New Delhi: India’s fourth largest realty firm by market value, Indiabulls Real Estate Ltd, will earn negligible revenue in fiscal 2009 from Singapore-listed Indiabulls Property Investment Trust (IPIT), a brokerage said.
The poor performance of realty investment trust IPIT is because of the slow pace of leasing and construction at its marquee properties, Jupiter Mills and Elphinstone Mills in Mumbai, HDFC Securities Ltd said on Wednesday in a research note to clients.
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The asset portfolio of the trust includes two office properties, One Indiabulls Centre (formerly known as Jupiter Mills) and Elphinstone Mills, housing information technology firms in India. IPIT trades at 22 Singapore cents, 78% lower than its issue price of Singapore $1.
IPIT has not been able to complete the projects and consequently, the target for lease rentals have not been met, the HDFC Securities report says. “Investors will now be buying into a severely restricted income stream,” Abhishek Ranganathan, an analyst at the firm, wrote.
“The projects are likely to be completed by fiscal 2010 at the earliest,” Ranganathan added.
Indiabulls denied the report’s conclusions. Work on “offices of NDTV and IDFC has started,” Gagan Banga, chief executive, Indiabulls Financial Services Ltd, told Mint on phone, adding Singapore listing rules do not allow him to comment on future revenues.“Elphinstone Mills is expected to be ready by the middle of next year as scheduled.”