Real Estate Directory

Unitech to Raise $700 mn through Singapore Stock Exchange

Unitech, a big name in the Indian Real Estate Industry has won regulatory approval to raise $700 million through a public offer in the Singapore Stock Exchange. Unitech will list its subsidiary in Singapore as Unitech Office Trust (UOT), a real estate investment trust (REIT).

Banking majors like Deutsche Bank, Lehman Brothers, JP Morgan and UBS have been appointed as bankers for the proposed offering. The fund raising process is likely to be complete by March 2008. The company also plans to raise $1-1.5 billion through the QIP route, which is expected to be closed by the end of this month.

The Unitech Singapore REIT will acquire some of the IT parks and SEZ projects of the company in India, which are under-construction. According to industry sources six IT Park and SEZ projects being developed by the company will initially offer three to the REIT. A reliable source revealed that these will have a combined leasable area of about 10 million sq ft.

The company has already divested 60% of its stake in the six IT parks and SEZs to another subsidiary, Unitech Corporate Parks (UCP). UCP had raised about Rs 3,000 crore from the London Stock Exchange’s Alternative Investments Market (AIM) in December last year.

As told by Unitech executive, the company is working with the clear strategy of monetising its stake in commercial properties just before construction is started and recycling the capital for future land acquisitions and developments.

Following Unitech are biggies like DLF, touted as the countries largest real estate company DLF is awaiting regulatory approvals to raise $2-2.5 billion from the Singapore market, for listing its subsidiary DLF Office Trust.

Real estate in the country is already attracting investments from Singapore-based companies. Recently, Singapore-based developer Ascendas, raised a REIT of about $500 million to invest in the Indian commercial real estate market.

It has already invested in four IT park projects in India: Maharashtra, Chennai, Bangalore and Hyderabad. CapitaLand is another Singapore-based REIT with an India focus, and has invested $ 100 million in a residential project in Mumbai.

Operations of a REIT in the property market is similar to what mutual funds provide on stock investments. Last year, market regulator Sebi had made a policy announcement regarding real estate mutual funds in India. However, the policy is yet to be notified.