Impact of Information Technology on Real Estate in Hyderabad - PDF

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					            Information Memorandum
Sri Sairam Towers: High Yield Debt Investment, backed by Real Estate




      Sri Sairam Towers, Opposite Hyundai Showroom, Hafeezpet, Hyderabad




                                                                           1
Contents
Part I: Introduction                                                         3-4

    •   Proposition
    •   About Srisairam Projects Ltd
    •   About Hyderabad
    •   About IndiaProperties.Com
    •   About Brics Group

Part II: Investment Proposition                                              5-7

    •   Product Description (a brief overview about the product)
    •   Product Scheme and Structure (a brief overview about the product)
    •   Example I: Client's Investment
    •   Example II: Interest Payable (to client)

Part III: The Project: Sri Sairam Towers                                     8-17

    •   Project Description
    •   Project Highlights
    •   Project Amenities & Specifications
    •   Site Layout
    •   Location Map
    •   Project Status
    •   Photographs: Towers A & B
    •   Photographs: Towers C, D & E
    •   Photographs: Towers F, G & H
    •   Photographs: Towers Swimming Pool & Parking

Part IV: Why Hyderabad                                                       18

Part VI: Investment Application Form                                         19

Part VII: IndiaProperties.Com and Brics as FMG                              20-21

    •   Advantage of the FMG
    •   Risks Mitigated, Returns Enhanced
    •   Risks

Part VIII: Disclosure Statement                                              22




                                                                                    2
Introduction

Proposition:

The objective is to fund the completion of Towers A to E of the residential project, Sri Sairam
Towers in Hyderabad, being developed by Sri Sairam Projects Ltd. The project has been
appraised and initially funded by LIC Housing Finance. All key mortgage financiers have also
approved the project.


About Sri Sairam Projects Ltd:

Sri Sairam Group, Hyderabad creates top-class construction projects using state of the art
technologies, by paying great attention to detail, in each of its construction projects. Since
inception in 1991, Sri Sairam Group has planned and executed over 15 landmark buildings in
Hyderabad. Be it luxury, semi luxury, or duplex flats, the company with its transparent dealings
has built for itself an unparalleled reputation. Quality has been an obsession at Sri Sairam Group,
be it in materials and technology used, design and layout or maintenance and after-sales service.
Thanks to its fully developed team of engineers, every project of Sri Sairam Group is quality
personified. With quality as its forte and customer delight as its goal, the company has earned the
ISO 9001-2000 certificate


About Hyderabad:

Hyderabad is the political, financial and economic capital of the Indian state of Andhra Pradesh.
The city has been classified as a Tier-1 city in terms of development priorities, due to its size,
population and impact.

The twin cities of Hyderabad and Secunderabad come under the ambit of a single municipal unit,
The Greater Hyderabad Municipal Corporation. Hyderabad has developed into one of the major
hubs for the information technology industry in India, which has earned it additional sobriquet
"Cyberabad". In addition to IT industry, various biotechnology and pharmaceutics companies
have set up their operations in Hyderabad. In the last 5-10 years, the government (central and
state) has made huge investments in upgrading and creating modern infrastructure in the city,
such as the new international airport, metro rail, expressway, various entertainment zones,
commercial complexes, etc.

Hyderabad has also seen a sharp correction of 35%+ in property prices in the last two years due
to political developments in the state




                                                                                                 3
Introduction

About IndiaProperties.Com:

IndiaProperties.Com is India’s largest and comprehensive Real Estate Services Company, with
vast knowledge and experience in the Real Estate business. The portal www.indiaproperties.com
(since 1999) is promoted by a team of professionals, with several years of hands-on experience
in the real estate sector; and assists individual customers and real estate industry professionals in
the sale, auction, purchase and leasing of all types of property.

IndiaProperties offers Auction Services to Finance Institutions like Standard Chartered Bank,
HDFC Ltd, Citi Bank, LIC Housing Finance Ltd, ARCIL, Vijaya Bank, to assist them in their Asset
Management and Debt Recovery processes.

