Arvind SmartSpaces: Will it make smartspace for Retail Investors?

[abhijitchokshi]

Arvind infrastructure: Godrej Properties in the making?

Investment Rationale:

1. They are trying to create a brand in real estate similar to godrej properties which they aim to make it into top 10 real estate brands in the country. Except for godrej there is no other, pan india, good real estate brand (Their website has its CEOs interview in business standard which mention this). Also their sponsoring the GIHED event (largest property event in Gujarat) and getting awards of Luxury project of the year (Uplands) and Emerging developer of the year-Residential (although most awards r purchased ) shows that they r investing a lot of money in creating a brand.

2. They r following asset light model i.e. not blocking capital in land and hence most of the project is executed on sales proceeds - which is only possible in future if they successfully create a brand and land owners come to them for joint development like godrej

3. Their current projects have revenue potential of 2500cr (as per the presentation on their website) thus even if u assume about 10-15% PAT margin for a real estate project (which is very very conservative) than the profit potential for all of its projects in next 4-5 years is about 250-350cr and today the whole company is available at 190cr market cap

4. Another way of checking this calculation is that they r running projects totalling to about 1.5cr sqft as per the information memorandum…mostly in Ahmedabad and some in bangalore – taking profit per sqft of about Rs. 200-250 on a conservative side – the profit potential is 300-350cr and the whole company is available at 190cr market cap

5. Their largest project is Uplands in Ahmedabad where total revenue potential is Rs. 1200cr – as per the interview of its CEO on their website they sold stock of Rs. 200cr in such bad market till November 2014 – which was their full year’s sales target

6. In 2015 they booked profits of Rs. 10 cr in the 6th year of their operation, even if they book say Rs. 100cr profit in 2018-19 (which is where some of their current projects r expected to get completed, so on a project completion method they will be booking profits in the year of completion) and it gets lets say 20 PE (Godrej gets 40 PE currently) than the market cap becomes Rs. 2000cr

7. As per the management interview all of their projects r cashflow positive i.e. their capital involved is negative

8. So in a nutshell – a good upcoming brand, good and clean management, available at dirt cheap valuation (less than next 4-5 years profits), with great business model, good cashflows.

Discl: Starter position at 70 levels

Relevent Links:

http://www.arvindinfrastructure.com/news_events.php

http://www.arvindinfrastructure.com/IM-Arvind%20Infrastructure%20Limited-24.8.15-Compressed.pdf

http://www.arvindinfrastructure.com/Investors_Presentation.pdf

[aniket_nikumb]

Thanks for starting this thread. I briefly looked at the stock, but didn’t take a position as it ran away in circuits from high 40s. Couple of qs to ask:

• Out of the 1.5 cr sq.ft under construction per IM, c.1 cr is yet to be developed while c.0.5 cr is under development. I guess that further pushes cash flows out by quite a bit. Equity value = NPV of cash flows, so perhaps on a discounted basis, then 190 cr market cap (+ 30 cr debt) = 300-350 cr of net profit to be received

• What happens to the profitability if sales are delayed? My high-level channel checks indicate Gujarat property market is very weak - so sales are likely to be quite sluggish.

• Promoter quality/ Corporate governance? (Don’t have a view…but there were some comments on a VP thread in Arvind Ltd around quality that were a bit dis-comforting)

Having said that, I really like the absence of debt (c.30 cr) in this entity. The sector is in the dumps, which means this is likely a good time to buy. But, not sure if this is the play to back here. Other real estate names that are quite cheap relative to potential sales value are Peninsula Land, Nitesh Estates. Any experienced investors who can provide their insight on how to value real-estate companies?

