performance update for the quarter ending … sept 2011.pdf · • the hsbc india manufacturing...

1

PERFORMANCE UPDATE FOR THE QUARTER ENDING SEPTEMBER 30TH 2011

Private and Confidential

22

DISCLAIM

ER

Forward Looking Statements

It is possible that this presentation could or may contain forward-looking statements that are based on current

expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be

identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use

words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other

words of similar meaning. Undue reliance should not be placed on any such statements because, by their very

nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that

could cause actual results, and the Company’s plans and objectives, to differ materially from those expressed or

implied in the forward-looking statements.

There are several factors which could cause actual results to differ materially from those expressed or implied in

forward looking statements. Among the factors that could cause actual results to differ materially from those

described in the forward-looking statements are changes in the global, political, economic, business, competitive,

market and regulatory forces, future exchange and interest rates, changes in tax rates and future business

combinations or dispositions.

3

YATRA CAPITAL

44

EXECUTIVESU

MM

ARY

Executive Summary

• Macro economic stress continues in the global economy; India and other emerging economies likely to register slowing growth

• Inflation continues to be the greatest concern for the government; high commodity prices backed by a strong US Dollar impacting the government’s capability to rein in inflation

• The central bank continues its policy of monetary tightening – announces 12th

interest rate hike in 18 months• Real estate markets seeing lower levels of activity on account of decreased

affordability and potential drop in prices • Market uncertainty due to a weak global environment and expected slowdown in the

export oriented service sectors continues to impact leasing decisions of corporates• Yatra and the fund manager focused on active asset management; the retail mall in

Pune is now trading and the Taj hotel in Kolkata is expected to become operational in the next few months

55

SHAREPRICEP

ERFORM

ANCE

Yatra Share trading Volume- Monthly * Yatra Share Price Performance

• Post AGM approval, the share buyback program has commenced – this is in linewith the board’s stated intent to focus on reducing discount to NAV and increasingliquidity in the stock

• The highest traded share price of the shares since the beginning of the year hasbeen €6.3 whereas the lowest traded price was €3.31; share price as on Sept 30th

was €3.94

Yatra Share Price Performance

* The share traded data is composed of transactions carried out through the exchange and does not record match bargain transactions which have been made off the exchange

6

MACRO ECONOMIC OVERVIEW

77

MACRO

ECON

OM

ICO

UTLO

OK

Macro Economic Summary

• The Reserve Bank of India has downgraded the growth projections for the Indian economy at 7 - 7.5% this fiscal due to the weak global situation coupled with domestic inflation issues

• The HSBC India Manufacturing PMI, or Purchasing Managers' Index, slid more than two points to 50.4, a shade above the 50 level which divides contraction of manufacturing activity from expansion

• RBI maintains its monetary policy hardening stance with the 12th interest rate hike in the last 18 months

• The partly convertible Indian rupee has weakened nearly 10% against the US Dollarsince the start of the fiscal year in April - thereby adding further to the inflationarypressures as India imports nearly 80% of its oil requirements

• Indian stock markets have returned negative 22% from the start of this year, makingthem amongst the worst performing across all emerging markets

• However, for the April-August period, in-bound FDI went up by 95 per cent to €13billion from €6.7 billion last year

88

REALESTATEO

UTLO

OK

Real Estate Markets

• Registrations at an all time low, sales slow, financing gets more expensive— Residential: Sales and registrations slow significantly, high interest rates impact affordability.

Buyers hold on due to decreased affordability and high acquisition costs, rental registrations on the rise

— Retail: Leasing interest improves as steady consumer spending improves off take of retail space specially in Tier I cities

— Office: Expectation is that leasing will weaken in the coming quarters as IT expansion plans are put on hold on the back of weak global sentiment

— Hospitality: ARRs and occupancies improving but still under pressure from supply coming online

• Construction costs coupled with higher labour costs continue to impact margins• Significant slow down in the project approvals process, driving up gestation periods• Higher interest rate environment and slowdown in banking sanctions forces

developers to seek high cost financing from Private Equity and NBFCs• Project launches have slowed down in light of increasing inventory

levels, developers pin hope on upcoming festive season to push sales and offer attractive schemes

