Emami promoters make $400m Lanka realty foray

A real estate firm majority owned by the promoters of Emami has made its maiden overseas foray with a $400 million mixed-use, high-end project in Colombo, Sri Lanka.

The project consisting of luxury retail stores, restaurants and residential apartments is coming up at a two-acre land at Sir James Peiris Mawatha street and is part of Sri Lankan government’s plan to convert some of Colombo city’s high streets into promenades.

The project has been bagged by Indocean Developers Pvt Ltd, a subsidiary of South City Projects (Kolkata) Ltd, a joint venture in which Emami promoters, RS Agarwal and RS Goenka, are majority stakeholders.

Several other Kolkata-based developers such as JK Khetawat of the Rameswara Group, Pradeep Sureka of the Sureka Group, SK Todi of the Shrachi Group, RK Bachhawat of the JB Group and Sushil Mohta of the Merlin Group are other co-owners of South City Projects, whose flagship project has been a 31 acre township called South City in the southern fringes of Kolkata.

“The Colombo development is a ticket for us to lead our expertise in international waters and we plan to undertake world-class projects in other countries also. We plan to complete the project in 2014,” Anil Khetawat, director of Indocean Developers,
said.

South City Projects’ own investment has been around $100 million, Khetawat said.

The land has been acquired on a 99-year lease from the Colombo Urban Development Authority for $32 million.

The reason for zeroing in on Sri Lanka for its maiden foreign venture has been the tax and fiscal benefits offered. Indocean Developers enjoys seven-year tax holiday and full capital repatriation.

“These benefits are unthinkable for the real estate sector in this region,” Khetawat said.

South City Projects has so far restricted itself to Kolkata and its surroundings where it has completed South City Pinnacle IT Park, a 13-storied commercial property and two residential projects — South City Gardens and South City Bel Air.

It currently has ten projects in hand with nine in Kolkata and one in Howrah. Of these, five projects for which land has been acquired are yet to commence work.

South City in now looking beyond West Bengal and is eyeing markets in central and northern parts of the country, Khetawat said.