[sammy11]

The company looks interesting. A brief of its financials:

(* long term debt is Rs 22.5 cr from Tata Capital payable in Sep 2017; unsecured’ bullet repayment. Short term debt is Rs 4.8 cr)

Investment thesis:
• Slightly difficult to project financials for each year
• Therefore, there is need for a big picture call
• Over 5 years, existing 14.3 million sq ft of development could yield sales of Rs. 2500 crore as per the company presentation (works out to appx. Rs. 1750 per sq. ft, which seems reasonable)
• Godrej properties average net margin for last 5 years is 15% (range 10.3-19%; 10.3% for FY15). Assume 10% for Arvind.
• Net profit works out to Rs 250 cr (Rs. 375 cr. Assuming 15% net margin)
• This is average of Rs 50 cr net profit per year (although it would be lower to begin with and would increase with time)
• Assume PE of 20 after 5 years (current PE of Godrej is 33).
• Market cap could be 20*50 = 1000 cr. i.e. 5 times of current market cap of Rs 200 cr. Sufficient margin of safety?

Risks:
• Execution ability
• Company needs to keep getting more projects so that growth continues to remain visible, so as to justify 20 PE
• Owners are mediocre – not pristine, but not a total chor also.
• No change in business model – continue to focus on residential and remain asset light
• Heavy comparison with Godrej properties

Annual report: http://www.arvind.com/pdf/annaul_finacial_reporting/2015/Subsidiaries201415/ArvindInfrastructureLtd.pdf

Change in inventory of negative Rs 37.05cr seems to have had a major impact on profitability. Reduction in trade and other receivables by Rs 73.9cr has positively benefited cashflows. Need to look deeper into these.

Just did a quick relative check (figures are rounded; please inform if there are any errors):

Views welcome.

Disclosure - initiated a starter position today. Not a recommendation. May add/or exit based on further study.

[onliabhishek]

Hi Aniket,

• U are right that out of 1.5cr, 1cr is yet to start. I guess thats why the total cashflows and profits are calculated over next 4-5 years. Their second largest project has revenue of 600cr and its a plotted development project, so there is hardly any construction cost to it. Company just have to build necessary infrastructure in and around the land parcel and sell the plots. So construction cost in such projects are between 25-30% of the total revenue. Arvind is 45% partner in tht project so total revenue of tht project should be about 1300cr (including the land owners share) and cost of say maximum 30% so say about 400cr, hence their profitability in tht project alone should be about 200cr over the period of time.

• Their largest project Uplands has a revenue potential of 1200cr, out of which in prelaunch they sold 200cr of stock which was way more than their full years target. So although the real estate market is slow, they seem to be selling good. Also its a golf theme based project which is the only golf theme project in one of the fastest growing city of Ahmedabad. So sales shouldnt be a challenge, which they have demonstrated as well.

• Promoters are Arvind limited, Sanjay Lalbhai group. They are supposed to be one of the very well respected and largest group in Denim in India. They have Mr. Vallabh Bhansali from Enam and Mr. Bakul Dholakia (Ex-Director IIM Ahmedabad) on their board of the parent company Arvind Limited.

• Also in my humble opinion, the market value of the company is present value of all future cashflows and not only future cashflows of next 4-5 years. The assumption by abhijit, I think doesnt include the reinvestment of the profits/paying back to shareholders by the company and hence provide a much larger and safe opportunity to invest.

Discl - Invested at about 75.

[rajpanda]

Hi Abhijeet,

1. Who invests the capital which is required for the construction ? It is invested from AIL’s books ?
2. In 6/12 projects under development are 100% AIL owned (no JD), so we need to have some understanding on Q1. Who will invest the money for construction, who owns the land currently, is it owned by AIL ?
3. In the other 6/12 AIL’s share is also north of 50%. Who will invest the money for such projects ?
4. Arvind probably is a good brand in Gujarat. But at all India level, I doubt it has any of the quality factor’s associated with it, like Godrej brand.
5. Next few years companies fortunes are tightly tied to upland properties fortunes as 50% of projected revenues are tied to it. Feels risky.
6. Perception that “Beyond Five” project is only residential plotting and very little needs to be done probably isn’t correct. Check our their plans http://www.arvindinfrastructure.com/about_beyond_five.php#horizontalTab2
   Also fact that their proportion in the project is 45% probably means, they will realize a revenue of 45%*600 cr = 270 cr. and have to spend on all the amenities listed above from that. Probably the land owner get’s the 330 cr. as cost of land and no more expenditure form his side. That’s how most JD works.
7. In Godrej properties case, the group land is owned by Godrej Boyce (Group company). Cost of the project development is also to be borne by Godrej Boyce. GP get’s a 10% share of revenue mainly for marketing activities, hence providing higher visibility of earnings without putting to much at stake. So we need to understand what’s the equation for AIL on these parameters.

