Emaar-MGF targets delivery of old projects in FY13

Emaar-MGF, a joint venture between Dubai-based real estate developer Emaar Properties and India’s MGF Development Ltd, is looking at fast completion of its existing projects in the current financial year rather than launching new projects.

Sources said the company’s primary focus is business consolidation in the financial year, as several of its projects are running behind the schedule and the developer is reeling from a heavy debt burden.

Although company officials said some new projects would be launched in 2012-13, the key focus will remain on execution and delivery of the launched projects.

Emaar-MGF may also explore the option of selling a few land parcels if it gets good valuation. The company has a net debt of around Rs 4,100 crore.

 

The company started construction of Palm Drive, its luxury residential project in Gurgaon, in 2007, but will take at least another year to deliver it, according to analysts. Its other residential projects running behind the schedule in Gurgaon include Palm Hills, Emerald Hills, Palm Gardens and commercial ones like Digital Greens, Palm Square, etc. Also, many of its projects in other parts of the country like Mohali and Shillong have also not been delivered.

The company, however, pointed out that the delay was not unique to Emaar-MGF, and that it was the case with the entire real estate industry. Emaar-MGF did a soft launch of its Dwarka-Expressway project, Gurgaon Greens, and Gomti Greens project in Lucknow a few months back.

Experts argue the project launch spree of the company since 2007 was linked to its eagerness to raise funds. Emaar-MGF, which could not come up with an initial public offering (IPO) despite testing the market several times, has been raising cash funds from project launches, they pointed out. The company operates only in the high end or luxury segment and it has no plans to get into affordable housing.

According to its IPO prospectus issued in 2007, the company has a diversified land bank across the country in 22 cities, including prime locations like Delhi, Gurgaon, Hyderabad, Kolkata and Pune. Among the prominent projects delivered are the CWG village flats in Delhi, Palm Springs in Gurgaon and Esplanade in Chennai.