Sunteck Realty Ltd (CRD) - ACE Analyser Meet/112179_20091009.pdf2009/10/09 · Thane (75%) Signia...

October 2009

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Corporate PresentationCorporate Presentation

Sunteck Realty LimitedSunteck Realty Limited

DisclaimerBy attending the meeting where this presentation and any additional material provided therewith (“Presentation”) is made or by reading the Presentation, you (“Recipient”), agree to be bound by the following limitations:This Presentation has been prepared on the basis of the estimates of the management of Sunteck Realty Limited (the "Company“ or “Sunteck”), for the sole and exclusive purpose of providing information to the Recipient about the Company and its business, and is not and should be construed to be, directly or indirectly, an offer and / or an invitation and / or a recommendation and / or a solicitation of an offer to buy or sell any securities of the Company in any jurisdiction, nor shall part, or all, of this Presentation form the basis of, or be relied on in connection with, any contract or binding commitment or investment decision in relation to any securities of the Company. No Offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company.These materials are not an offer of securities for sale into the United States, Canada or Japan. Securities may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended) unless they are registered or exempt from registration. There will be no offer of securities in the United States. The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about and observe any such restrictionsThis Presentation is strictly confidential and may not be copied, published, distributed or transmitted to any person, in whole or in part, by any medium or in any form for any purpose without the prior written consent of the Company. The information in this Presentation is being provided by the Company solely for the purposes set out herein and is subject to change without notice. Further, this Presentation does not purport to be all-inclusive or necessarily include all the information that the Recipient desires in its evaluation of the Company.The Company relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness.

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The Company relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness.This Presentation contains statements which may pertain to future events and expectations and therefore may constitute forward-looking statements. Any statement in this Presentation that is not a statement of historical fact shall be deemed to be a forward-looking statement, and the Recipient agrees that that same may entail known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. There can be no assurance that the results and events contemplated by the forward-looking statements contained herein will in fact occur. None of the future projections, expectations, estimates or prospects in this Presentation should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the Presentation. The Company assumes no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.The Recipient acknowledges that it shall be solely responsible for its own assessment of the market and the market position of the Company and that it shall conduct its own analysis and be solely responsible for forming its own view of the potential future performance of the business of the Company.This information contained in this Presentation is as of September 30, 2009 except as may be stated otherwise. Neither the delivery of this Presentation nor any further discussions of the Company with any of the Recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since that date. The company is not under any obligation to update the contents of this presentation or inform Recipient of any changes in the affairs of the company.The Company hereby expressly disclaims liability for any errors, inaccuracies, or omissions, and representations and warranties – express or implied, as provided within or in connection with this Presentation. Any clarifications, queries or future communication regarding the matters stated in this Presentation should be addressed to the Company directly.

Executive Summary

Overview� Mumbai focused Real Estate Development Company promoted by Mr. Kamal Khetan

� Promoter group entities commenced real estate operations in 2000 and amalgamated with Sunteck in 2008

Development Mix� Portfolio totaling 24 mn sq.ft.* of which 68% is residential; 13.4 mn sq.ft* in Mumbai of which

~70% is residential.

Strong Partners

� 10% of the Company held by Kotak Alternate Opportunities India Fund since 2007

� Strategic JV with Ajay Piramal Group for select projects

� SPV level deal with India REIT (now bought back)

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� SPV level deal with India REIT (now bought back)

� Preferred partner for land-owners for joint-development

Financing

� Low leverage on balance sheet, with available credit lines provides opportunity to leverage balance sheet for growth

� Approved credit lines at project level for execution

� Portfolio comprises JDA’s, JV’s and owned lands

Land Acquisition

� Minimal acquisitions during peak real estate cycle despite availability of cash

� Added 9.96 mn sq. ft.* in Mumbai in 2009

� All forms of land acquisition in Mumbai i.e. tenders, redevelopment, slum and industrial lands.

