Acquisition

12 Oct 2006 07:00

Trinity Capital PLC12 October 2006 FOR IMMEDIATE RELEASE Trinity Capital PLC ("Trinity") £56 million Residential Project, Mumbai Trinity Capital PLC is pleased to announce that the asset manager of its Fund,Trikona Capital ('Trikona'), has entered into a partnership with LokhandwalaBuilders, a Mumbai based real estate developer, to undertake a residentialproject in Worli, Mumbai. Trinity has acquired 49% of the equity in this venturefor a consideration of £11.6 million. This project sees Trinity playing a major role in Indian Prime Minister ManmohanSingh's campaign to transform Mumbai into a City with global living, housing andinfrastructure standards. Major initiatives in the area by the Governmentinclude: the development of low and middle income housing, the £1.3 billionMumbai-Delhi Dedicated Freight Corridor railway project and the £139 millionBrihanmumbai Storm Water Drainage project. The key details of the transaction are as follows: • The venture is the development of a condominium project in central Mumbai. The project will develop a total of 1.37 million sq ft of residential space. • The project is being developed, constructed and marketed by Lokhandwala Builders. • Construction is scheduled to start in early 2007 and is expected to complete in 2009. Off-plan sales are expected to commence with the start of the construction phases. • The total cost of the development is expected to be £55.6 million. Estimated IRR exceeds the investment criteria set out at the time of the IPO. • Demand for new housing, in particular, low-income housing, is such that Mumbai is likely to witness an increasing number of developments. Together Trinity Capital and Lokhandwala Builders are well positioned to undertake many similar projects in the future. Mumbai's real estate market • Mumbai is a highly attractive proposition for real estate investors, with an inadequate supply of land for construction being the key factor behind the soaring property prices over the past few years. The price of residential real estate is the highest in India. • The McKinsey Report on redeveloping Mumbai, 2003, states that, the current initiatives directed towards low income housing will create a supply of less than 150,000 units over the next ten years, leaving a huge shortfall of 950,000 low-income housing units over the next decade. • At the upper end of the market, the current upward trend in the real estate market has led to an increase in the supply of residential properties in Mumbai. Upcoming new residential complexes in prime areas in the city and the suburbs have emerged as the preferred locations for residential development in Mumbai. • Currently, development projects targeting the middle-income and high-income segments, which include luxury condominiums and penthouses across the city, sell out, on average, within six months of launch. About Lokhandwala Builders • Lokhandwala Builders has established itself in the Indian real estate market over the last 20 years, and has particular expertise in residential developments. The Group has created a niche position in the industry by venturing successfully into low-income redevelopments. The core competitive strengths of the group are its proven ability to assess the potential of a project, early mover advantage and a professional and competent team on the ground to execute projects efficiently. Moiz Lokhandwala, Managing Director, Lokhandwala Builders said "The Mumbai realestate market is an exciting place to invest given the economic activity and netmigration to the City each year. Our relationship with Trinity Capital willallow us to further consolidate our position in the market". Rak Chugh, Managing Director, Trikona Capital, said, "This is a significantstrategic partnership with an established developer, which has proven expertisein this sector. As stated previously, we believe the partnership approach willgenerate significant advantages for Trinity. In August we announced our $100million partnership with IL&FS for investments in real estate andinfrastructure, and we expect to announce similar ventures in the near futurespecialising in other sectors." ENDS Enquiries: Trikona Capital Rak Chugh +91 11 2620 7251 Cardew Group Tim Robertson +44 20 7930 0777 Sofia Rehman Catherine Maitland (London) Gutenberg Harjiv Singh (New York) +1 212 209 3863 Pranav Kumar (Delhi) +91-98100-77898 Numis Iain McDonald +44 20 7776 1567 This information is provided by RNS The company news service from the London Stock Exchange