Kolte-Patil Developers announces the second phase of strategic land monetization for Sector R10 of Life Republic for INR 81 crore

Kolte-Patil Developers Limited (BSE: 532924, NSE: KOLTEPATIL; KPDL), a leading Pune based real estate developer, announced today that the Company through its subsidiary Kolte-Patil I-Ven Townships (Pune) Limited (KPIT) has entered into an agreement with Planet Smart City, a UK based proptech company, for the second and final leg of strategic land monetization at Sector R10 in KPDL's Pune-based township project Life Republic for INR 81.29 crore. This portion of land measuring ~4.92 acres in Sector R10 has a residential development potential of 6.8 lakh sq. ft. in terms of saleable area.

This agreement follows the initial transaction of INR 91 crore between the two companies announced in April this year, for monetization of ~5.42 acres in Sector R10 with residential development potential of 7.6 lakh sq. ft. based on saleable area. Aggregate value of both these transactions over two phases is INR 172 crore.

Similar to the previous agreement, this land parcel in Sector R10 will be jointly developed by KPIT and Planet Smart City in the profit sharing model.

Commenting on this key development, Mr. Gopal Sarda, Group CEO, Kolte-Patil Developers Ltd. said, "We are happy to announce the second and final leg of our transaction with Planet Smart City, a renowned global proptech company. Over the last eight months, our partnership with Planet Smart City has progressed well. Besides the execution of the second agreement, the first phase of the project named 'Universe' is being launched in the coming weeks. This highlights the Company's focus on execution as well as the comfort and confidence the real estate ecosystem has in partnering with us. We look forward to a mutually beneficial partnership with Planet and further strengthen our governance, operational excellence and product innovation.

These uniquely structured deals earn us land monetization benefits as well as profit sharing cash flows from the incremental planned development, resulting in strong returns. They also showcase the intrinsic value creation prospects at this township. Within a year of the buyout of economic interest, the township achieved multi-year sustainability, generating ~ 1 msf in sales in successive years. Further, the Company is enhancing the lives of its township residents by introducing global-first smart solutions across planning, architecture, technological systems, social innovation, and environment.

Life Republic is a popular, well-established township project in Pune and the joint development of Universe at Sector R10 will allow us to accelerate growth there in a capital-light manner. Further, the monetization over two legs creates resource liquidity to drive Company growth by expanding our presence into several new projects while maintaining a strong balance sheet."

Commenting on this strategic partnership, Mr. Giovanni Savio, Global CEO, Planet Holding Ltd. said, "We are excited to partner with Kolte-Patil Developers to develop R-10 sector at Life Republic, and expand our smart living concept to India. Planet Smart City is focused on designing and building smart, aspirational housing leveraging the use of smart technology, digitalization, social innovation, resilient infrastructure and intelligent urban planning to improve quality of life. We now look forward to a long association to jointly create communities that are empowered by smart solutions and the unrivalled services of our community managers and the Planet App."

Life Republic, being the company's flagship project spread across ~390 acres, is expected to meaningfully contribute to Company's revenues, profits, cash flows and return ratios in a significant manner over next 10-12 years. Life Republic is already a landmark destination for Pune home buyers, currently home to 11,000 residents and another 10,000 residents could be added in next three years. Since inception till H1FY21, ~6 million square feet of area has been sold at Life Republic. In FY20, sales of 1.05 million square feet were achieved at Life Republic, making it the second consecutive year of ~1msf of sales. In value terms, the combined FY19 and FY20 sales amount to ~Rs. 1,000 crore. The total saleable area at Life republic is ~20 million square feet, based on FSI of 1.0, which is currently incorporated in the project design plans. However, the total FSI potential of the project is 1.7 based on the integrated township norms.

Shares of KOLTE-PATIL DEVELOPERS LTD. was last trading in BSE at Rs.202.1 as compared to the previous close of Rs. 220.45. The total number of shares traded during the day was 26437 in over 1059 trades.

The stock hit an intraday high of Rs. 224.95 and intraday low of 185. The net turnover during the day was Rs. 5559299.

Source : Equity Bulls

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