A BRIEF STUDY ON EMAAR-MGF

AN EMERGING REAL ESTATE BARRON

BY

PRESENTED TO EMAAR GROUP (GROUP-4)

PROF. ANURAG YADAV
PGDBA-I, SEC-B

• NITESH KUMAR B28

• ARUN SINGH B9
• AMIT GUPTA B4
• GARIMA KUMARI B18
• MUKESH PANDEY B24
• BISWARUP
CHATTERJEE B14

1
 TABLE OF CONTENTS

ELEMENTS PAGE NUMBERS

• COVER PAGE 1
• TABLE OF CONTENTS 2
• TITLE & SCOPE OF THE STUDY 3
• METHODOLOGY 4
• ABSTARCT 5
• MISSION AND VISION 6
• THE REAL ESTATE SECTOR IN INDIA 7-16
1. EVOLUTION
2. KEY CHARACTERISTICS
3. KEY SEGMENTS-RESIDENTIAL,
COMMERCIAL, RETAIL, HOSPIATALITY.
• INTRODUCTION 17-34
1. OVERVIEW 17
2. HISTORY OF THE GROUP 23-25
3. STRENGTHS 25-30
4. STRATEGY 30-33
5. ORGANISATIONAL HIERRARCHY 33-34
• BOARD OF DIRECTORS 35
• FIG.1-LOCATION MAP 36
• CHART 1.-LAND ACQUISITION PROCESS 37
• PROJECT PLANNING & EXECUTION 38-40
• SALES AND MARKETING 41-42
• FLOW DIAGRAM 42
• RESIDENTIAL PROJECTS 43-48
• COMMERCIAL PROJECTS 49-51
• SOME LOCATION PLANS 51-52
• NEW DEVELOPMENTS 53-54
• STATEMENT OF ASSETS AND 55
LIABILITIES AS ON 31ST MARCH, 2007
• WHY EMAAR MGF IS A 56-62
BIG BET FOR INVESTORS?
• CONCLUSION 63
• REFERENCES 64
2
 TITLE & SCOPE OF THE STUDY

This brief insight is all about EMAAR-MGF Land Limited.

Emaar MGF Land Limited is a joint venture between Emaar Properties PJSC
(“Emaar”) of Dubai and MGF Development Limited (“MGF”) of India. Emaar
is one of the world’s leading real estate companies – having developed
approximately 45.0 million square feet of real estate across residential,
commercial and other business segments and with operations in 16 countries, as
of August 31, 2007. MGF has over the last 10 years established itself as one of
the key players in retail real estate development in Northern India.

The obvious reason for having the group effort on this topic is to find out how
two different companies from two different country works so efficiently to
leverage the strategic relationship with a diversified business model especially
concentrating on real estate with an excellent execution capability. They have
already attained financial strength within these couple of years with a strong
emphasize on experienced management practice.

Registered Office: ECE House, 28, Kasturba Gandhi Marg, New Delhi 110
001, India
Tel: +91 11 4152 1155; Facsimile: +91 11 4152 4619

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 METHODOLOGY

We have ailed different mechanism to make our effort more viable and
successful. Some of them are-

• Internet searching

• Red Herring Prospectus

• Company bulletins

• Real estate magazines

• Oral references

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 ABSTRACT

This report is a journey with an insight into every possible aspect of EMAAR-
MGF group. It includes the overview about the joint venture, projects
undertaken so far, new and upcoming projects, financial fact sheet, other
interested areas, location map of some of its project, its organisational
hierarchy, its mission and vision, stock market performance, venture with other
partners etc.

We have tried to collect and present every possible information about our
group. This is an amalgamated effort that we expect to be worthy once it get the
approval from respective concern.

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 OUR VISION

To be India’s Leading and Most Admired Real Estate Company

OUR MISSION

Develop and deliver unique lifestyles and work place environments in

India through:

• World Class Quality

• Socially Responsive Communities
• Integrated Infrastructure
• Iconic Master-planned Developments
• To be recognized as a Responsible Corporate Citizen and an “Employer of
Choice".

