and focusing on improving its execution capabilities, a top company official has said. “Going forward, the quality of execution will determine whether Unitech will move to the next level or not. And, this is where most of the company’s attention is now centred,” the company’s ChairmanRamesh Chandra told shareholders in the annual report of the last fiscal. Chandra said that the company’s operations have expanded manifold at a rapid pace and it has about 80 ongoing projects covering a total area of about 40 million sq ft.

“These projects are spread over different geographies in India further increasing the complexity in terms of project execution. However, with the internal initiatives undertaken on improving execution, we are confident of providing high quality housing to all our customers,” he said. Some of the initiatives taken by the company are product standardisation, in-house architectural and engineering design, expansion of contractor base and higher mechanisation. In 2010-11, Unitech launched projects covering 10.44 million sq ft area. It booked 9.16 million sq ft for Rs 4,323 crore and delivered 4.25 million sq ft of completed area. On telecom, Chandra said that he has full faith in the judiciary and expressed confidence that Unitech Wireless would be able to defend itself. Unitech has little over 30 per cent stake in Unitech Wireless, which operates under Uninor brand. The remaining stake is with Norway-based Telenor.

Unitech Managing Director Sanjay Chandra was arrested in April this year and taken to judicial custody in relation to 2G telecom scam. “Unfortunately, with regard to the ongoing telecom issue, I will not be able to share any of my views or facts, as the matter is subjudice,” he said. “However, it is important for me to convey to you that I have full faith in the Indian judiciary and I am confident that Unitech Wireless (Tamilnadu) Pvt Ltd will be able to defend itself in the Court of Law,” he said. Chandra said the real estate venture Unitech would continue to focus on its core business activities - project launches, sales, project execution and delivery. The company has major presence in national capital region, Chennai and Kolkata.


Realty Major Unitech Working on Quality Execution of Projects

MANOJa

BEWARE!.. Because Unitech has still not paid brokerage to the Real Estate Agent who helped them sell their hotel Courtyard by Marriott in Feburary 2009, and the Agent is planning to sue Unitech in the coming weeks for non-payment of the commission.


Unitech, the country's second largest real estate firm, has sold its 200-room budget hotel - Courtyard by Marriott - in Gurgaon to Delhi-based Roop Madan, a high net worth individual (HNI), for around Rs 230 crore. According to sources, the agreement has already been signed and a formal announcement is expected in the next couple of days.

Interestingly, Unitech has also withdrawn its proposal to raise Rs 5,000 crore through issues in overseas markets. Earlier, the company had applied to the Foreign Investment Promotion Board (FIPB) seeking some exemption to bring in more foreign investment in the holding company.

When contacted, a Unitech spokesperson said, "We are in advance stages of negotiations with some of the HNIs and expect to close the transaction shortly." On the issue of withdrawing its application from FIPB, he refused to comment.

Roop Madan, the buyer of Courtyard by Marriott, has interests in imports, in premium liquor and cigarette trade with investments in many real estate projects, sources said.

This would be the first asset sale by Unitech, which has decided to mop up funds by selling assets such as hotel, commercial real estate and institutional land. The company, which currently has a debt of Rs 8,200 crore, is expected to raise around Rs 1,500 crore from sale of hotels and commercial space.
Sources said that Unitech was also in discussion with a group of HNIs to divest 225,000 sq ft of office space in South Delhi for around Rs 500 crore. The company is planning to sell the office space on a floor basis to HNIs. "In this market, it is difficult to sell large property to an individual buyer," sources said, and added, "The deal, to be closed in early March, is expected to fetch around Rs 500 crore."

The Gurgaon hotel's sale comes at a time when the hotel business has slowed down considerably, with January being one of the worst months in the recent past. Unitech invested Rs 100 crore on this project, including Rs 10 crore on real estate.

The Gurgaon hotel was almost ready and could be opened soon after making marginal changes, sources said. Given the bad sentiment faced by the hospitality sector, no conventional hotelier was keen to buy the property. In fact, a recent auction by a GMR-led consortium at Delhi International Airport for hotel projects received a lukewarm response.