IndiaProperties provides buyers and sellers of property never-before value, through a two-fold
approach by providing:

    •   Property buyers with conveniences, facilities and features that would facilitate them in
        locating and bidding on properties of their choice and investment
    •   Property sellers with the opportunity to leverage the power of technology to achieve local
        and global exposure for their properties

IndiaProperties empowers its clients to make informed decisions. The Power of knowing when
you’re right!



About Brics Group:

Founded in 1952, the JV Gokal (JVG) Group grew and acquired businesses in diverse industries
across the globe.

BRICS was formed in 2004, when JVG acquired Birla Sun Life Securities from the prestigious
Aditya Birla Group.
BRICS offers a range of services across asset classes:

    •   Equity
    •   Debt
    •   Commodity and currency




                                                                                                   4
Investment Proposition
Product Description (A Brief Overview about the Product):

This is a High Yield Debt Investment, backed by Real Estate. The objective is to fund the completion of
Towers A - E of the residential project Sri Sairam Towers, Hyderabad. Some of the key features about
this investment product are as follows:

    •   The Investor can avail a Discounted Investment Price of Rs 1900/- per sqft (against a peak
        rate of Rs 3200/- per sqft). The investment amount would depend on the size of the apartment
        “funded”.

    •   The investor will need to invest his corpus in an escrow account with a designate bank.
        IndiaProperties.Com and BRICS (BRICS Gilt Finance), referred to as the Fund Management
        Group (FMG), which will manage the investor’s corpus fund. The FMG will make payments to
        the Project Developer (PD), based on construction requirements as certified by the Project
        Management Consultant (PMC), appointed by the FMG

    •   At the end of the lock in period of 24 months, the PD will buy the property back from the
        investor to yield a Per Annum Simple Interest of 18% to the investor (before taxes and fees),
        on the amount invested

    •   The Investment will also be secured through a registered “Agreement of Sale” that will be
        executed between the investor and the PD on initiation of the transaction. On buy-back, the
        investor will surrender the “agreement of sale” to the PD

    •   The PD has the option to buy-out the investor between 12-24 months by paying the investor
        the pre-determined Per Annum Simple Interest up to the date of re-payment.

    •   The PD will buy back the property at the end of the lock in period of 24 months from the
        investor at a Purchase Price of Rs 2500/- per sqft.

    •   The Investor can avail of the “retention option” and retain his/ her investment in real estate by
        giving a letter of intent to the PD, between 12-21 months. The investor then has to pay the
        difference between Discounted Investment Price (Rs 1900/-) and Purchase Price (Rs 2500/-)
        being the discounted margin amount (i.e. Rs 600/sq ft x size of apartment). Additionally, the
        investor has to pay towards amenities, parking, corpus fund and other taxes as required
        (currently this is estimated to be Rs 6 lakh per apartment. Stamp duty for transfer is
        additional)

    •   The Investor who wishes to surrender the property for buy back, needs to inform the same at
        the end of the 21st Month

    •   Failure by the PD to buy-back the property at the agreed Purchase Price will allow the
        investor to retain the property at the Discounted Investment Price Rs 1900/sqft/-. The
        additional charges mentioned above will however still be applicable




                                                                                                       5
Investment Proposition
Product Scheme and Structure (A Brief Overview about the Product):

The details are as follows:

    •   Investment Sizes: The investment sizes range from Rs 35 Lakhs to Rs 100 Lakhs per
        unit. Investors can choose to invest in multiple units

    •   Offer Size: Rs 36 Crores
                         rd
    •   Offer Opens: 23 August 2010
                         rd
    •   Offer Closes: 23 September 2010

    •   Lock in period of investment: 2 Years (24 Months)

    •   Draw down schedule: The investor needs to pay in the following manner:

            o   3% of the investment amount on commitment, and signing the Investment
                Application Form
            o   47% to be paid within 6 weeks (period to complete due diligence)
            o   The Rest is payable in 4 tranches of 20%, 15%, 10%, 5% on a quarterly basis

    •   Indicative Return on Investment: 18% Per Annum Simple Interest on funds drawn (before
        fees and charges)

    •   Charges: The investor will need to bear two kinds of charges:

            o   Entry Load: 2% on the committed amount payable upfront
            o   Legal and Project Management Fees: 1% per annum of the amount committed,
                payable at the end of the project term




