Plaza Centers N.V., a leading emerging markets property developer, has provided an update on its development project located in the Kharadi district of Pune, Maharashtra, India.
Along with its 50:50 local joint venture partner, Plaza has made good progress with the construction of the first phase of the project, a 300,000-ft² (approx. 27,800-m²) office building known as 'Matrix One'. To date, Plaza has pre-sold 70% of the saleable area.
This first office building has a total expected development cost of US $23.5 million (approx. 17.5 million), and, based on accumulated sales of office space to date inclusive of underground parking revenues, will have an end development value of approximately US $36.5 million. Plaza therefore anticipates this will deliver a development pre-tax profit of approximately US $13.0 million.
Plaza acquired the development site in 2007. The large scale project will total 1.2 million sq ft of gross built area on completion, comprising the first phase Matrix One office complex, which is expected to be completed in Q4 this year, and a second phase of two additional office buildings totaling 420,000 sq ft each, as well as a 60,000 sq ft supermarket. Construction of phase two is expected to commence in the second half of 2011.
Ran Shtarkman, President and Chief Executive Officer of Plaza Centers N.V., said: "Following several years of laying down foundations in the Indian market, we are happy to see encouraging progress with our projects in the region. When we entered the Indian market back in 2006, we held a long-term view of the strong potential demand for commercial Indian real estate, especially for well located large scale projects such as Kharadi.
"Despite the challenging global market conditions since then, the market is still demonstrating attractive fundamentals and we are pleased to be nearing the completion of our first office building in India due at the end of this year. We are particularly delighted by the high level of sales we have achieved to date for Matrix One, which we view as a good reflection of our ability to deliver a high quality building in conjunction with our local experienced partners.
"We remain committed to progressing all our schemes in the region and in particular look forward to the opening of our first shopping and entertainment center at Koregaon Park in Pune later this year. With the Indian Government predicting economic growth of circa 9% upwards this year, and with little competition in the local real estate market for large-scale mixed use developments such as ours, we see India as an important part of Plaza's overall growth strategy."