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 THE REAL ESTATE SECTOR IN INDIA

Real estate involves the purchase, sale and development of land, residential and
non-residential buildings. Real estate sector activities also encompass activities
in the housing and construction sector.
EVOLUTION OF THE REAL ESTATE SECTOR
Historically, the real estate sector in India has been unorganised and
characterised by various factors that impeded organised dealing such as the
absence of a centralised title registry providing title guarantee, lack of
uniformity in local laws and their application, non-availability of bank
financing, high interest rates and transfer taxes and the lack of transparency in
transaction values. In recent years, however, the real estate sector in India
has exhibited a trend towards greater organisation and transparency,
accompanied by various regulatory reforms. The trend towards greater
organisation and transparency has contributed to the development of reliable
indicators of value and organised investment in the real estate sector by
domestic and international financial institutions and has resulted in the greater
availability of financing for real estate developers. Regulatory changes
permitting foreign investment are expected to further increase investment in the
Indian real estate sector. The nature of demand is also changing, with
heightened consumer expectations that are influenced by higher disposable
incomes, increased globalisation and the introduction of new real estate
products and services. These trends have been reinforced by the substantial
growth in the Indian economy, which has stimulated demand for land and
developed real estate. Demand for residential, commercial and retail real estate
is rising throughout India, accompanied by increased demand for hotel
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accommodation and improved infrastructure. Additionally, the tax and other
benefits applicable to SEZs are expected to result in a new source of demand.
As can be seen from the charts below, CRIS INFAC expects cumulative
investments of Rs. 5,106 billion in real estate-related construction, leading to
8,288 million sq. ft. of additional space between fiscal 2006 to 2008 (Source:
“Construction Annual Review” (February 2006)).
KEY CHARACTERISTICS OF REAL ESTATE SECTOR
The Indian real estate sector has traditionally been dominated by a number of
small regional or local players with low levels of expertise. The sector has seen
limited inflow of institutional capital and has used high net-worth individual
and other informal sources of financing as the major source of funding, leading
to low levels of transparency. This is rapidly changing as the sector is
witnessing far higher growth rates and significantly improved quality
expectations as India gets better integrated with the global economy.
Some of the key characteristics of the Indian real estate sector are:
• Highly fragmented market dominated by regional players – Rapid growth in
the last decade has seen the emergence of larger players that have differentiated
themselves through superior execution and branding. Further, these players are
now able to capitalize on their early mover advantage with high market share
but remain confined to local or regional markets. While the larger regional
players are now initiating efforts to develop a broader geographic presence,
their home markets continue to generate a majority of their profitability.
• Local know-how is a critical success factor in the development phase – One
of the key reasons for the emergence of local developers is the critical
importance of local knowledge and relationships in ensuring successful and
timely development of real estate projects. Property is a state-governed subject

8
in India and the rules and regulations that affect, among other things, approval
processes and transaction costs, vary from state to state.
• High transaction costs – The real estate sector has traditionally been
burdened with high transaction costs as a result of stamp duty on transfers of
title to property that varies state by state. Though efforts are being made at the
state level to reduce the stamp duties, they continue to be as high as 11% in
certain states.
• Enhanced role of mortgage financing – Over the last five years, a significant
portion of new acquisitions, particularly in the larger cities in India, has been
financed through banks and financial institutions. This has been aided by a
sharp decline in interest rates and broad availability of financing products, due
to aggressive marketing and product development by financial institutions.
The rapid growth witnessed in the Indian real estate sector is due to a
combination of strong demand drivers, increased availability of capital for the
sector, as well as historical supply constraints.

KEY SEGMENTS IN REAL ESTATE INDUSTRY

RESIDENTIAL DEVELOPMENT

The growth in the residential real estate market in India has been largely driven
by rising disposable incomes, a rapidly growing middle class and youth
population, low interest rates, fiscal incentives on both interest and principal
payments for housing loans, heightened customer expectations, and increased
urbanisation and nuclearisation. In connection with a review of opportunities in
the Indian real estate sector, Jones Lang LaSalle’s publication “The New
Investment Mantra – Understanding Risks and Returns in the Indian Real Estate
Sector” (July, 2006), highlights that:
• India’s housing shortage increased from 19.4 million units in fiscal 2004 to
22.4 million units in fiscal 2006 and is expected to rise further.

