Unitech Corporate Parks - Not Rated - Motilal Oswal

UNITECH CORPORATE PARKS: Marked uptick in leasing from 2011; Total leased/ committed area at ~4msf; Not Rated

Unitech Corporate Park has witnessed a marked increase in leasing/ queries from 2011 onwards.

Management expects the total rental income from leased / committed area to be ~29m pounds/annum from 3QFY13.

As on Sep-10, based on the new valuation methodology, the six commercial projects of UCP aggregating to ~21.4msf have been valued at £285.7m.

UCP's NAV as on Sep-10 was £0.50 per share compared to £0.72 at Mar-10, and £0.52 per share at Jul-10 on a "pro-forma" basis. This represents a drop of 30.6%in NAV over the six months from Mar-10.

While we believe the new methodology introduced by the company to value its commercial assets is rational, the assumptions adopted in the valuation seem conservative, especially in the backdrop of steady improvement in leasing activities in commercial vertical. With outlook for IT / ITES sector further improving, we expect the commercial demand to gain momentum, going forward, which could bode well for UCP's NAV. Not Rated.

Source : Equity Bulls

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