Nitesh Estates bags Bangalore deal

Nitesh Estates, the Bangalore-based realtor, has won the bid to develop a 1.5 lakh square feet residential project in Aga Abbas Ali Road, close to MG Road, in Bangalore.

Nitesh Shetty, managing director of the company, confirmed the development and said, “The project would add approximately Rs 35 crore to the company’s bottomline.” The developer would hold 45% stake in the project, which it expects to sell for Rs 20,000 per sq ft.

It is also looking for another development of 3 lakh sq ft, which would add Rs 65 crore to the net profit next year.

Shetty said, “We have already launched 2 projects this year and we will launch another 8. We have sold 330 units and expect to reach our target of 1,000 flats this year. We are expecting a net profit of Rs 175-200 crore through the sales.” The construction on the 2 properties has just begun.

The Street is also abuzz with the news that Nitesh Estates is hiking its stake in its hotel project in Bangalore — the first Ritz Carlton property in India. It has 26% stake in the project and the rest 74% is owned by Citigroup Property Investors, which is being bought by Apollo Management. In about 90 days, executives from Apollo are expected to take over. The construction cost of the Ritz Carlton project is close to Rs 700 crore and the property is expected to come up by late 2011.

Shetty denied increasing his stake in the hotel property, but sources said that the promoters are looking at raising 10-15% stake in the project as it makes sense going forward.

Nitesh is looking at selling around 80-85% of its Kochi property and the project will have investment of around Rs 400-800 crore. The company will sign the deal with an Indian operator by the end of the month, a source said.

Nitesh Estates is also looking at listing hotel properties in Singapore as REIT in 2 years.

Och Ziff Capital Group advised ADCB Macquarie Infrastructure Fund (AMIF) had partly exited its stake in Nitesh Estates before the latter’s listing on the bourses.

It was part of the agreement entitling the promoters to a call option to buy back a certain number of shares assuring 15% return per annum.

Post the buyback, AMIF holds 14.4% of the pre-issue equity share capital in the company.