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• The retail market for mortgages is expected to further grow at a CAGR of
17% from USD16 billion in fiscal 2006 to USD30 billion in fiscal 2009.
Further, Cushman & Wakefield have noted that there is scope for 400 township
projects over the next five years spread across 30 to 35 cities, each having a
population of more than 0.5 million and that the total project value
dedicated to low and middle income housing in the next seven years is
estimated at USD40 billion. (Source:“Opportunities for Private Equity
Investment in Indian Real Estate” (3rd Quarter, 2006)).

Drivers of demand in residential real estate market:

According to NCAER’s 2005 report “The Great Indian Middle Class”, the
number of households with annual incomes of between Rs. 2,000,000 and Rs.
5,000,000 per year, Rs. 5,000,000 and Rs. 10,000,000 per year and in
excess of Rs. 10,000,000 per year is expected to increase in size by 23%, 26%
and 28%, respectively, between fiscal 2002 and fiscal 2010. These higher
income households will be target customers for mid to luxury residential
developments offered by premium residential property developers. In addition
to rising income levels and increasing affordability, changing demographics,
lower interest rates, rising disposable incomes and fiscal incentives have
spurred demand for real estate in India.

• By 2013, India is expected to add 91 million people to the working population

(aged 25-44 yrs). Over the next 20 years, the working age population is
projected to grow at 1.9% per annum. (Source: Ministry of Urban Affairs,
Government of India, 2006)

• Favorable economic environment has led to a change in the income

distribution pattern with an increasing concentration of families in the middle
and higher income groups Further, nuclearisation of Indian families has
accelerated the demand for mortgages and for new housing. It is estimated that
20 million additional residential units will be needed over the next few years to
meet housing demand. Rising income levels and greater job creation,
particularly in sectors such as business process outsourcing and financial
services is also resulting in enhanced demand for quality housing. Further,
housing mortgage rates have declined from 14% to approximately 7.5-8.0%
over the last five years, making it easier for the expanding middle-class to buy
homes. This decrease, coupled with aggressive marketing and innovative
schemes, has created greater consumer desire for mortgage financing.

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Drivers of Real

COMMERCIAL DEVELOPMENT

The recent growth of the commercial real estate sector in India has been fuelled
in large part by the increased revenues of companies in the services business,

11
particularly in the IT and ITES sectors. Industry sources expect the IT and ITES
sectors to continue to grow and generate additional employment, which is
expected to result in increased demand for commercial space. The charts below
illustrate the rapid growth experienced by the IT and ITES sectors in India:

Supply

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RETAIL DEVELOPMENT
CRIS INFAC estimates that retail spending in India in fiscal 2005 was Rs. 9.9
lac crore, of which organised retail accounted for Rs. 35,000 crore, or
approximately 3.5%. The organised retail segment in India is expected to
grow at a rate of 25% to 30% over the next five fiscal years. The growth of
organised retail segment is expected to be driven by demographic factors,
increasing disposable incomes, changes in perception of branded products,
the entry of international retailers into the market, the availability of cheap
finance and the growing number of retail malls (Source: “Retailing Annual
Review” (September 2005)). The major organised retailers in India currently
include Pantaloon, Shopper’s Stop, RPG Group, Landmark Group, Tata Trent,
Globus, Piramal Group and Provogue India. While the organised retail segment
has so far been limited to larger cities in the country, retailers have announced
major expansion plans in smaller cities and towns. The growth of organised
retail in India will also be affected by the reported entry into the sector of major
business groups such as Bharti, Bennett & Coleman, Hindustan Lever and Hero
Group. International retailers such as Metro, Shoprite, Lifestyle and Dairy Farm
International have already commenced operations in the country while global
retailing giants like Walmart and Carrefour have announced plans to enter
India. CRIS INFAC estimates that, over the next five years, 73.78 million sq. ft.
of floor space and Rs. 369 billion of real estate investment will be required to
sustain the growing organised retail market (Source: “Retailing Annual
Review” (September 2005)). The last two or three years have witnessed a
proliferation of shopping malls, enclosures having different format of retailers
and usually including anchor tenants who cover large areas and are important
for attracting footfalls. Malls offer value in terms of variety of shops and lease

