Landmark exits Wave Group project for $56M, pockets over 3x on its investment

Delhi-based real estate investment firm Landmark Holdings has exited its investment in Wave Group’s 4,500 acre Hi Tech City project in Ghaziabad for Rs 350 crore ($56 million) making over 3x on its original investment.

The private equity player had invested Rs 111.26 crore in the project in 2008. The developer bought back the stake held by the investment firm.

“When we invested in the Wave project, it was spread across 1,500 acres but now it has become a 4,500 acres project. It is natural for good projects to keep getting extended in size in such suburban markets, rather than for developers to seek totally new projects,” Gaurav Dalmia, executive vice chairman, managing director and CEO of Landmark told VCCircle.

The first phase of the project will comprise of 20,000 dwelling units, of which 4,000 units are close to being delivered. The total project in its final configuration will have in excess of 75,000 dwelling units.

Privately held Wave Group was founded by Ponty Chadha, who died in a shoot-out with his brother last year.

According to Dalmia, while Landmark got a good exit from this project, the future for real estate looks grim with the present market scenario.

“The real estate market is pretty grim right now and we believe the problems are only starting in many markets so tough times will be here for a while. Therefore, we are focusing either on secondary markets such as locations outside Delhi NCR like Dharuhera which have their own demand-supply mechanics, or in the heart of Delhi NCR where there is a very high demand and where most historic supply is more or less exhausted,” Dalmia said.

Further, Landmark has exited another investment in a project of ATS Group and earned over 2x on its investment with an implied IRR of 24.5 per cent.

"We invested Rs 50 crore in ATS project around 33 months back. We exited two months ago with 2x returns. It’s a residential development called Hamlet in Noida," Dalmia said.

Earlier the company sold its stake in a residential complex in Ghaziabad to its JV partner Shipra Group for Rs 106 crore. Also, earlier this year it invested $8.9 million in MG Housing’s project in Dharuhera, Haryana.

Till now, the company has invested in 25 projects as an equity or quasi-equity investor with various developers including Ansals, Wave, Parsvnath, Forum and Pioneer.

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