9

PORTFOLIO OVERVIEW AS AT SEPTEMBER 30TH, 2011

1010

• Twelve projects (two Bangalore SPVs being taken as one project due to amalgamation of business plans) and two entity level investments; weighted average Yatra (K2) equity holding in projects at 37%

• Over 19.8 mn sq ft saleable / leasable area spread across projects• Over 5.31 mn sq ft pre-let / let / pre-sold / sold / terms agreed for as at Sept 30th

2011 as against 5.09 mn sq ft at the end of the previous quarter• Financial closure achieved to the extent of 78% at the portfolio level; weighted

average cost of debt at 15%

PO

RTFOLIO

OVERVIEW

Yatra Portfolio Overview

Geographic Diversification Sectoral DiversificationAgra3%

Bhavnagar4%

Nashik7%

Indore12%

Bangalore17%

Pune23%

Kolkata26%

Hyderabad6%

Mumbai2%

Residential44%

Retail24%

Hospitality5%

Commercial18%

Enterprise Level

9%

1111

PO

RTFOLIO

OVERVIEW

Portfolio Snapshot

Complete / Almost complete

Significantly complete

Advanced stage

Initial stage

Yet to commence

Project Name Asset Class PartnerEquity

Committed€ mn

Equity Stake

Land Acquisition

Planning Approvals

Pre -Construction

Activities

Construction Status

Leasing/Sales Status

Market City, Bangalore # Residential Phoenix Mills 28.07 30.00%

Batanagar, Kolkata Residential Hiland Group 20.28 50.00%

Market City Retail, Pune Retail Mall Phoenix Mills 17.05 24.00%

Forum IT SEZ, Kolkata Office Forum Group 16.68 49.00%

Residential Project, Pune Residential Kolte Patil 15.88 49.00%

Treasure Market City, Indore Mixed-use EWDPL 11.00 28.90%

Nashik City Centre, Nashik Retail Mall Sarda Group 10.42 50.00%

Saket Engineers Private Ltd Enterprise Level Saket Group 10.13 26.05% n/a n/a n/a n/a n/a

Treasure City, Bijalpur Residential EWDPL 7.71 40.00%

Mixed Use, Bhavnagar Retail Mall Modi Developers 6.31 50.00%

Taj Gateway, Kolkata Hospitality Jalan Group 4.64 40.00% n/a

Market City Hospitality, Pune Hospitality Phoenix Mills 4.58 20.00% n/a

Phoenix United Mall, Agra Retail Mall Big Apple 4.04 28.00% n/a n/a n/a n/a

The Phoenix Mills Enterprise Level Phoenix Mills 3.73 0.44% n/a n/a n/a n/a n/a

# includes two SPVs

1212

PO

RTFOLIO

OVERVIEW

Consolidated Debt Sanction Status (€ mn)** Debt Maturity Profile (% of Total Sanctioned Debt)**

Project Completion Status Project Completion Year Wise*

Land / pre construction2 Projects

Construction Started4 Projects

Advanced Construction4 Projects

Completed2 Projects

* Completion dates are for the first phases, are indicative and are dependant upon further project progress. Sales and construction completion in residential projects is on-going** Does not include sanctioned debt in Market City Hospitality, Pune as the drawdown has not commenced yet