13
out floor space to individual shops which are enticed by the economies of scale
resulting from sharing of cost

India has four metros: Mumbai, Delhi, Kolkata and Chennai, and an equal
number of mini metros: Bangalore, Hyderabad, Ahmedabad and Pune. Initially,
most retail players launched their ventures in the metros and mini metros.
However, of late, the retail phenomenon is spreading to regional centres across
the country. Players are entering these cities early to gain a first-mover
advantage and enjoy benefits of a larger customer base and a higher share of
loyal customers. Over the past few years, the share of these cities in the
percentage of organised retail has been growing steadily. CRIS INFAC
estimates construction investments of Rs. 112 billion over the next five years
leading to around 105 million sq. ft of mall space by 2010 (Source:

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Construction, Annual Review” (February 2006)). Of the total malls space to be
available by 2010, Mumbai, Pune, Delhi and NCR (including Gurgaon, Noida,
Greater Noida, Faridabad and Ghaziabad), Bangalore and Hyderabad will have
a share of 74%. The balance 26% will be made up by cities such as Kolkata,
Chennai, Ahmedabad, Jaipur, Nagpur, Lucknow, Indore, Ludhiana and
Chandigarh.
HOSPITALITY DEVELOPMENT

With the increase of disposable income in the hands of upwardly mobile middle
class Indians, the propensity of spending a larger portion of income on travel
and leisure has been steadily increasing. This factor, coupled with the changing
lifestyle of the urban population and an increase in business travel due to a
growing economy, has created demand for mid-tier as well as top-quality hotels
across this country. In addition, India is also emerging as a major destination
for global tourism which in turn pushing up the demand for hotels and resorts
across India. This increasing demand for hotels and resorts across India offers
yet another opportunity for real estate development. According to HVS
International, the majority of segments in the Indian hotel industry have shown
robust recent growth in room rates as well as occupancy rates (Source: “Indian
Hotel Values – Has the Summit Been Scaled?”(April 2006)). With increased
demand and limited availability of quality accommodation, the average room
rates in metropolitan markets have shown significant growth in 2006 including
36.7% for Hyderabad, 32.5% for Delhi, 30.5% for Jaipur, 24.7% for Mumbai
and 24.0% for Bangalore. Agra, Kolkata, Chennai and Goa experienced a
growth range of between 17.0% and 21.0% in 2006 (Source: “Hotels in India –
Trends and Opportunities” (2006 Edition)). The general increase in both room

15
rates and occupancy rates is expected to contribute significantly to the demand
for new hotel developments.
According to CRIS INFAC, room demand is expected to grow at a CAGR of
10% over the next five years. This is expected to be accompanied by increases
in average room rates of 20% and 10% in fiscal 2007 and 2008, respectively. It
is expected that the growth in occupancy rates will be assisted by factors such
as the 10% CAGR in the number of incoming travellers to India over the next
five years. The following chart shows changes in room demand and availability
as well as occupation rates since fiscal 2000 and projections through to fiscal
2010 (Source: “Hotels Annual Review” (July 2006))

The following chart shows growth in average rate by hotel classification from
fiscal 1996 to fiscal 2006. Across categories, overall average hotel room rates
have increased at compounded growth rate of 5.8% over the past ten year
period driven by the strong growth in room rates in high-end and luxury hotels

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(Source: HVS International “Hotels in India – Trends and Opportunities”
(2006 Edition)).