*Gross Saleable area

Milestones

2008

� Kotak Realty Fund buys 10% stake� JV signed with Ajay Piramal Group to set up “Piramal Sunteck Realty”� 5 new projects acquired (2.23mn sq. ft.*)

� 4 new projects acquired (1.0 mn sq. ft.*)

� 8 new projects acquired (19.48 mn sq. ft.*)

2007

2009

4

� Office property Sunteck Centrako acquired (four floors) for sub leasing in BKC

� Office property Sunteck Certainty acquired (five floors) for sub leasing in BKC

� Office property Sunteck Amenity & Sunteck Magenta acquired at Andheri

� JDA for Office property – Sunteck Centre, Vile Parle signed

� Land tender won for Signature Island (0.7 mn sq. ft.*)� Equity Investment by India REIT Fund in Signature Island2006

2004

2005

2000

2001

* Gross Saleable area

Business Structure

Sunteck Realty

Promoters

Piramal Sunteck JV

Others*

31.5%68.5%

50%

Other Projects via JVs/ JDAs/ Owned Lands &

Business Centers

50%

5

Sunteck Crest, Sion (33%)

Signia City, Mulund (50%)

Signia & Sunteck City, Thane (75%)

Signia Isles I, BKC

Signia Nagpur

Nagpur Entertainment City (55%)

Signia Oceans, New Mumbai

* Includes 10% held by Kotak Alternate Opportunities India Fund1: 60% owned by Sunteck directly and balance 40% by Piramal Sunteck JV

Madinat Al Ilam – Villas, Oman (25%)

Signia City, Mulund (70%)

Signia Isles II, BKC

Signia City, Jaipur (62.5%)

Sunteck Center, Vile Parle (W) (50%)

Sunteck Samhrutha, Karnataka (26%)

Sunteck Centrako, BKC,

Sunteck Amenity & Magenta, Andheri (W)

Sunteck Kanaka, Goa ( 50%)

Sunteck Certainty, BKC

Signia Gardens, Vile Parle (W) (65%)

Signia Woods, Kandivili Ext.

Signia Poonam, Andheri

Sunteck Classic, Andheri (50%)

Signia & Sunteck StarGhatkopar (80%)

Sunteck Grandeur, Andheri (W)

Signature Island1, BKC (80%)

Near-Term Projects | Residential FocusSunteck Portfolio - Segment by Area

13,899

17,689

12,000

16,000

20,000

(No.

of U

nits

)

Absorption of Units Nationally (Jan'09 - Jun'09)

Retail3.0%

Existing Leased

1.0%

6

6,808 6,443

4,136

6,423 5,9584,761 4,360

0

4,000

8,000

Noi

da

Gur

gaon

Gh

z'ba

d

Mum

bai

Pun

e

B'lo

re

Ch

enna

i

Hyd

'bad

Than

e

(No.

of U

nits

)Source: Propequity

Commercial28.0%

Residential68.0%

Select Case Studies – Land Acquisition

Signature Island, BKC, Mumbai

(1.7acres)

� Gross Saleable Area: 0.7 mn sq.ft.� Sunteck Investment (approx): Rs. 70 mn

Sunteck Crest, Sion, Mumbai

(11 acres)


Government Tender

Industrial Land (JV)

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Signia City, Thane

(32 acres)


Signia City, Ghatkopar,

Mumbai(15 acre)

� Gross Saleable Area: 2.6 mn sq.ft. � Sunteck Investment (approx): Rs. 270 mn

Value Creation through Structured Land Acquisition & Product Positioning

Industrial Land (JDA)

Re-Development

BKC Projects – Minimal Residential Supply

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Source: Sunteck Realty

Signature Island, BKC – Salient Features

� Luxury project located in Bandra Kurla Complex

� Possibly the most premium and expensive apartment Project in the Country

― Apartment size: 7,000 sq.ft. – 11,000 sq. ft.*

� Adjacent landmarks include premier schools, consulates, 5-star hotels

� Sprawling lobby with two grand full-height atriums

Features

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Marketing Strategy

� Exclusively marketed as a “By Invitation Only” project

� Target clientele: Promoters & CEOs of leading companies

� 21 apartments sold out of a total of 79 apartments

* Gross Saleable area

# Project Name LocationGross

Saleable Area (sq. ft.)