10.7%

32.0%

15.5%13.1%

21.4%

2.3% 2.5%1.5%

0.8%

0.2%0%

5%

10%

15%

20%

25%

30%

35%

FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21

Sanctioned 212

In Process 47

1

-

2 2

1

4

2

2009 2010 2011 2012 2013 2014 2015

No. of Projects

1313

NAV C

OM

POSITIO

N

NAV Composition

Development ProjectAmount

Committed as of Mar’11

NAV*

As of Mar'11Contribution to

NAV

Euro mn Euro mn %

Project Level Holding

Market City, Bangalore # 28.07 24.74 14.4

Batanagar, Kolkata 20.28 11.91 6.9

Market City Retail, Pune 17.05 11.27 6.6

Forum IT SEZ, Kolkata 16.68 6.55 3.8

Residential Project, Pune 15.88 17.36 10.1

Treasure Market City, Indore 11.04 10.58 6.2

Nashik City Centre, Nashik 10.42 10.09 5.9

Treasure City, Bijalpur 7.71 16.59 9.7

Mixed Use, Bhavnagar 6.38 0.57 0.3

Taj Gateway, Kolkata 4.64 6.51 3.8

Market City Hospitality, Pune 4.58 5.12 3.0

Phoenix United Mall, Agra 4.04 2.77 1.6

Listed Equity Holding

The Phoenix Mills 3.73 1.83 1.1

Unlisted Equity Holding

Saket Engineers Private Ltd 10.13 6.98 4.1

Cash and Receivables NA 38.58 22.5

Total 160.63 171.46 100.0

*NAV numbers post balance sheet adjustments#includes two SPVs

Sectoral Breakup of NAV

49%

24%

7%

13%

7%

Residential Retail HospitalityCommercial Enterprise Level

1414

TREASURY

Yatra’s Cash Position

Yatra (Consolidated) € million

Bank balance as at 30th June 2011 29.86

Less: Bal Disbursement (funds committed) (2.07)

Available Cash Balance 27.79

Less operating expenses up to March 2014 (12.10)

Balance Available 15.69

Less Additional Equity Calls (Subject to Investment Committee & Board Approval)

(10.00)

Balance Available 5.69

Less: Amount reserved for Share buyback (maximum limit as approved by shareholders)

4.00

Balance Cash Available 1.69

Name of Project Committed(€ mn)

Disbursed (€ mn)

Market City, Bangalore (2 SPVs) 28.07 28.07Batanagar, Kolkata 20.28 20.28Market City Retail, Pune 17.05 17.05Forum IT SEZ, Kolkata 16.68 16.68Residential Project, Pune1 15.88 15.88Treasure Market City, Indore 11.00 10.13Nashik City Centre, Nashik 10.42 10.42Saket Engineers Private Ltd 10.13 10.13Treasure City, Bijalpur 7.71 7.71Mixed Use, Bhavnagar 6.31 5.11Taj Gateway, Kolkata 4.64 4.64Market City Hospitality, Pune 4.58 4.58Phoenix United Mall, Agra 4.04 4.04The Phoenix Mills 3.73 3.73

Total 160.522 158.45 2

Notes:1 Equity of €1.17 mn from Residential Project, Pune and €0.7 mn from Nashik City Centre has been repatriated back to K2 Property2 Excludes recoverable advance of €3.34 million which is in the process of being recovered and repatriated to K2. Changes in commitments for other

projects are on account of restatement due to movement in exchange rates

15

DETAILED PROJECT UPDATES AS AT SEPTEMBER 30TH, 2011

1616

MARKETC

ITY, BAN

GALO

RE*

Current Status

Map

3D Elevation

Current Status

Investment Summary

City Population: 5.1 millionEconomic Drivers: Manufacturing, Textiles, IT, Agro based industries

Asset Class Residential development

DevelopmentPartner

The Phoenix Mills, a leading real estate developer, specializing in large format mixed use developments

Saleable Area 2.0 million sq ft

K2’s Commitment €28.07 million (fully disbursed)

K2’s Equity Stake 30%

Land Acquisition Completed

Development Plans Finalized and submitted for approvals

Planning Approvals In process

Debt Projected: Nil; Sanctioned: Nil

Construction Status Appointment of project consultants underway. Excavation and civil work is expected to commence in Q4 2011

Sales Update Pre launch for sales expected in Q4 2011

Completion Date March 2015

Comments Phase I of 1.25 mn sq.ft. will comprise of five residential blocks and villas. Pre launch activities are underway and the project is expected to be pre launched in the current quarter.