INTRODUCTION

OVERVIEW

Emaar MGF Land Limited (“Emaar MGF” or the “Company”) is a joint venture
between Emaar Properties PJSC (“Emaar”) of Dubai and MGF Development
Limited (“MGF”) of India. Emaar is one of the world’s leading real estate
companies – having developed approximately 45.0 million square feet of real
estate across residential, commercial and other business segments and with
operations in 16 countries, as of August 31, 2007. MGF has over the last 10
years established itself as one of the key players in retail real estate
development in Northern India. We commenced our operations in India in
February 2005. Our primary business is the development of properties in the
residential, commercial, retail and hospitality sectors. In addition, we have also
identified healthcare, education and infrastructure as business lines for future
growth. Our operations span across various aspects of real estate development,
such as land identification and acquisition, project planning, designing,
marketing and execution. As of August 31, 2007, we have Land Reserves
across India approximating 12,544 acres of which we have development plans
for approximately 11,580 acres expected to provide us with an estimated

17
Developable Area of approximately 559.0 million square feet and an estimated
Saleable Area of approximately 542.0 million square feet. “Saleable Area”
refers to the part of the Developable Area relating to our economic interest in
such
property. “Developable Area” refers to the total area we develop in a property,
and includes carpet area, common area, service and storage area and car
parking. Such area, other than car parking space, is often referred to in India as
“super built-up” area. Our mission as a real estate development company is to
develop and deliver unique integrated lifestyle and work place environments
and planned developments and to be recognised as a responsible corporate
citizen and an employer of choice. In our residential business line, our main
focus is on developing integrated master planned communities in the mid to
luxury segment, wherein we design, build and sell a wide range of properties
including villas, townhouses and apartments of varying sizes. By “integrated
master planned communities”, we mean that developments have one or more
community facilities, including hospitals, schools, retail and commercial
buildings enabling a “live, work and play” theme within the same development.
In our commercial business line, we are focussed on developing, selling and
leasing office and SEZ properties targeted towards a wide range of customers
from individual users and small companies to large corporates in various
sectors including IT and ITES. Our commercial properties shall include both
stand-alone commercial sites and properties forming part of our integrated
master planned communities. In our retail business line, we are developing for
sale or lease shopping centres within our integrated master planned
communities and on a stand-alone basis, large regional destination malls and
luxury retail space at our luxury hotel developments. In our hospitality business

18
line, we are developing hotels at various price points in the luxury, up market,
midmarket and budget segments across India. We intend to enter into
management agreements with well-recognized,
experienced and successful international hospitality companies for the operation
and management of our hotels, on an exclusive geographical basis wherever
possible. We have entered into joint ventures with Accor for the development
and operation of budget hotels and Premier Travel Inn for the development and
operation of midmarket category hotels in India. Both of these joint ventures
are on an exclusive basis (the details of which are set out under “History and
Certain Corporate Matters – Joint Venture and Other Agreements” below). In
addition, we have entered into relationships with Intercontinental Hotels group
companies, Four Seasons Hotels Limited and Marriott Hotels India Private
Limited for the operation and management of some of our other hotel
properties.

Our current projects under development include:

• Mohali Hills (plots), part of a 3,000 acre project of integrated master planned
communities in Mohali near Chandigarh with an estimated Saleable Area of 5.7
million square feet all of which is currently under
development and has been launched for sale. This project is expected to be
completed in the fiscal year 2009-10.
• The Views at Mohali Hills, part of a 3,000 acre project of integrated master
planned communities in Mohali near Chandigarh with an estimated Saleable
Area of 1.9 million square feet all of which is currently under development and
has been launched for sale. This project is expected to be completed in the
fiscal year 2009-10