                                                                                           6
Investment Proposition
Example I: Client’s Investment

                Area (2,000 sqft)                                Rs (Lakhs)
Rate Per Sqft                                  Rs 2,500
Total cost of flat                             50 (2,000 sqft x 2,500/ sqft)
Investment required                            38 (2,000 sqft x 1,900/ sqft)
On commitment: 3%                              1.14
 st
1 Installment (Q0): 47%                        17.86
 nd
2     Installment (Q1): 20%                    7.6
 rd
3 Installment (Q2): 15%                        5.7
 th
4 Installment (Q3): 10%                        3.8
 th
5 Installment (Q4): 5%                         1.9



Example II: Interest Payable (to client) Area = 2,000 sq ft Rs lakh

                              Investment (Rs                               Interest Payable @
       Date/ Month                                     No. of days
                                  Lakhs)                                    18% pa in Lakhs

September 2010                      19                    731                     6.85

December 2010                       7.6                   640                     2.40

March 2011                          5.7                   550                     1.55

June 2011                           3.8                   458                     0.86

September 2011                      1.9                   366                     0.34

TOTAL                               38                                           12.00




                                                                                          7
The Project: Sri Sairam Towers
Project Description:

Sri Sairam Towers has the advantage of its location. Located on the expressway (from Miyapur to
ORR / International Airport), 5 km to Hi-Tech City & Gachibowli and 1 km to MMTS (Hafeezpet)
and the proposed Metro Station at Miyapur, Sri Sairam Towers is being developed with the best
infrastructure so that its residents can avoid wading through traffic for all times to come. The 8
blocks of apartments in the project are spread across 7.5 acres of land, with a ratio of 26% built
up area to 74% open spaces. The project also provides for a 3 level parking space, 2 below the
ground, and one above the ground with 14 upper floors.


Project Highlights:

•   7.5 acres of land 26% built up & 74% open space
•   8 blocks of excellently designed apartments
•   3 level parking - 2 below ground and 1 above ground with 14 upper floors. 43' clear open
    space from site line with 25' driveways leaving 18' for beautifully landscaped gardens and
    lawns all around the buildings
•   Total 578 residential apartments ranging between 1200 to 5400 sq.ft. including 2BR, 3BR,
    3BR with terrace, 3BR duplex, 4/5 BR duplex with exclusive triplex terrace
•   Visitors’ car parking along with seating facility in each block and additional temporary party
    parking along the driveways
•   Grand entrance lobbies with 3 high speed automatic passenger elevators and 1 freight
    elevator for each block
•   Visitors lounge overlooking landscaped lawns
•   Most of the apartments are corner apartments with excellent lighting, ventilation and privacy
    having a minimum of 12' to 20' open to sky space between apartments
•   Exclusively one flat on 7th floor of each block of apartments for ladies gym / yoga / aerobics /
    small parties along with 40'x13' semi covered landscaped terrace as sky garden and one a/c
    guest room
•   Maid toilet along with garbage disposal chute in all floors of all the blocks - opening from the
    mid landing of staircases-away from the view of lift lobbies
•   Amphitheater and stage with projection facility, Jogging track and cycle track, Skating rink
    with viewer seating, cricket practice nets, basketball, lawn tennis, etc
•   Laundry facility in the basement
•   Exclusive fire fighting system
•   Project scanned for Vaastu compliance by VAASTU RESEARCH FOUNDATION




                                                                                                   8
The Project: Sri Sairam Towers
Project Amenities & Specifications

The amenities housed in the project are:

•   Club House: Approximately 45,000 sqft of Built-up area shall be provided for the whole
    complex for the exclusive usage of Club house and other amenities. The Club house will also
    have facilities for Indoor and Outdoor games, and health club that will house a gym, yoga and
    meditation hall, spa with steam bath/ sauna and jacuzzi

•   Unique Features: Some of the Unique features of the amenities at Sri Sairam Towers are
    maximum ventilation & Natural light to each flat, no common walls, Segregation of pedestrian
    and vehicular traffic, Centralized L.P Gas Connection to each Flat, Laundry in the Basement
    of each block, Amphitheater with projection facility, Library, Exclusive Slim Gym for women at
    7th floor of every block, AC Banquet Hall, Crèche & Nursery, Restaurant with door delivery
    facility, Convenience Shopping within the Premises, Clinic, ATM

