After signing Rs 3,000-crore deal to buy Macdonald House in Central London on Thursday, Mumbai-based Lodha Group plans to buy more properties in London.
"We would look at buying other assets in London. We could look at either residential or commercial assets whichever makes economic sense," said Abhinandan Lodha, deputy managing director at Lodha Group, on the sidelines of a press meet here on Friday.
He said the company looked at many cities such as Dubai and Hong Kong before zeroing in on London to make its overseas foray. "We chose London because it was a global city and has mature and resilient markets."
Lodha has already opened a 1,000-sq ft office at Chester Square in London and hired former JPMorgan Global Assets Management managing director Tyler Goodwin as the CEO of the UK business.
The group is looking to pay the entire deal amount from its internal accruals and will not borrow debt or private equity to pay for MacDonald House, Lodha said, adding the developer has already paid 10 per cent of the deal money (around Rs 300 crore).
The seven-storey, 75-year-old building, located at 1 Grosvenor Square in London's Mayfair, is named after Sir John A Macdonald, Canada's first prime minister and currently houses the Canadian High Commission.
The company needs to pay the entire money by March next year, but Lodha plans to pay before that, he said. "We have had sales of Rs 14,500 crore in the last 18 months. We can fund this with our own funds."
Lodha said the group is also exploring options to hedge its currency risks in the next couple of days.
Lodha, which has tied up with US-based Trump Organisation for its Mumbai project, is looking to build high-end apartments on MacDonald House plot. The property has 150,000 sq ft saleable area with the prices hovering around 5,000 pounds in the Grosvenor Square area.
The developer is looking at an internal rate of return of 20-25 per cent over four years. The company expects to start the project in 12-15 months.
"London is a 200,000-apartment a year market and Central London's property market has grown six per cent," Lodha said.
Lodha was advised by London office of UK-based consultant Knight Frank.
Pranay Vakil, former chairman of Knight Frank India, said it was a strategic decision for most realty companies to diversify overseas when they attain a certain scale and growth rate.
"If you want to go abroad, then Middle East (West Asia) and London are the main markets where Indians buy properties. Hence, they must have chosen London," Vakil said.