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• The Villas at Mohali Hills, part of a 3,000 acre project of integrated master
planned communities in Mohali near Chandigarh with an estimated Saleable
Area of 1.2 million square feet all of which is currently under development.
This project is estimated to be completed in the fiscal year 2009-10.
• Boulder Hills (Group Housing Phase I), a 14 acre residential project (part of a
510.4 acre integrated master planned community) in Hyderabad with an
estimated Saleable Area of 1.9 million square feet all of which is currently
under development. This project is expected to be completed in the fiscal year
2009-10.
• Palm Springs, a 16.5 acre high-end residential project in Gurgaon with an
estimated Saleable Area of 0.7 million square feet all of which is currently
under development and has been launched for sale. This project is expected to
be completed in the fiscal year 2009-10.
• The Commonwealth Games Village 2010 residential complex, a 27.7 acre
project in Delhi with an estimated saleable area of 1.8 million square feet, all of
which is currently under development. This project is
expected to be completed in the fiscal year 2009-10
• Chennai Esplanade (Phase I), a 7 acre residential project (part of a 14 acre
project) in North Chennai with an estimated Saleable Area of 0.4 million square
feet all of which is currently under development. This project is expected to be
completed in the fiscal year 2009-10.
• Palm Drive, a 31.6 acre residential development in Gurgaon with an estimated
Saleable Area of 3.3 million square feet, all of which is currently under
development. This project is expected to be completed in the fiscal year 2009-
10.

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• The Central Plaza at Mohali Hills, part of a 3,000 acre development of
integrated master planned communities in Mohali near Chandigarh. This retail
development has an estimated Saleable Area of 0.5 million square feet all of
which is currently under development and has been launched for sale. This
project is expected to be completed in the fiscal year 2009-10.
• “Courtyard by Marriott” in Amritsar, a hotel project of approximately 150
keys. The project is expected to be completed in the fiscal year 2009-10.
• “J.W. Marriott” in Kolkata, a hotel project of approximately 250 keys. The
project is expected to be completed in the fiscal year 2009-10.
• “Holiday Inn” in Kolkata, a hotel project of approximately 250 keys. The
project is expected to be completed in the fiscal year 2009-10.
• “Holiday Inn” in Dehradun, a hotel and convention centre project of
approximately 200 keys. The project is expected to be completed in the fiscal
year 2009-10.
• A luxury hotel in Jasola of approximately 250 keys. The project is expected to
be completed in the fiscal year 2009-10.

Details of our Land Reserves are contained under “—Description of Our

Business — Land Reserves” below.

As of August 31, 2007, most of our Land Reserves are located in or near
prominent cities across India as indicated in the table below:
Location Acreage
North
Chail 18

21
Dehradun 1,129
Delhi 1,313
Ghaziabad 378
Gurgaon 2,808
Jaipur 416
Jalandhar 238
Lucknow 390
Ludhiana 347
Mohali 2,775
South
Chennai 51
Coimbatore 264
Hyderabad 510
Kochi 360
Mangalore 75
Mysore 153

East
Kolkata 6
Shillong 80
West
Alibaugh 25
Goa 483
Indore 205
Pune 520
Total 12,544

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We estimate that our Land Reserves will provide us with a Saleable Area of
approximately 134.9 million square feet of plotted residential development
(including built up villas), 300.0 million square feet of built up residential
properties, 86.6 million square feet of commercial properties, 17.0 million
square feet of retail properties and 5,225 keys in our hospitality properties as of
August 31, 2007.

For the three months ended June 30, 2007 (our first quarter in which revenues
were recognised) our consolidated total income was Rs. 1,931.7 million and our
consolidated net profit (as restated) was Rs. 499.4 million.

For the year ended March 31, 2007, our consolidated total income was Rs.
168.7 million and our consolidated net loss was Rs. 466.0 million.

HISTORY OF THE GROUP

Our Company was incorporated on February 18, 2005 as a joint venture

between Emaar and MGF on an exclusive basis in India. The details of the joint
venture agreement and the exclusivity arrangement are set out under “History
and Certain Corporate Matters – Joint Venture and Other Agreements” below.
We had shareholder funds (i.e., paid up share capital and reserves) of Rs. 47.7
billion as of June 30, 2007. The Company was converted into a public limited
company on August 13, 2007. Emaar, incorporated in 1997, is one of the
world’s leading real estate companies – having developed approximately 45.0
million square feet of real estate across residential, commercial and other
business segments and with operations in 16 countries as of August 31, 2007. It

