| Manesar IT park: Rent stream to get a boost as tenants start moving in ARIL is working on an IT park project in Manesar with total leasable area of 1.1 mn sq ft across five towers, of which 0.65 mn sq ft has already been leased out.
While the company is receiving rent for 0.58 mn sq ft, the balance area is under lease grant period from which rent is expected during the current quarter.
Currently, fit outs are in progress for 0.15 mn sq ft, more than 50% of which has been let out to a single client. Other tenants are expected to start fit outs soon as their existing lease agreements are expected to expire by the current quarter end.
Hauz Khas residential project: Launch likely by January end The company plans to develop a 0.26 mn sq ft residential project at Hauz Khas in South Central Delhi. This prime location commands capital value of ~ INR 20,000 per sq ft. We expect launch of project for sale by January end. ARIL is constructing a retail mall at Kirti Nagar, close to the Patel Nagar metro station. Of the total 0.75 mn sq ft leasable area, ~0.3 mn sq ft has been leased out already. We expect 50% of the leased out space to be handed over by Q4FY10 end and the balance of the 0.75 mn sq ft by Q1FY11 end. We were expecting commencement of rents from the Kirti Nagar mall and launch of residential project at Bhagwandas road during FY10, which have been deferred to FY11. We will release our revised revenue estimates along with Q3FY10 result update. The stock is currently trading at a 43% discount to its fair valuation of INR 263 per share. We expect investors to react positively to launch of Hauz Khas project and additional leasing at Kirti Nagar mall and IT park at Manesar which will reduce the discount to fair valuation. We maintain our Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints. Nothing in this article is, or should be construed as, investment advice. |
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