BackLodha Group buys prime property in London
The 0.67-acre property near Buckingham Palace will be converted into super-luxury residences for the ultra-rich
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Mumbai: Growing confidence and opportunities are prompting Indian developers to venture abroad, real estate experts say.
Developers like Bangalore-based Sobha Group and Mumbai’s Hiranandani Group have a presence in real estate projects in the Middle East.
The latest to join the bandwagon is the Mumbai-based Lodha Group, one of India’s largest real estate developers, which on Friday announced the acquisition of a property in tony Central London from the Canadian government for over £300 million (around ₹ 3,060 crore today).
The landmark MacDonald House, located on the corner of Grosvenor Square, is in the heart of London’s West End. The building first served as the High Commission for the US and subsequently, as the High Commission for Canada.
“Grosvenor Square is the best address in the world and we will create a world-class development which befits the status of this address," said Abhisheck Lodha, managing director of Lodha Group.
News of the purchase was on Friday reported by The Economic Times, citing people familiar with the matter. The 0.67-acre property will be converted into super-luxury homes for the ultra-rich, the paper reported. The Lodha Group hopes to receive about £750 million from the sale of these flats and it has time till March-end to pay the entire consideration, the report said.
Lodha Group said the company bought the property after a highly competitive bidding process involving top global developers and sovereign wealth funds. The group has already made an initial payment to the Canadian government and that the rest of the money is expected to be paid in two or three tranches.
The company also announced its decision to focus on Mumbai and London as its two main markets.
Privately held Lodha Group, with net sales exceeding ₹ 8,700 crore in fiscal 2013, is currently developing over 35 million sq. ft of real estate, with 20 projects in Mumbai, Pune and Hyderabad.
“Real estate companies with good liquidity will venture abroad as part of their strategy to derisk their business and also to take advantage of the favourable opportunities abroad," said Gulam Zia, executive director-advisory, retail and hospitality at real estate consultancy Knight Frank (India) Pvt. Ltd. “Different countries have different business cycles and companies with presence in multiple countries make use of this."
In May, Sobha Group announced that it was developing a township of over 1,000 acres in Mohammed Bin Rashid City in Dubai along with the Meydan Group of Dubai. This project is said to be the largest real estate development after the emirate’s property crash in 2008.
Sobha Group, promoted by billionaire P.N.C. Menon, which has a presence in Oman, the UAE, Qatar and Bahrain, started operations in 1976 with its interior business. Sobha’s real estate company in Dubai has delivered four projects covering 1.5 million sq. ft of built up area.
Hircon International Llc, a subsidiary of Hiranandani Group, developed the 90 storied residential tower called 23 Marina in Dubai, which is one the tallest residential towers in the world.
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