[onliabhishek]

1. Who invests the capital which is required for the construction ? It is invested from AIL’s books ? – Most of the construction cost is borne from sale proceeds and some initial approvals cost and JD payment is borne from balance sheet. which as per their interviews all their projects have become cashflow positive.
2. In 6/12 projects under development are 100% AIL owned (no JD), so we need to have some understanding on Q1. Who will invest the money for construction, who owns the land currently, is it owned by AIL ? – In all the projects taken by Arvind on JD, construction cost is to be borne by Arvind and major cost will be funded from sales (verified in a call with company)
3. In the other 6/12 AIL’s share is also north of 50%. Who will invest the money for such projects ? – Major from sales and initial approvals cost from balance sheet
4. Arvind probably is a good brand in Gujarat. But at all India level, I doubt it has any of the quality factor’s associated with it, like Godrej brand. – Arvind as a brand is mostly famous for denim and textile – they are slowly launching “Arvind” as an individual brand which will be than used for many of its products including real estate like what godrej has done for all of its products
5. Next few years companies fortunes are tightly tied to upland properties fortunes as 50% of projected revenues are tied to it. Feels risky.- Yes that’s true
6. Perception that “Beyond Five” project is only residential plotting and very little needs to be done probably isn’t correct. Check our their plans – checked with company – its a plotting project wherein company on its website has given some model designs of bungalows or row houses which they can build for u if u r ready to pay for it http://www.arvindinfrastructure.com/about_beyond_five.php#horizontalTab22
   Also fact that their proportion in the project is 45% probably means, they will realize a revenue of 45%*600 cr = 270 cr. and have to spend on all the amenities listed above from that. Probably the land owner get’s the 330 cr. as cost of land and no more expenditure form his side. That’s how most JD works. – All the figures of sales written in the presentation are of company’s share and not total – so 600cr revenue means 45% of total and hence approx 1300 cr is total revenue
7. In Godrej properties case, the group land is owned by Godrej Boyce (Group company). Cost of the project development is also to be borne by Godrej Boyce. GP get’s a 10% share of revenue mainly for marketing activities, hence providing higher visibility of earnings without putting to much at stake. So we need to understand what’s the equation for AIL on these parameters. – In arvind’s case apart from the given info its nt known what structure they will do for their other land parcels. The intention of management is to separate real estate business into other entity and let a professional team focus on it and they focusing on their core business. Its written in the management discussion part of 2015 annual report.

[pkk123]

1. Out of that 2500 Cr revenue, they will get only about 2000 Cr. because most of the development projects are in partnership with land owners who will take away the remaining revenue.
2. Most of the development is not yet started and real estate being a highly regulated sector, not sure if they can deliver in promised timelines.
3. Ashiana is selling at similar valuations I think.
4. They are not a well known group. Which known brand do they have? In Gurgaon, a well known inverter maker Microtek is launching RE products but should they be considered a well known brand in an unrelated field?
5. Compared to their main business, this business is really small so not sure how much management bandwidth will they spend on this.

I think price captures all positives. Now they need to execute really well to grow but that’s true of any company.