Effective stake (%)* Status

1 Signature Island BKC 713,128 80%

2 Signia Isles – I BKC 355,719 50%

3 Signia Isles – II BKC 355,059 50%

4 Signia Star Ghatkopar (E) 1,303,507 80%

5 Signia City Thane 4,000,000 37.5%

6 Signia Gardens Vile Parle (W) 172,611 65%

Portfolio – Residential

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Sunteck Realty is developing a total of 16.3 mn sq.ft. of residential projects (gross saleable area, including that in Signia City, Jaipur)

6 Signia Gardens Vile Parle (W) 172,611 65%

7 Signia Woods Kandivli Ext. 384,119 100%

8 Signia Poonam Andheri 69,376 100%

9 Signia City – 1 Mulund 977,842 25%

10 Signia City – 2 Mulund 967,727 35%

11 Signia Oceans New Mumbai 137,140 50%

12 Signia Skys** Nagpur 170,296 50%

13 Oman – Villas** Muscat 80,820 25%Launched

Launch in next 6 -12 months

Launch in next 12 -18 months* Directly held or through joint ventures and joint development arrangements** Non- Mumbai projects



Effective stake (%)* Status

1 Sunteck Crest Sion 1,577,055 16.5%

2 Sunteck Star Ghatkopar(E) 1,303,507 80%

3 Sunteck Classic Andheri 138,395 50%

4 Sunteck Grandeur Andheri (W) 77,924 100%

5 Nagpur Ent. City** Nagpur 1,146,717 50%

Portfolio – Commercial

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6 Sunteck Samruddha** Hubli 408,375 26%

7 Sunteck Kanaka** Goa 118,823 50%

8 Sunteck City Thane 757,434 37.5%

LaunchedLaunch in next 6 -12months

Sunteck is developing a total of 6.78 mn sq.ft . of commercial office (gross saleable area, including that in Signia City, Jaipur)

Launch in next 12 -18 months

* Directly held or through joint ventures and joint development arrangements** Non- Mumbai projects

# Project Name Location

Gross Saleable

Area (sq. ft.)

Effective stake (%)*

Status

1 Signia City Bani Park, Jaipur 8,812,079 31.25%

Portfolio – Planned Communities

* Held through joint development arrangement Launch in next 6 -12 months

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Integrated development in Bani Park, Jaipur – CBD and the prime residential area of the city

Portfolio – Leased Assets



Effective stake (%)*

1 Sunteck Centre Vile Parle (E) 152,000 50%

2 Sunteck Centrako BKC 24,100 100%

3 Sunteck Certainty BKC 29,750 100%

4 Sunteck Amenity & Magenta Andheri (W) 13,500 100%

* Directly held or through joint ventures, sub-lease and joint development arrangementsAll projects in Mumbai

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Sunteck Realty has 220,000 sq.ft. of prime commercial assets in established business districts of Bandra Kurla Complex, Ville

Parle and Andheri, Mumbai

All projects in Mumbai

Construction Progress – Signature Island

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Construction Progress – Various Projects

15

FinancialsNet Profit (Rs. mn)Sales / EBITDA (Rs. mn)

14

60

119

1042

102

214

317

0

50

100

150

200

250

300

350

FY07 FY08 FY09 FY09 -

Sales EBITDA

7

28

96

173

0

30

60

90

120

150

180

FY07 FY08 FY09 FY09 -Accounting Policy

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Debt (Rs. mn)Networth (Rs. mn)

FY07 FY08 FY09 FY09 -Consolidated


Note: FY07 and FY08 are on stand alone basis while FY09 are represented in both stand alone and consolidated basis

� Revenue Recognition : Project Completion Method

Accounting Policy

86

1,6961,908 1,938

0

400

800

1,200

1,600

2,000


59

514

273

1,185

0

200

400

600

800

1,000

1,200


(1.4)

