By Magnolians. For Magnolians & Neighbours. Investment Memorandum ARTHA NEO SERENE September 2015
SECURITIES DISCLAIMER: The material contained in this presentation is confidential, furnished solely for the purpose of providing a general discussion of the subject matter, and is not to be used for any other purpose or made available to any other person without the express written consent of Magnolian InvestCo LLP. This is not an offer of securities, which will only be made with all legal documentation and agreements.
Murli: +91 9967 332 215 | [email protected]; Sandeep: +91 9716 121 100 | [email protected]
INFORMATION MEMORANDUM (IM)
Artha Serene Development, Bangalore – ARTHA GROUP (Bennett Property Holdings, The Times Group)
Deal Terms: 19%, One Year, Structured Debt
Investment: Buy with simultaneous assignment of cancellation rights
Investment SPV: MAGICRUBY
Magnolian InvestCo LLP (MAGIC) is an Investment Advisory and Management
Consulting Firm that is co-owned and peer managed by a group of fellow MAC
(Magnolias, Aralias, Camellias) Owners. The motto of the Advisory is “Live Together. Invest Together”. Murli Kadaba and Sandeep Shrivastava are the Founders and
Designated Partners in the Advisory LLP. MAGIC has been set-up to source, process and structure domestic and international private investments (in Debt and Equity), exclusively for owners and residents of MAC. Once invested, MAGIC will also help in managing investee relationships, and assist in monitoring performance and distribution of invested capital and returns to investors.
INVESTMENT SUMMARY
This Information Memorandum is to showcase an opportunity to invest in a parcel of
plotted development in Artha Serene being developed by The Artha Group in
Bangalore. Artha is a wholly owned subsidiary of Bennett Property Holding Co. Ltd.
Specifically, the opportunity is to invest Rs 9 Crores to buy 1,00,000 sq.ft. of licensed
plotted development out of a total 10 acres of a fully developed parcel. Rs. 9 Crores is
about 50% of the current selling price at Artha Serene based on actual sales price of
the last 100 plots. The entire project has already been sold in retail as plotted
development, other than the subject plotted area. The opportunity for the developer is
to take advantage of the appreciation these plots will afford them in retail after one
year, at the same time being able to access some of this liquidity through this deal for
investment in other attractive purchase options. Artha will, in turn, commit to deliver a
minimum 19% return, as cancellation premium, backed by a Promissory Note, Post
Dated Checks (PDCs) and a Corporate Guarantee. Should Artha fail to provide us our
committed 19% return, we can legally proceed to register the said plot of land without
having to pay any further monies to the developer. In essence, we have secured our
Principal and Interest through 2X collateral. All legal documents and agreements will be
held by Magnolian InvestCo, LLP.
DEAL TERMS
Investment SPV: MAGICRUBY Investment Services LLP
Area offered: Artha Serene ( sq. ft): 1,00,000
SALE: Initial offer for AOS (Rate / sq. ft): 900/-
Initial Investment for AOS (Rs): 90,000,000/-
Investment Period (Months): 12
Return on Investment after 12 Months (Rs):* 107,100,000/-
Gross IRR on Investment** (Cancellation Premium): 19%
*ARTHA shall pay MAGICRUBY @ Rs. 1,071 per sq ft upon completion of 12 months via Post Dated Cheques provided during said agreement, as cancellation penalty
**Net IRR to Investor = 17.2% (after fees and expenses)
TIMELINES:
INVESTMENT TIMELINES:
Investment Commitment: October 7th, 2015
Legal Documentation : October 9th, 2015
Funding and Deal Close: October 12th, 2015
Return of Capital: October 15th, 2016
ARTHA GROUP
Artha Real Estate Corporation Ltd. (ARECL), is a Real Estate Development Firm headquartered in Bangalore. It is a fully owned subsidiary of Bennett Property Holdings
Company Ltd (The Times Group). With over 250 acres of Land and Rs 2,500 Crores of project under development, Artha is one of the fastest growing real estate groups in
India. Artha is synonymous with building homes and creating wealth for its customers.
Artha has quickly changed the face of realty market and has become a household name in Bangalore and Chennai. It has entrenched itself deeply as a company that provides innovative concepts and imperiously crafted homes across locations and affordable price segments. Artha has won many accolades and has been conferred the
Power Brand status by the prestigious Brand Finance Institute, UK.
Bangalore Market
· Bangalore enjoys the reputation of being one of India's most cosmopolitan cities, and was the only major city that saw growth in new residential sales in
2014.
· Steady growth in the IT sector is expected to boost residential demand, particularly as more MNCs and Indian Start-Ups set-up operations in “Silicon
Valley of India”.
· The micro-markets in the South Eastern, Eastern and Northern Bangalore will continue to be the key growth areas aided by factors such as proximity to major
IT/ITeS hubs and improving infrastructure . · The ongoing and planned infrastructure projects such as the Metro Rail, Signal Free Outer Ring Road and Aerospace SEZ will continue to propel the residential
investment market in the city.
Neo Bangalore – Hoskote
· Neo Bangalore also known as Hoskote, is an integrated satellite township in its nascent stage, nestled between manufacturing facilities (Volvo, Honda), several
hospitals, colleges and international schools. It is also in the vicinity of key
micro-markets like Whitefield, KR Puram, Sarjapura, Hosur, Malur and ITPL.
· KIADB has proposed to develop a large 3,000 acre industrial township in three
phases. 1,500 acres is coming up in Narsapura, near Neo-Bangalore.
· To cater to such a surging industrial congregation, Residential space of more
than 400,000 will be required in the next 3 years.
Artha Serene Development (Neo Bangalore)
· Project spread across 10 acres of land
· Available in 3 configurations (173 Villas)
o Type A – 1, 200 sq. ft
o Type B – 1, 500 sq. ft
o Type C – 2, 400 sq. ft
· Project approved by BMRDA-HPA
· Retail financing approved by leading financial institutions COMPETITIVE MARKET PRICE ANALYSIS
Current Selling Total Consideration Project Current Project Plot Size SI No. Project Name Developer Handover Price per Sq. Ft. (Rs. In Lacs) - Excluding Location Delivery Status (Sq. Ft.) (Rs.) Registration 1 Royal City Platinum Properties Hoskote Completed Mar-15 1200 1700 20.40 2 Dhio Green Mist Dhio Build Tech Properties Pvt. Ltd. Hoskote Completed Apr-15 1200 1750 21.00 3 Artha Neo Serene Artha Infra Hoskote Ongoing Dec-16 1200 1800 21.60 4 KR Defence Sector-3 KR Build Techs Hoskote Completed Jun-15 1200 1800 21.60 5 Aam by City Ambiience Projects Hoskote Ongoing Dec-16 1500 1800 27.00 6 Nayana Greens Avighna Ventures Builders & Developers Hoskote Ongoing Oct-15 1200 1900 22.80 7 Tekton White County Tekton Estates Pvt. Ltd. Hoskote Ongoing Jan-16 1000 1900 19.00 8 Aditya Grand Plot Abhaya Shelters Pvt. Ltd. Hoskote Completed Aug-14 1200 2500 30.00 9 Udeti Green Valley Udeti Buildhomes Pvt. Ltd. Hoskote Completed Dec-13 1200 2500 30.00 10 Sinature Tulips Signature Projects Hoskote Completed Apr-13 1520 2800 42.56
Location Map
Current Stage of Development