* Includes two SPVs – Market City Hospitality and Market City Retail

1717

BATAN

AGAR, K

OLKATA

Current Status

Map

Current Status

Master Plan of the Township

Investment Summary

City Population: 15 millionEconomic Drivers: Manufacturing, Textiles, IT, Agro based industries

Asset Class Residential led mixed use

DevelopmentPartner

Riverbank Developers, a joint venture between the Kolkata Municipal Development Authority, and one of the leading residential developers, Calcutta Metropolitan Group Ltd., in Kolkata

Saleable Area ~10 million sq ft (complete township)


K2’s Equity Stake Originally 50% in the SEZ SPV; to beapproximately 31% in the complete 262 acre township


Development Plans Completed

Planning Approvals Master plan and building plans approved

Debt (for the township)

Projected: €22.5 million; Sanctioned: €22.5 million

Construction Status Construction of phase one of various components of premium housing and first tower of mid market housing is in progress

Sales/Leasing Update

Of the 404 units in the first phase of premium housing within Calcutta Riverside, 286 units have been pre sold including 10 units in the last quarter. Out of 224 units launched in the mid market housing category, 169 units have been pre sold including 17 units in the last quarter

Completion Date NA

Comments Transaction structuring at an advanced stage to swap our equity stake in the SEZ with a lower stake in the complete township

1818

MARKETC

ITYRETAIL, P

UN

E

Current Status

Map Investment Summary

City Population: 3.52 millionEconomic Drivers: Manufacturing, IT, Automobiles, Education

Asset Class Retail led mixed use

DevelopmentPartner


Leasable Area 1.81 million sq ft (1.43 million sq ft in Phase I and the balance in Phase II)





Planning Approvals Received

Debt Projected: €71.3 million; Sanctioned: €71.3 million

Construction Status The mall opened for trading in June 2011. Currently around 143 stores are trading and 41% of the total mall retail space is operational


0.96 million sq ft of retail space has been pre let including 17,000 sq ft in the last quarter. 181,000 sq ft has been pre sold to investors so far including 34,000 sq ft sold in the last quarter

Completion Date Q4 2013 (Phase II)

Comments With the mall now open, the focus is on increasing the occupancy level to at least 85% of the let out space in the next six months

Current Status

1919

FORU

MIT SEZ, K

OLKATA

Map

3D Elevation

Current Status

Investment Summary


Asset Class IT Special Economic Zone

DevelopmentPartner

Forum Projects, a prominent real estate developerin Kolkata credited with many landmark developments in the city

Leasable Area 1.44 million sq ft (approx. 0.5 million sq ft is planned in Phase I)




Development Plans Revised development plans for Phase I underway

Planning Approvals In process

Debt Projected: €19.5 million; Sanctioned: €19.5 million (for Phase – I)

Construction Status Basement and plinth columns civil work in progress


Typically, office leasing picks up only closer to the project completion date

Completion Date March 2013 for Phase - I

Comments The project would be developed in a phased manner in line with the demand situation in the micro market. Currently the documentation for converting our plain equity into a preferred equity structure is underway

2020

RESIDEN

TIALPRO

JECT, PU

NE

Current Status

Map

Project Master Plan

Current Status

Investment Summary


Asset Class Residential led mixed use development

Development Partner Kolte Patil Developers, a prominent Pune based residential real estate developer


K2’s Commitment €15.88 million. €1.16 million has been repatriated back to K2 Property as part of the agreed structure



Development Plans Completed for Phase I and Phase II

Planning Approvals Obtained for the school; revised approvals as per final drawings at advanced stage for residential

Debt Projected: €8.7 million; Sanctioned: €8.7million

Construction Status Product mix comprising of two and three bedroom apartments and an International School form Phase I of the project. The school building has been completed and handed over to the operator. Podium level work for two residential towers is complete. Further work put on hold till we receive approvals


0.12 mn sq ft has been pre let to a school operator.75 out of the 200 apartments launched in Phase I have been booked (net of 55 cancellations because of the delay in approvals)

Completion Date March 2015

Comments Delay in obtaining approvals impacting project timelines. Discussions underway with investors for sale of the school building

Phase I

Phase IIPhase II

Phase II

Phase I

2121

TREASUREM

ARKETCITY, IN

DORE

Current Status

Investment SummaryCity Population: 1.9 million

Economic Drivers: Manufacturing, Textiles,Pharmaceuticals, Agro based industries

Asset Class Retail led mixed use development

DevelopmentPartner

TWDPL, a leading developer of urban city centers, shopping malls and townships in Tier II cities across India.

