The Hindu Business Line : Lavasa project on track despite meltdown

In times, when real estate developers are facing a fund crunch, the promoters of the single largest project in the country, Lavasa, say they have tied up close to 1,000 crore.

The Hindustan Construction Company group entity is likely to have more funds at its disposal as a couple of more banks have also come forward to fund it. Union Bank is the lead bank for the project.

"Bank of India and Axis Bank have valued our project at over Rs 10,000 crore. My peak requirement of Rs 1,750 crore, six months down in line, stands covered," said Mr Rajgopal Nogja, President, Lavasa Corporation.

Internal accruals would flow in this year, and the sale proceeds of about 800 villas, priced in the range of Rs 1 crore, and 450 apartments in the Rs 12 lakh plus should bring in about over Rs 1,000 crore, with receipts topping Rs 300 crore.

Spread across 11 villages, comprising 25,000 acres, Lavasa's development has been curbed to 12, 500 acres to preserve the pristine picturesque environs of the Sahayadri Mountain.

Mr Nogja is keen on the project being viewed as a sustainable town development and not merely as a real estate proposition. The focus is to create a sustainable environment that would propel the hill station's economy, he said.

The real estate exposure is anchored to the needs of hospitality, education, entertainment, leisure and tourism. The outlook is that the town is to attract half a million visitors by next fall and 20 lakh tourists annually, with a permanent population of 1.5 lakh, a decade later.

The residential area of villas and studio apartments will total to about 40,000 units, of which office space will account for 10 per cent. Eighteen hotels with 4,000-4,500 room have been planned.

Serviced apartments are slotted for opening sometime next year. Lavasa has six hotels under development including properties managed by hotel chains Accor and ITC Group, with a combined capacity of about 1,000 rooms. A convention centre with a plenary capacity of 1,500 people will be ready next year and an ITC hotel is slated for opening in a couple of months.

The company is in talks with a three biotech multinationals to set up their research there. A 200-acre health and wellness centre, including hospital, R&D and long-term care of Apollo Hospitals would be up and running in 2010. Lavasa has a 49 per cent stake in it, with land forming a major component.

Symbiosis, Pune, Christ University, Bangalore and NSHM- Knowledge campus, Kolkata, will have over 10,000 students on the hill their campuses by 2010, when intake comes about. Besides these,Ecole h“teliŠre de Lausanne, a hospitality school of Switzerland, supported school would also open admissions by them, Mr Nogja said.

Though the promoter intend to showcase and offer land as equity, they also work on multiple models such as build to suit and tend to rope in investors if lease models are sought for.

PRICING

Mr Nogja says Lavasa overcame the tremendous temptation to hike prices when the going was good. Bookings for the second phase would begin in the coming festive season and it would not be priced below that of the first phase, where villas were sold at Rs 2,750-3,500 a sq ft and apartments Rs 2,450-3,000 a sq ft.

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