Ishaan Real Estate invests in Navi Mumbai IT SEZ

Ishaan is paying £6.2mn for subscribing equity shares and fully convertible preference shares in Newfound Properties, another K Raheja Corp firm

Ishaan Real Estate Plc announced on Monday that it has concluded its investment in an IT SEZ (Special Economic Zone) in Navi Mumbai, on which a development of up to 4.5mn sq ft of commercial space is being planned. Navi Mumbai is a satellite city of Mumbai, located about 35 kilometres from central Mumbai. The site is close to the Mindspace IT Park in Navi Mumbai in which Ishaan holds a 40% equity stake.

This 55 acre leasehold property, being developed by Newfound Properties and Leasing Pvt. Ltd. (a K Raheja Corp company) belongs to the local authority Maharashtra Industrial Development Corporation (MIDC). The property has been valued by independent valuers Cushman & Wakefield at £85.2mn. The 4.5mn sq ft development, which is expected to commence shortly, will take place in a phased manner and is expected to be completed in Q1 2012.

Ishaan is paying £6.2mn for subscribing equity shares and fully convertible preference shares in Newfound, which holds the leasehold title to the 55 acre piece of land being developed. In addition, Ishaan has signed a letter of intent enabling it to purchase further equity shares from K Raheja Corp Group for £20mn. Upon conversion of preference shares, Ishaan will hold 40% of the total equity of Newfound at a total cost of £26.2mn, at a discount to the independent valuation.

"The IT park in Navi Mumbai is in an area undergoing significant regeneration, and is close to existing and planned transport systems, the city centre of Mumbai and large residential areas. It is fully consistent with Ishaan's objective to invest in a portfolio of high quality, strategically positioned assets across India. The 40% stake in the Navi Mumbai IT park increases our total investment in Indian real estate development projects to £159.4mn from £133.2mn. We expect to invest about £23mn to complete the investment objectives set out at the time of the IPO," said Ian Henderson, Chairman of Ishaan.