Leasable Area 2 million sq ft (approx. 1 million sq ft of Retail space in Phase I; balance in subsequent phases)

K2’s Commitment €11.00 million ( €10.13 million disbursed)

K2’s Equity Stake 28.9%



Planning Approvals ReceivedDebt Projected: €39.8 million; Sanctioned: €24.8

million; balance under processConstruction Status 88% of RCC work of Phase-I has been

completedSales/Leasing Update

Additional area of approx 5,000 sq ft leased during this quarter taking the total leased area to 0.369 mn sq ft. New tenants signed are The Bombay Store, Regal Shoes, Rado and Tissot

Completion Date Q3 /Q4 2012 for Phase I Comments Focus continues to be on construction, leasing

and financial closure for Phase I

Map

3D Elevation

Current Status

2222

NASHIK

CITYC

ENTRE, N

ASHIK

Map

Current Status

Investment Summary

City Population: 1.6 millionEconomic Drivers: Manufacturing, IT, Government run industries, Agriculture

Asset Class Retail development

DevelopmentPartner

Sarda Group, a diversified business group based out of Nashik with interests in Real Estate, Consumer Products and Education

Leasable Area 371,249 sq ft



Debt Sanctioned LRD debt: €6.6 millionOutstanding LRD debt: €5.8 million

Present Status The mall is operational and receiving footfalls ofmore than 100,000 per week and has become the social and shopping hub for the city

Leasing Update 64% of the total retail space (78% of the operational floors, excluding the 3rd and 4th floor) has been leased. Over 58% of the total retail space is operational. Advanced discussions are going on with several retailers which are likely to be closed out by the end of the year

Comments The focus continues to be on leasing the balance space

2323

SAKETENTERPRISELEVEL, H

YDERABAD

Current Status

Map

Current Status

Investment Summary

City Population: 5.7 millionEconomic Drivers: Manufacturing, Textiles, IT, Agro based industries

Asset Class Residential Unlisted Entity Level Investment

DevelopmentPartner

Saket Engineers, a Hyderabad based mid-sized residential developer

Saleable Area N/A




Construction Status

Two projects are currently under development –Sriyam, among the first high rise structures in Hyderabad, and Pranaam, a project targeted at senior citizens. Two new residential projects (one in Bangalore and the other in Hyderabad) have been pre launched for sale and development is expected to commence by Q1 2012


122 out of 270 apartments launched in Sriyam have been sold including 4 in the last quarter; 127 out of 180 apartments launched in Pranaam have been sold including 13 in the last quarter

Completion Date N/A

Comments The political uncertainty in the state continues to impact sales velocity and product pricing. Significantimprovement in sales velocity is required for timely repayment of construction loan commencing in December 2011

2424

TREASUREC

ITY, INDO

RE

Current Status

Map

3D Elevation

Current Status

Investment Summary

City Population: 1.9 millionEconomic Drivers: Manufacturing, Textiles,Pharmaceuticals, Agro based industries

Asset Class Residential led mixed use development

DevelopmentPartner

TWDPL, a leading developer of urban city centers, shopping malls and townships in Tier II cities



K2’s Equity Stake 40% (42.8% of profits)



Planning Approvals Partially received

Debt Projected: €15 million; Sanctioned: €10.5 million

Construction Status Construction of all 25 buildings in Treasure Viharand 7 buildings in Treasure Town are at various stages. Plinth completed for all 5 buildings to be built for Economically Weaker Sections. Temporary sub-station work to commence.