[onliabhishek]

Out of that 2500 Cr revenue, they will get only about 2000 Cr. because most of the development projects are in partnership with land owners who will take away the remaining revenue. - No 2500cr is their share from JD
Most of the development is not yet started and real estate being a highly regulated sector, not sure if they can deliver in promised timelines. - all the ongoing projects shown in the prez have already started, some since last year and some since last 2 years
Ashiana is selling at similar valuations I think. - Ashiana is in diff segment - which is affordable housing. As per management they want to be in one notch above affordable housing segment
They are not a well known group. Which known brand do they have? In Gurgaon, a well known inverter maker Microtek is launching RE products but should they be considered a well known brand in an unrelated field? - Yes you are right that they r nt wellknown, but thats y they r available at 180-190cr valuation. If all the story would have already played out than they wouldnt be available at such valuation. So thats y u go through management interviews, annual report etc and try to find out what they want to do and see if they are capable or nt.
Compared to their main business, this business is really small so not sure how much management bandwidth will they spend on this. - Management has thats y designated a professional management team for this business and seperated it in a diff entity. They have a lot of land parcels of their own and as per management interview they are positioning themselves in same line as godrej. Again they r ofcourse nt as big as godrej but “positioning” themselves in tht manner

I think price captures all positives. Now they need to execute really well to grow but that’s true of any company. - U r right… This is true for any company that you will be buying

[manishinlucknow]

Few doubts
The company doesn’t seem to be having any land holding. As per BS Mar 2015, Tangible assets of about 2 cr and i can’t find any freehold land.
As per their presentation, some of the projects , it is mentioned DA-Arvind land. I assume the land belongs to either Arvind ltd or another group company. But i don’t understand then why the percentage ownership is 100%.

The long term and short term advances are very high.

Understand that the company intends to develop 14 m sq ft of space. And it is expected that the cost of construction will come from sales proceeds ( advance from customers ) but as of 31 mar 15 advance from customers is mentioned as only 2.75 cr ( 4 cr in mar 2014) which seems pretty low.

In order to execute the projects the company needs to sell heavily in advance and same should reflect in Balance sheet.

Also need to monitor inventories. Mar 15 it stands at abt 76 cr.

[nirajiitkgp]

Manish, You are right. As per original plan of the company management wanted to transfer all land holding belonging to Arvind to Arvind Infra. But later they changed plan and now Arvind Infra dont have any land holding. It is currently just project planning and marketing company for Arvind Ltd. However in due course company can be a full fledged real estate player. Besides sub 200 cr market cap for an experienced management like Arvind is risk worth taking. Currently even during downturn no real estate company having development project of 15 million sq ft have market cap of less than 500 cr. As company start showing some progress and bookings and more people come to know about it potential it can touch those valuation in due course.
Disc: Invested from much lower level.

[sammy11]

Since there is a lot riding on the Uplands project, I decided to call the project marketing/sales department to get some information in addition to what is already available on their site.

• Out of land area of 135 acre, the FSI is only 0.25, that is
  construction will be only on 25% of the area, leaving 75% as open
  spaces.
• Environmental clearance has been obtained. No other
  approvals are pending. Construction of the villas will start this
  month
• The Golf course is ready. Landscaping is ready
• Power and water connections are available.
• All permissions related to the land are available. The land is owned by another party (independent, not Arvind Ltd) which has 25% stake in the project, with 75% being with Arvind Infra. Arvind Infra is responsible for construction, sales and marketing. While master plan has been approved by the civic authorities , approval is awaited for some amendment that they made later.
• Total project is for construction of 800 villas, with 1st phase being 280 villas, whose construction will begin shortly. Possession will be within 36-42 months. The 2nd phase will be
  launched later (timeline not decided yet). The entire project will be completed by 2020.
• No debt is being taken by Arvind Infra (I am not sure how much to rely on this as the info came from the marketing department)
• 4, 5 and 6 bhk villas are available (no apartments). Plot area and construction area options are as follows (see attached file also)

o 4bhk
 (1) plot area 640 sq yard / construction area 325 sq yard – total cost Rs. 1.56 cr (excluding government costs such as stamp duty, registration etc., but including maintenance, club house etc charges)
 (2) 850/430 – 2.06 crores
 (3) 1128/430 – 2.4 crores
o 5bhk – 1500/550 – 3.13 cr
o 6bhk – plot area 2000-2700 sq. yard and construction area 675 sq. yard. Starting from 4.5 crores.

