Final Results
West Pioneer, which intends to become a leading developer and operator of shopping malls in west and southern India, announces its preliminary results for the year ended 31 March 2007.
Highlights
- Successful IPO in December 2006 raising $40 million
- Kalyan Project progressing on track
- 55% of Phase I construction completed
- 60% of Phase I and 10% of Phase II gross leasable area signed up with retailers
- Acquisition agreement for second land parcel in Aurangabad signed
- Negotiations underway with two major anchor retailers
- Advanced discussions for further land parcels in Nashik and Pune
- Senior management team significantly strengthened with the appointments of Tony Ward as Vice President responsible for real estate acquisition and design, and Nitin Dattani as an Executive Director
- Net assets at 31 March 2007 of US$42.6 million (2006 US$1.1 million)
Amit Jatia, Chairman of West Pioneer, commented on the results: “We are delighted by the progress made at West Pioneer since the IPO and are confident of building the platform to provide the basis of sustained future growth and attractive returns for our shareholders."
Chairman’s statement
We were delighted to join the AIM market in December 2006 and the funds raised at that time have enabled West Pioneer to pursue its objective of becoming a leading shopping mall and mixed mall/hotel owner and operator in west and southern India.
Our Kalyan Project is progressing well and we were pleased to be able to close the acquisition of further land in Aurangabad earlier in the year where we intend to develop a mixed mall/hotel property. We believe that both Kalyan and Aurangabad are excellent locations consistent with our strategy to open “consumer-centric” shopping centres in "Tier II cities" in west and southern India where we believe there is potential for a rapid growth in middle class income groups and land prices have not yet appreciated to the levels seen in the larger Indian cities. We are also in advanced discussions to acquire further land parcels in other areas which meet our investment criteria and price targets and look forward to making further announcements in the future.
These are truly exciting times in the economic and business landscape of India and we believe that West Pioneer is establishing a strong platform to capitalise on the continued growth in the Indian economy which grew at 9.4% in the year to March 2007. Economic growth is precipitating a burgeoning middle class which in turn is leading to the well documented increasing demand for organised retail space.
Kalyan Project
Construction of our shopping mall development in Kalyan continues on schedule with approximately 55 per cent. of construction of Phase I completed. We are pleased that the project remains on schedule with Phase I, comprising approximately 500,000 sq. ft. of gross leaseable area, on track to becoming operational by the end of 2007. We also expect to commence construction of Phase II, comprising approximately 250,000 sq. ft. of gross leaseable area, by the end of this year with completion by the end of 2008.
We have also managed to secure retailers for both Phase I and Phase II with approximately 60% and 10%, respectively of gross leaseable area pre-let to anchor and other strategic tenants. We expect that the lower ground floor amounting to over 100,000 sq. ft. will be handed over to the retailer during the third quarter of 2007.
Aurangabad
Following the announcement in January 2007 of the agreement to acquire approximately 750,000 sq. ft. of land in Aurangabad, the Company is progressing as planned with the project, which is intended to be a mixed-use shopping mall/hotel development. A preliminary survey of the land has been completed and the necessary permissions are being filed with all permissions expected to be obtained prior to the end of 2007. There is considerable interest from retailers to lease space within the site and currently we are in advanced negotiations with two potential anchor tenants.
Other initiatives
We continue to pursue land acquisitions in other strategic locations in Tier II cities in west and southern of India and are confident of achieving our target of at least 4 million sq. ft. of gross leaseable retail space within 5-7 years. As stated at the time of our admission to AIM, we are also planning the development of at least two fully operational hotels within that time-frame either as part of a mixed hotel/shopping mall development or on a stand alone basis.
We are, in particular, in advanced discussions to acquire land parcels in Pune and Nashik and have also commenced preliminary negotiations on specific locations in Indore and Nagpur. While we are at the preliminary due diligence stage and so there is no guarantee that we will acquire land at any of these specific locations, we remain focused and hopeful that we will be able to report news of further additions to our portfolio in the near future.
Strengthening of Management
We have almost doubled the size of our team since the IPO and continue to recruit exceptional staff. We were pleased to announce the appointment of Nitin Dattani as a Director responsible for coordinating the Company’s activities outside of India, in particular in relation to financial and investor relations matters. Nitin is a chartered accountant and has been a long term advisor to the board of West Pioneer and its India subsidiary, Westfield Retail Pvt Limited.
We were very pleased to appoint Tony Ward as Vice President, Real Estate Development at Westfield Retail, our India subsidiary company, in January 2007. Tony was previously at Wal-Mart Stores, Inc and is responsible for site selection, design and construction. We are also in the process of recruiting an international mall manager which we expect to appoint by the end of July 2007 in anticipation of the good progress being made at Kalyan in particular.
Outlook
This has been a momentous period for West Pioneer and we would like to take this opportunity to thank the outstanding management team, our external advisors and of course our shareholders for assisting and supporting us through the IPO process and beyond.
We are close to the point of completing our first round of investments ahead of schedule and are already considering the next phase of developments including funding options. We hope to update shareholders in due course on both current and future initiatives.
Amit Jatia, Chairman
For further information, please contact:
| West Pioneer | |
| Amit Jatia, Chairman | Tel: +44 (0) 20 7398 7700 |
| Jayant Sohonie, Chief Executive Officer |
| Libertas Capital | |
| Aamir Quraishi / Andrew Hardy | Tel: +44(0) 20 7569 9650 |
Media Enquiries
| Abchurch Communications | |
| Heather Salmond / Leena Patel | Tel: +44 (0) 20 7398 7700 |
| leena.patel@abchurch-group.com | www.abchurch-group.com |
Notes to Editors
West Pioneer is a leading developer and operator of high-quality consumer/retail centric shopping malls in India. It was established by the prominent Mumbai based Jatia family to pursue opportunities in the rapidly growing organised retail and hotel sectors in India. The Group intends to acquire land in strategic locations in west and southern India, primarily in Tier Two cities. The land will be used to build, own and manage shopping malls, hotels or mixed mall/ hotel complexes.
The real estate and property development skills of the Jatia family, and Amit Jatia in particular, have been integral to the establishment and ongoing development of McDonald's operations in India, providing expertise in site acquisition (identification, feasibility studies and negotiation) and site development (design, tendering, engagement and management of external consultants).
The shopping centres' design will focus upon a contemporary style with the aim of reducing development costs and ongoing energy consumption. West Pioneer has already commenced the development of its first shopping mall in Kalyan, 30 miles north-east of Mumbai. A thorough selection process of the retail mix has taken place and the project is expected to be completed by the second half of 2007.
The retail market opportunity in west and southern India is derived from a combination of a virtually unpenetrated organised retail environment, growth in the middle class population, greater transparency in the property market and improved infrastructure development which provides access to the market.