Total 1,263 housing units comprising of plots, row houses, apartments and affordable housing units has been pre sold till date including 150 units in the last quarter. Besides residential, all 33 shops launched were pre-sold

Completion Date Mar 2014

Comments Product mix is being reviewed to increase components of plots and row houses to reduced overall execution risk

2525

MIXED

USED

EVELOPM

ENT, B

HAVNAG

AR

Current Status

Map

3D Elevation

Current Status

Investment SummaryCity Population: 0.51 million

Economic Drivers: Manufacturing, DiamondProcessing; Ship Breaking; Textiles, Agro based industries

Asset Class Residential led mixed use developmentDevelopment Partner Modi Buildwell, a leading developer of residential

spaces and destination malls in Western IndiaSaleable/Leasable Area

0.57 million sq. ft (Residential: 285,000 sq ft; Retail : 224,000 sq ft; Commercial: 60,000 sq ft)

K2’s Commitment €6.31 million (€5.11 million disbursed)K2’s Equity Stake 50%Land Acquisition CompletedDevelopment Plans Completed


Debt Sanctioned: €6.0 million; Outstanding: €3.26 millionConstruction Status RCC work is underway for the residential blocks.

For commercial block, brick work is completed andfabrication on front elevations is in advanced stagesof completion

Sales Update The residential component comprises of 145 units out of which 115 units were launched and 97 units (net of cancellations) have been pre-sold

Completion Date June 2012Comments Though a significant portion of project debt has been

repaid, repayment of the balance debt is difficult. Discussions are at advanced stage with the promoters to divest K2’s stake in the project to them

2626

TAJGATEW

AY, KO

LKATA

Current Status

Map

3D Elevation

Current Status

Investment Summary


Asset Class Hospitality development

DevelopmentPartner

Jalan group, a prominent Kolkata based business family with interests in property developments and financial services

Hotel Area 205,900 sq ft / 196 rooms







Construction Status Currently, RCC work is almost complete up to terrace and internal finishing work for common area and hotel rooms is in progress


Hotel operator agreement has been signed with The Indian Hotels Company (Taj Gateway)

Completion Date Q4 2011

Comments The Kolkata hospitality market remains stable.The current demand supply situation is expected to provide a good opportunity for our business hotel development

2727

MARKETC

ITYHO

SPITALITY, PU

NE

Current Status

Map

3D Elevation

Current Status

Investment Summary


Asset Class Hospitality development

DevelopmentPartner


Hotel Area 300,000 sq ft






Debt NA

Construction Status Mall structure complete. Super structure (above the mall) to commence once there is clarity of the way forward


NA

Completion Date Under review

Comments Overall viability of the business plan being re-evaluated. Presently evaluating a residential development in place of hospitality

2828

PHO

ENIXU

NITED

MALL, A

GRA

Current Status

Map

3D Elevation

Current Status

Investment Summary

City Population: 1.8 millionEconomic Drivers: Manufacturing, Textiles,Leather, Tourism, Agro based industries

Asset Class Business plan under finalization

DevelopmentPartner

Big Apple Real Estate, an upcoming North India based developer, with retail projects in Tier II cities and Phoenix Mills

Leasable Area NA




Development Plans NA

Planning Approvals NA

Debt NA

Construction Status NA


NA

Completion Date NA

Comments Preliminary discussions have been initiated with intermediaries for sale of land

2929

THEPHO

ENIX

MILLSLIM

ITED

Investment Summary

Company Profile The Phoenix Mills (PML) is a mid cap real estate company with a focus on the retail, commercial and entertainment segments in Tier I and Tier II cities. PML’s flagship project, High Street Phoenix, in Lower Parel, Mumbai was the first retail centre developed by the Phoenix Group in India. Developed on 1.5 million sq ft of space, the complex houses retail, entertainment, commercial and residential complexes and is being steadily expanded in phases.



Current Status The Pune Mall is now operational, and handover of retail space for fitouts has commenced in the other Market City projects. With more projects becoming operational later this year and greater certainty around the revenues likely, we expect the share price to appreciate further

Stock Performance Closing stock price of The Phoenix Mills Limited as on Sept 30th 2011 was INR 1085 per share (Adjusted for stock split). This represents a 32% mark-to-market loss on our original investment of INR 1,600 per share

Stock Performance

Phoenix Mills Sobha Dev Purvankara BSE Realty Index

performance update for the quarter ending … sept 2011.pdf · • the hsbc india manufacturing...

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