•   Common Amenities such as landscaped gardens, jogging and cycling tracks, skating rink,
    children’s play area, visitors’ lounge

•   3 high speed lifts of premium brands such as Otis/ Kone in each tower

•   Security systems such as C.C. Cameras, intercom, and trained security personnel

•   Infrastructure Facilities such as underground drainage and electrical and communication
    systems, water and sewage treatment plant, storm water drainage systems, fire alarms,
    smoke detectors, and firefighting systems, well laid out roads with avenue plantations, solar
    fencing and compound wall around the project, and rain water harvesting

•   RCC framework designed for earth-quake resistant Zone II. Premium quality paints used for
    internal and external walls. Vitrified flooring used in bedrooms, dining, living, kitchen areas
    and balconies. Anti skid ceramic tiles used for toilets and utility areas.

•   Black granite kitchen platform provided with stainless steel sink. Piped gas also provided in
    the kitchen, along with provisions for connecting water purifier and washing machine

•   Telephone and TV outlets provided in bedrooms and living room. Intercom facility in each flat,
    along with WI-FI facility

•   Premium brands of sanitary fitting used in bathrooms and toilets, bath tub in master bathroom
    along with electric point for geyser




                                                                                                 9
The Project: Sri Sairam Towers
Site Layout:

                                   Block
   Clinic, ATM,                      G
    Shopping                               Block
                                             H

       Stage
                                             Pool
   Block
     F




   Block
     B




                          Block
                            C     Block
                  Block             D         Block
                    A                           E




                                                      10
The Project: Sri Sairam Towers
Location Map:




            Sri Sairam
            Towers, Opp.
            Hyundai
            Showroom,
            Hyderabad




                                 11
The Project: Sri Sairam Towers
Location Map:




                                 12
The Project: Sri Sairam Towers
Project Status:

Project Completion Details:
• RCC structure is complete. Brick work commenced in two buildings
• Overall at this stage, 40% of the project stands complete
• Work related to all the amenities are yet to begin
• At current pace, the total project can be handed over by Dec 2011- Mar 2012
• Civil works completed in Block ‘A’ and ‘B’
• Barring Brick work, which is completed up to 10th floor, all civil works are completed in Block
    ‘C’
• Blocks ‘F’ ‘G’ and ‘H’ are in skeleton stage


Work in progress (June 2010):




                                                                                              13
The Project: Sri Sairam Towers
Photographs: Towers A & B




                                 14
The Project: Sri Sairam Towers
Photographs: Towers C, D & E




                                 15
The Project: Sri Sairam Towers
Photographs: Towers F, G & H




                                 16
The Project: Sri Sairam Towers
Photographs: Swimming Pool & Parking




                                       17
Why Hyderabad?
A Value Investment in a Growth city

Here are some reasons why investing in Hyderabad makes sense:

•   Hyderabad is a Tier I city in terms of development priorities, due to it’s size, population and
    impact

•   Hyderabad is a modern city with modern amenities such as the new international airport, the
    metro rail, expressway, entertainment zones, and commercial complexes

•   The city is also a major hub for information technology and pharmaceutical companies
    thereby creating the path for a new financial district

•   In the last 5-10 years, the state and central governments have made huge investments in
    upgrading and creating state of the art infrastructure in the city

•   The State of Telangana: Property prices have undergone a sharp correction of 35%+ in the
    last two years in Hyderabad, due to the political developments over the issue of separate
    statehood for Telangana. Hyderabad continues to be the perfect destination, political
    decisions notwithstanding:

        o   If Telangana state is formed: In the event of a separate state of Telangana being
            formed:

                    Hyderabad would be the capital of the new state. With no natural resources
                    to speak of, the new government will need to provide incentives for business
                    to move to a new state. Naturally, as the capital city, Hyderabad would attract
                    new investment from everywhere
                    The new statehood will also attract huge private investments in the next 10-
                    15 years, thanks to the tax benefits normally given to a new state by the
                    central government

        o   If Telangana state is not formed: Prices in Hyderabad should in the next 2-3 years
            find parity with other Tier I cities since the discount to these (other Tier I) cities will be
            unjustified given the superior infrastructure. This will in turn lead to a price
            appreciation of at least 50-100% from current levels




