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IL&FS Milestone Fund Picks Up 74% In HCC Project

10 June, 2010

IL&FS Milestone Realty Advisors Pvt Ltd, a joint venture between Milestone Capital Advisors Pvt Ltd and IL&FS Investment Managers Ltd (IIML), has picked up 74% stake in 247 HCC Park, a 1.8 million square feet commercial property located in Vikhroli in Mumbai. The deal size is around Rs 575 crore.

The park was developed by HCC Real Estate Ltd, which is a subsidiary of Hindustan Construction Co Ltd (HCC). The investment valued the firm at Rs 775 crore. The fund has entered into a definite agreement with the affiliate company of the HCC Group to buy this stake, said a company statement.

The investment was made through IL&FS Milestone Fund. HCC plans to utilise the fund to repay debt of Rs 350 crore raised during the construction of the project from HDFC Ltd, reports Mint. Mumbai-based investment bank Money Matters Financial Services Ltd was the sole advisor to the deal.

The property claims to be one of the most prominent commercial properties in Mumbai. The project was completed in March 2010, and over 85% of the properties are already leased out.

Ved Prakash Arya, MD and CEO, Milestone Group, said, in the statement, “With stable long term tenants in place, 247 HCC Park is a state-of-the-art building designed using sustainable design philosophies. IL&FS Milestone’s in-house asset management capability is sure to bring higher value to the investment as our focus in much beyond pure financial involvement.”

Arya added that there had been a supply overdose for all kinds of commercial properties in the current scenario, and the fund was on the lookout for properties with stable rentals rather than unnaturally high rentals which can lead to artificial yield assumptions.

Shahzaad Dalal, vice-chairman, IL&FS Investment Managers, said, “The investment into 247 HCC Park promises a great investment option for IL&FS Milestone’s investors as they receive the yield which comes from the monthly rent the fund will receive from the various tenants in the leased out premises of the park.”

The fund has already invested around Rs 1,800 crore across eight investments so far. Its other portfolio investments include commercial properties which are spread across Mumbai, Kolkata, Pune and Bangalore. The parent funds – IIML and Milestone Capital Advisors jointly manages a total of Rs 16,350 crore, of which Rs 13,150 crore ($2.8 billion) is with IIML and the rest with Milestone.

Besides HCC Park, the Mumbai-based construction firm is also engaged in developing a hill city project called Lavasa Corporation Ltd near Pune. The firm has recently raised Rs 100 crore from The Jammu & Kashmir Bank Ltd through equity convertible debentures, valuing the project at Rs 12,000 crore.


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IL&FS Milestone Fund Picks Up 74% In HCC Project

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