• No cash payment – all white (I checked this specifically). In all their projects it seems.

Rough back of the envelop calculations:
o Average constructed area per villa is appx. 616 sq yard which is 5544 sq ft.
o Average cost per sq. ft. works out to 4200 Rs.
o Average villa cost is Rs 2.25 cr. For 800 villas it is 1800 crores. 75% of which works out to 1350cr. Sort of gells with management presentation which gives their share of revenue as Rs 1200 cr.

This all sounds very posh and upmarket, however chats with a few friends in Ahmedabad indicate that such aspirational projects have a fair bit of demand in that area. If some board members are from Ahd, then their views are solicited.

Cant attach their presentation and floor plans as the file sizes exceed permitted limit.

Current Price List & Payment Schedule-Uplands.pdf (35.3 KB)

[rks00]

Hello everyone, relatively new to this forum been investing for a few years now (not sure why I did not stumble on this forum earlier) Anyways, on the Uplands project, let’s do some quick math.

Based Vinay (sammy’s) post, what I understand is that the land owner gets compensated 25% of the sales on the project, while Arvind incurs all costs and gets compensated 75% of sales. While Vinay addressed the sales portion of the equation, let’s take a closer look on the cost side of the equation.
Conversion factors:
1 Acre = 43,560 Sqft.
1 sq yard = 9sqft. (Source – Google)

Cost of Villas (Built up area)

Built up area = 135 acres * 0.25 (FSI) = 33.75 acres = 14,70,150 sqft.
In the attachment, the construction cost = 2,500/sq ft.
Cost of constructing 800 villas = 2,500 * 14,70,150 = 367.5 cr.

For the remaining 101.25 acres assuming a cost of 900/ sq ft (This number is subject to debate) for the golf course, land scaping, entertainment centers / club house, equipment etc. etc. that works out to another 396 Cr.
So Total cost (material + labor) = 763 cr.

Let’s add another 10 % of sales (randomly) for marketing, SG&A, cost overruns etc. that brings the total cost to 763 + 120 = 883cr (rounding to 900 cr)

Based management guidance of 1,200 cr revenue, are we looking at an EBITDA of 1200 – 900 = 300 cr just for this one project?

Let’s spot check my numbers - This works out to a 25% EBITDA margin which I think kinda seems reasonable for this project given that Ashiana has an ebitda margin of approx. 26 – 30% , and godrej on a standalone basis of 20%.
Am I missing something out? This is clearly oversimplified math, but on the basis of this, Arvind Infra looks pretty interesting!

I guess in order to definitively answer the question raised previously as to whether all this is baked into the current market price, we should try and do the same analysis (EBITDA projection) for all outstanding projects, and based on expected completion dates, present value EBITDA to today and see what it looks like. (Just a suggestion) Any thoughts?

P.S. I do not have any positions in Arvind infra.

[nirajiitkgp]

Arvind Infra CEO Interview

[sammy11]

This week I decided to get some information on their 2nd largest project – Beyond 5, which is expected to contribute Rs 600cr to the company’s topline over the next 4-5 years as per the company’s presentation.

This is also located in Ahmedabad, about 10-15 km away from the Uplands project. This has a 9-hole golf course and a Sachin Tendulkar – designed clubhouse (SMAASH) of 60000 sq feet (that’s massive!).

Around the golf course, Arvind will be building around 100 villas which will occupy 2% of the land area. The remaining area will be developed and sold as plots. There are totally about 600 plots of varying sizes starting from 500 sq yard, including the 100 plots over which Arvind will do the construction. Depending on the buyer’s requirement, Arvind can undertake construction activities over the vacant plots or else the buyer can do his own construction. They also intend to start a property management arm and help in leasing villas to visitors on behalf of the owners. But that’s for much later.