                                                                                                      18
 Investment Application Form
 Sri Sairam Towers, Miyapur, Hyderabad
 Kindly make the Cheque payable to: IndiaProperties.Com Pvt Ltd. A/C Sri Sairam Towers

                                          Fields marked with * are mandatory

                                                PROPERTY DETAILS

                      Unit No:

                                                                   ___________Block (____________Sqft) on
                    Description:
                                                                               _________Floor

                                                APPLICANT DETAILS

              * First Name of Applicant

              * Last Name of Applicant

Full Name of Co-Applicant (incase of joint applicants)

                * Applicant Address

                 * City of Applicant

                      * Country

                   Phone Number

                  * Mobile Number

                   Email Address

        Income Tax Number or Pan Number
            * Total Investment Amount
            (Total Sqft x Rs 1900/Sqft)
                                                 CHEQUE DETAILS

                 * Cheque Number
                 * Commitment Fee
          (3% of Total Investment Amount)

                    * Bank Name

                   * Bank Branch

                *Drawn on Bank City

                   * Cheque Date



                                                                                                            19
IndiaProperties & Brics as FMG
To Ensure Project is completed in time, and according to proposed specifications

Advantage of the FMG:

•   FMG will act as facilitator to ensure the project is completed in time and according to
    proposed specifications. This will be ensured through:

        o   Prefunding due-diligence
                   Architectural due diligence
                   Legal
                   Engineering
        o   Ongoing project monitoring
                   Appointment of project management consultant to monitor progress and
                   quality
                   Release of funds to match project progress
                   Collection of funds from investors
        o   FMG’s involvement reduces investor risk by ensuring
                   Money is used for the purpose for which it was raised
                   The quality and timeliness of construction
                   Project completion – ensuring that the investor gets a finished product
                   Collective bargaining power with developer – ensuring the best price at the
                   lowest risk

Risks Mitigated:

•   The property (apartment) would be registered in the name of the investor and allotment letter
    will be issued – no pooling of funds – the asset backing the investment is identifiable for
    every investor

•   Interest is “escrowed” using a discount facility – the investor pays only the amount that will
    enable the rate to build up to the pre-negotiated notional purchase price

        o   In event of developer default, the property gets registered in the name of the investor
            at the lower investment amount – an amount that is lower than the cost of
            construction (if land costs were included)

•   Option value – investor has the ability to retain the property during the period of investment
    by paying only the difference of investment amount and pre-agreed price




                                                                                               20
IndiaProperties & Brics as FMG
To Ensure Project is completed in time, and according to proposed specifications

Risks:

•   Real estate investments are illiquid in nature. Markets may remain moribund, not allowing the
    developer/investor to liquidate even the property held as collateral

•   FMG is not required to provide periodic pricing or valuation information to investors

•   Interest is not insured or guaranteed by IndiaProperties.Com, BRICS, PD, any government
    agency, any bank or other financial institution

•   This brief statement cannot disclose all the risks and other significant aspects of an
    investment. Each investor should therefore carefully study the disclosure statements




                                                                                              21
Disclosure Statement
This Information Memorandum is a private document for internal circulation. This is for
informational and discussion purposes only and is subject to amendment and updating. This
presentation is not complete and is subject to more complete disclosures, risk factors, and other
terms and conditions. Certain information herein has been obtained from sources believed to be
reliable but cannot be guaranteed and has not been independently verified. Under no
circumstances may a copy of this presentation be shown, copied, transmitted or otherwise given
to any third person other than your financial, tax and investment advisors.

No representation is being made that an investor will or is likely to achieve any results shown or
will make any profit at all or will not suffer losses. Past performance is not indicative of future
results.

Certain information contained in this presentation reflects the opinions and goals of FMG and
should not be understood as a prediction or projection of actual investments that will be made or
transactions that will be achieved.




Contact
Requests for further information and property inspection should be addressed to:

Brics:
Venkatesh Iyer
Email: venkatesh.iyer@bricssecurities.com
Cell: (0) 9821037383

IndiaProperties.Com:
Chaitra Patel
Email: sales@indiaproperties.com
Cell: (0) 9900088480




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