Unitech's Strategic Shift in Real Estate Investment
In a significant development in the Indian real estate sector, Unitech, the country's second-largest property company, has decided to abandon its plans for a US$600 million real estate investment trust (REIT) listing in Singapore.
Market Context
- DLF, India's largest developer, similarly postponed its REIT listing in March
- Indiabulls Properties Investment Trust recently listed with underwhelming results
- IPO raised less than anticipated
- Units dropped 10% on debut trading
- Required support from Deutsche Bank during initial trading
Alternative Strategy
Unitech's Managing Director Sanjay Chandra revealed the company's new approach:
- Will seek US$300 million from private equity firms
- Focus on developing hotels and shopping malls in India this year
- Recently sold a 50% stake in a Mumbai project to Lehman Brothers Holdings' real estate fund for US$175 million
Broader Market Perspectives
- 12 out of 15 new share listings in Singapore this year traded below offer price
- Grand Pacific Properties recently abandoned listing plans
- Contrasting positive news: China-based New Century Shipbuilding plans a potential US$1 billion IPO in Singapore
Chandra remains non-committal about potential future REIT listing timelines, indicating a pragmatic wait-and-watch approach in the current volatile market environment.