Beyond 5 is still in pre-launch stage. 80% of the approvals have been received and remaining are expected by year end. Which is when they will launch the project. The rates mentioned below are the pre-launch rates which could go up when the project is launched. This is a joint development with the land owner (Arvind does not own the land). Arvind will develop, construct, market and maintain (for about 2 years after handover, after which the society would take over). Land has been already been fully converted to Non-agricultural and title is clear. The project will be completed over 3 years. Fencing has been done. Road network construction is under process. Office building will be fully ready in November. 25-30% of the project has already been sold out.

The marketing person candidly advised that if someone is looking for investing and does not intend to stay there, the plots are the best option. Beyond 5 has been designed more as a weekend getaway and not for staying all the time, although the buyer is free to do so if he wants. If someone is looking at their first or second home, then Uplands is a better choice. Within Beyond 5, purchasing a constructed villa makes sense for those who intend to use it frequently, like say every month or fortnight. For less frequent users, it does not make sense as the maintenance charges would he high. He informed that the land price is already double of what they had negotiated with the owner when they entered into the agreement 2 years back. Since then there have been several developments in the surrounding area such as a resort, a water park, a club etc (I missed the names, but he mentioned one owned by Bakeri family – related to Achal Bakeri of Symphony).

Now for some statistics:

• Land cost is 5500 Rs per sq yard, plus additional 1000-1500 extra per
  square yard depending on golf-facing, 30-meter-road-facing,
  18-meter-road-facing, corner plot etc.
• Construction cost is 17500 per sq yard.
• Villas range from 1bhk to 4 bhk with 147, 256, 360, 560 sq yard area
• Plots range from 500-1200 sq yard.
• A 1bhk villa would cost around 60lakh, and a 4 bhk around 1.8-2 crores – land and
  construction put together.
• A 1000 sq yard plot would cost around 68 lakhs.

All cheque payments, in white. No black money. 20% down, 3.5% in 12 instalments, and 1.5% over the next 24 months (appx). The entire project is self funded by Arvind.

I wasn’t able to get a breakdown in order to arrive at the Rs 600 cr figure mentioned by the company in their presentation.

Observations – like Uplands, this also appears to be a posh sort of high end project – but more like a resort for short stays. When asked about the demand for so many villas (800 of Upland and 100 of Beyond 5), the marketing person started singing praises about the potential of the area (never ask a barber if you need a haircut).

Profitability from this project would be lower since majority is plot development, however investment required from the company would also be lower.

These 2 projects constitute 72% of the expected revenue, with the remaining 9 projects contributing 28%. So there is significant concentration risk. While Arvind as a group may have the ability to execute the projects, demand scenario for upmarket projects in Ahmedabad is something that needs investigation. Their remaining projects are smaller “fast moving” constructions, and new launches in this category would be necessary to sustain cashflows.

There seems to be a significant gap between the “potential” of the company and current market cap of 160 crores. The market could get more confident as the offtake improves and if they announce new launches.

Discl – not a recommendation. Had taken a starter position earlier and added a bit recently.

[nirajiitkgp]

As per their draft listing document submitted to Sebi, there is 1032972 option granted (mainly to two management person) at exercise price of Rs 41.5 and can be exercised within three years from date of listing. Usually stock options granted to lot of discount from real value of stock, so around Rs 50 can be safe level for new entry. Also i have observed in last financial year majority of sales and profit booked in last quater (Q4) while Q1 and Q2 results are usually very subdued so coming Q2 result on nov 9 may not be great thats why stock price is reacting negatively. Also management is clear that in next 1-5 years they are expected to book revenue of around 2500 cr which makes avg revenue per year of around 500 cr and PAT of around 75 cr which can easily support mcap of over 500 cr. Key risk may be once with initial setback in projects management may loose focus in the company.

[rks00]

Hi Vinay, thanks for filling us in on the beyond 5 project. I think the revenue forecasts of management seem to be pretty reasonable based on the discussions in this thread, there is a significant probability that they will meet their top line numbers, concerns mainly may be on the bottom line though, potential cost overruns, project delays due to regulatory delays etc.