(1.0 )

(1.0 )

(X X ) : s e c u re d d e b t

Robust pipeline of projects in Mumbai with near term cash flows

Differentiated Real Estate Play

Strong Balance Sheet

High Credibility - Preferred partners for land owners for JDA and JVs

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No land banks

Asset -light business model with RoE focus

Annexures

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Annexures

Organizational Structure

Kamal Khetan (B.E.)Chairman & Managing Director

Board of Directors

Darshan GangolliPresident - Finance

Sandeep SinghPresident – Business Dev.

Jignesh SanghaviPresident - Operations

Committee for Acquisitions

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Construction Head

Purchase Head Sales HeadPr. Planning

Head

Internal Audit Head

Company Secretary

Marketing Head

Project in Charge

Senior Executives

Manager Planning

Legal Head

Project Engineer Billing

Project Engineer Contract

Project Engineer Planning

Human Capital to Leverage Market Opportunities and Business Cycles

Corp. Comm. Head

Acquisitions Head

Investor Relations

Developing Brands for each segment matching developments with location and absorption capability of each local market

Brand Positioning Features

High-end Luxury residential Prime city centre, >6,000 sq.ft., unit price > Rs 100 mn for very high net-worth individuals

Brand: Market Segmentation

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Consistent Branding across all projects including joint ventures / joint developments

Premium residential City centric/ suburban locations, 1,200 – 5,000 sq.ft., units

Commercial Space Covers entire commercial portfolio

Signature Island* Sunteck Centre *Sunteck Grandeur*

Projects Brief

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Location SV Rd, Andheri, Mumbai

Project Type Commercial

Sale Area (mn sq ft) 0.078

Sunteck Stake (%) 100%

Expected Launch Date (Lease) Mar 2010

Location BKC, Mumbai

Project Type High end Resi.



Expected Launch Date (Sale) 2006

Location Subhash Rd, Vile Parle, Mumbai

Project Type Commercial



Launch Date (Lease) Apr 2009

*These are not photos but architectural representation of projects

Goa* Sion*Hubli*

Projects Brief (cont’d.)

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Location Gokul Mn Rd, Hubli

Project Type Grade A Comm + Retail



Expected Launch Date (Lease) Jan 2010

Location Pato Plaza, Panjim

Project Type Grade A Comm.



Expected Launch Date (Lease) Jan 2010

Location Sion, Mumbai

Project Type Grade A Comm+ Retail

Sale Area (mn sq ft) 1.60 mn

Sunteck Stake (%) 16.5%

Expected Launch Date (Sale) Jan 2011

*These are not photos but architectural representation of projects

Signia Isles I & II

Location BKC, Mumbai

Project Type High end Resi.



Expected Launch Date Dec 2009

Projects Brief (Cont’d.)

Signia Oceans

Location Airoli, New Mumbai

Project Type Premium Resi.



Expected Launch Date Oct 2009

Signia Skys

Location Sadar Bazar, Nagpur




Expected Launch Date Nov 2009

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Signia Woods

Location Borivili (E), Mumbai

Project Type Residential



Expected Launch Date Mar 2010

Oman Villas

Location Madinat al ilam, Muscat

Project Type High end Resi .



Expected Launch Date Nov 2009

Signia Poonam

Location Marol, Andheri (E), Mumbai




Expected Launch Date Feb 2010

Projects Brief (Cont’d.)

Location Ghatkopar, Mumbai

Project Type Mixed Use



Expected Launch Date Mar 2010

Signia Gardens

Location Vileparle (W), Mumbai

Project Type Residential



Expected Launch Date April 2010

Signia Star

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Signia City - I, Mulund

Location Mulund, Mumbai

Project Type High End Resi.



Expected Launch Date Aug 2010

Signia City , Jaipur

Location Bani Park, Jaipur

Project Type Planned Community


Sunteck Stake (%) 31.25%

Expected Launch Date July 2010

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