Acquisition

12 Jun 2007 07:03

Trinity Capital PLC12 June 2007 Trinity Capital PLC ("Trinity") £37.9 million investment in IT development, Delhi Trinity Capital PLC ("Trinity") today announces that it has invested £37.9million for a 49.4% stake in Luxor Cyber City, a special purpose vehicle set upby Trinity and The Luxor Group, to develop an 8.2 million sq ft Special EconomicZone (SEZ) in Gurgaon, the National Capital Region of Delhi. Excluding landcosts, the gross development value for the project is expected to beapproximately £204 million. Estimated IRR will meet or exceed the 25% investmentcriteria as set out at the time of the IPO. The project, which is scheduled to start in the latter part of 2007, is one ofonly two notified SEZs in the Gurgaon region, giving Trinity a considerablefirst mover advantage. In addition to benefiting from the fiscal advantagesrelating to its SEZ notification, there being significant tax benefits for bothdevelopers and tenants, the project will further be boosted by Gurgaon's wellestablished status as one of India's major IT hubs, and its prime location just25km from Delhi international airport and on the main road connecting Delhi toJaipur. Expected to be completed by June 2012, the project will focus on attracting ITand IT enabled Services (ITES) companies. In addition to this, Luxor Cyber Citywill also develop supporting infrastructure such as housing, restaurants,entertainment zones, schools, and hospitals in order to create a sustainablecommunity. Of the total space, 4.9 million sq ft will be used directly as ITspace and 3.3 million sq ft will be developed for supporting usage. Demand for commercial space in Gurgaon far outstrips availability of land. Inaddition, given Gurgaon's existing prominence as an IT centre and its excellentlocation, Trinity expects significant interest from IT/ITES companies for thisproject. Currently, Gurgaon contains the second highest number of employees inthe IT/ITES sector in India. Research indicates that there is 7.9 million sq ftof IT/ITES space in the region but demand is likely to touch 16 million sq.ft by2008 (Trammell Crow: Major IT-ITeS Hubs in India - A Snapshot, February 2007 andNational Association of Software and Service Companies). However, none of thedevelopments have SEZ notification. SEZs will be particularly attractive to theIT/ITES sector as existing fiscal benefits (under the Software and TechnologyParks of India) may be lifted in 2009. As such, SEZs may be the only facilitiesoffering fiscal benefits to developers and lessees after 2009 and it is likelythat a significant proportion of demand for IT space will be directed towardsSEZs. Trinity's co-investor, The Luxor Group, diversified into real-estate in 2003 andtied up with the well established Uppal Group, a corporate developer & builderwith three decades of industry experience and more than 500 projects to itscredit. Luxor has interests in hospitality, retail and cyber cities. Aashish Kalra, Managing Director of Trikona Capital, said: "We are developingapproximately 25 million sq ft of commercial real estate across major citiessuch as Delhi, Hyderabad and Mumbai. In addition, through development rightsaccruing from Trinity's investments in Fortis, IL&FS and Pipavav Shipyard, wehave the further potential to develop an additional 10 million sq.ft. Together,this establishes Trinity as one of the strongest and most active real estatedevelopers within the Indian market. Our investment in Luxor Cyber City, together with our investment in the £215million IT Park project in Greater Noida, gives us further opportunity tobenefit from the continued strong demand for real estate for IT in this region.With this transaction we have now invested £206 million, representing 88% of thefunds raised at IPO. This demonstrates the continued rapid progress we have madeover the last 12 months." ENDS Enquiries: Trikona Capital Aashish Kalra +91 11 2620 7257Cardew Group Tim Robertson +44 20 7930 0777 Sofia Rehman Catherine MaitlandGutenberg Communications Harjiv Singh (New York) +1 212 209 3863 Pranav Kumar (Delhi) +91 98100 77898Numis Iain McDonald +44 20 7776 1567 Notes: • For further information and regular updates regarding the Fund'sactivities, please log on and sign up for news alerts at www.trinityplc.com This information is provided by RNS The company news service from the London Stock Exchange