I think the more important question is, can they at the least maintain this revenue trajectory, i.e. Do an average of 500 crores worth of sales/ year consistently (if not grow that further) ? So the key is can they find enough worthwhile projects in the coming years to sustain this 500cr/ year revenue, especially given the fact that so far they have chosen to restrict themselves to just 2 geographies, BLR & Ahemdabad. Clearly they may venture into other markets, but then, in those markets they don’t have any brand recognition, so would land owners be willing for JV’s in those other cities in the same way they are in Ahemdabad?

Let’s try and see how much of development work they need to do each year.

Clearly we can debate on the assumptions above in terms of avg size / villa or price/villa etc, and we may arrive at slightly different total development numbers. In any case the key questions are as following

1. Will Arvind infra be able to get into JV’s to the tune of 68 - 70 acres / year, every year, consistently? (there will be big projects that will skew the averages, but they need to announce atleast 1 big (Uplands) type project every 2 years)
2. Not too clear on the revenue recognition front on this, but if a % of project completed method is being used, they will need to construct 22 lakh sqfeet / year. That’s a lot! Can they deliver? Will they find this amount of worthwhile projects to undertake, each year, every year consistently? (I understand that prices inflate, so this # may come down a bit into the out years)

The key point is project pipeline (apart from those already announced) I haven’t seen them add any new projects for a while, do deals for more JV’s etc.

Does anyone happen to know about the “New Haven” upcoming project? how big, where etc? And not too sure what to think of their megapark project, would small businesses be willing to shell out so much money for a fancy workshop / industrial shed?

Disc: significantly invested at cmp

[vvenkat999]

Porinju has again bought 1,30,000 shares of Arvind Infra for his Equity Intelligence PMS at 6th November.
http://porinjuveliyath.in/2015/11/05/equity-intelligence-buys-more-arvind-infra/

[chintans]

I am originally from Ahmedabad and checked locations of Uplands and Beyond 5. These are atleast 10 km away from the periphery. Most sane people wouldn’t even consider buying a farmhouse at location of Beyond 5. Reminds me of Adani Shantigram 10-15 years back. Many HNIs bought villas but didn’t have anywhere to buy even basic ration within few km. However, just because I can’t understand why people buy at such locations doesn’t mean people don’t or won’t. Most often it’s the pump and dump strategy and fear of missing out. The prices seemed slightly on the higher side for these far-off locations.

I’ve not stayed much in Ahmedabad in last 5-6 years, so might not have caught up with inflation or periphery expansion.

[vivek_mashrani]

Agreed Chintan. But I think Golf Villas make sense somewhat far from city boundries only. I mean it will take crores to get a golf villa near 5 km from Ahmedabad since as I understand the areas in outskirts are currently priced at hell expensive rates.

[rks00]

Hey Chintan, thanks for your honest view on the Uplands and beyond 5 projects.

From their most recent press release -

Uplands - Total units available for sale 282, Units booked till data 94. Exactly a third (Pre launch) Based on the pictures posted in their quarterly presentation, I don’t think even the gold course is ready yet let alone a model villa. And the targeted completion date is 2020. So I would assume super early days, in spite of having nothing to show far, no golf course, model villa, I’m quite surprised with the response they have received. Did you get a chance to visit Uplands personally? Your views / scuttle but with the on site staff about response etc. will be greatly appreciated.

Beyond 5 - Again, super early stage of the project apparently (would appreciate it, if you can update us on this if you have visited the location) Totally agree with you (I have the same point of view) don’t understand why people would want to buy so far away from the city. But keep in mind this is just a weekend home, a get away from the noise & pollution of the city, so not too sure how relevant things like no grocery stores etc is, as it is meant just for the weekends.

Since you are in Ahemdabad, as and when you get the time could you maybe visit these locations, speak with the actual on site construction supervisors to get their views on is construction delays if any, the customer profile (who are these people that are buying these villas) so that we can get a more qualitative understanding of Arvind infra’s biggest projects?
It would be a great help if anyone from Ahemdabad could do this.

Thanks