23
is listed on the Dubai Financial Market and is part of the Dow Jones ‘Arab
Titan’ Index and S&P IFCG Extended Frontier 150 Index. Emaar is also an FT
Global 500 company, a global ranking by Financial Times that provides an
annual snapshot of the world’s largest companies, listed on the basis of market
capitalization. In October 2006, Emaar was awarded ‘Best Developer in the
UAE’ for the second consecutive year and ‘Best Developer in Egypt’ at the
Euromoney Gulf Real Estate Awards. Emaar is developing several real estate
projects including the Burj Dubai Downtown development (a development
which is expected to comprise properties spanning the residential, retail,
commercial and hospitality sectors, including the Burj Dubai – stated to be the
world’s tallest tower, the Dubai Mall – stated to be the world’s largest
entertainment and shopping mall, the Old Town – a low-rise residential
community, Burj Dubai Lake Hotel and Serviced Apartments and the Burj
Dubai Boulevard) and the King Abdullah Economic City in the Kingdom of
Saudi Arabia (a development which is planned to be a mixed use city extending
along a 35 kilometre shoreline and is located near the commercial hub of
Jeddah). In addition to the UAE, India and Saudi Arabia, Emaar has projects in
various countries including Egypt, Turkey, Morocco, Jordan, Pakistan and the
United States of America. Emaar is an ISO 9001:2000 quality certified
company. In addition to geographical expansion, Emaar is also diversifying into
other sectors, including leisure and hospitality, malls, education, healthcare and
finance. In the hospitality and leisure sector, Emaar has entered into an
exclusive agreement with Giorgio Armani S.p.A. to build and manage Armani
hotels and resorts globally. In the education sector Emaar acquired Singapore-
based Raffles Campus Pte Limited, a company involved in providing education
with campuses in Singapore, Indonesia, Hong Kong, China and Vietnam.

24
Emaar also holds equity in Dubai Bank which is focused on retail and
commercial banking; Amlak Finance PJSC, a leading UAE Islamic home
financing company; and Emaar Industries and Investments (Pvt) JSC which has
an investment focus on technology and light manufacturing industries in the
Gulf region. In June 2006, Emaar acquired WL Homes LLC (trading as John
Laing Homes), a large homebuilder in the United States. Emaar further
acquired Hamptons Group Limited, which is a global property sales,
management and development services company.

MGF, incorporated in 1996, is engaged in the field of retail real estate

development in Northern India. It is currently one of the leading shopping mall
developers in Northern India, with approximately 2.0 million square feet of
retail space delivered and approximately 3.0 million square feet of retail space
under development as of June 30, 2007. Some of MGF’s completed projects
include The Metropolitan, The Plaza and Megacity Mall in Gurgaon, the City
Square Mall in West Delhi, MGF Metropolitan Mall in Saket in South Delhi
and MGF Metropolitan Mall in Jaipur. It has been agreed between Emaar and
MGF that in the event that the FDI policy restricts the Company from
developing a retail project in India, MGF shall be authorised to undertake such
project.

STRENGTHS

We believe that the following are our primary competitive strengths:

Strong parentage providing access to international and local capabilities

25
Our parentage of Emaar and MGF provides us with the organisational skills,
experience and the resources required for delivering large scale, quality
projects. Emaar’s brand name, development expertise and
international experience combined with MGF’s local knowledge and
capabilities gives us the ability to identify suitable locations, acquire and
aggregate large parcels of land and design and develop quality residential,
commercial, retail and hospitality properties. We are well-positioned to emulate
international best practices followed by Emaar, such as emphasis on customer
satisfaction, through, for example, offering the customers a choice of
customising the interiors of their homes. We also use Emaar’s experience to
bring an innovative marketing approach to the Indian residential real estate
sector through Emaar’s “Street of Dreams” concept.

High proportion of fully paid for Land Reserves

As of August 31, 2007, over 70% of our Land Reserves are fully paid for, of
which over 397.0 acres are under development. Most of our Land Reserves are
located in or near prominent cities across India such as Delhi, Pune, Hyderabad,
Chennai, Indore and Chandigarh. Details of these locations are contained under
“Overview” above.

Scale of operations
We believe that our market position is enhanced by our strong parentage, Land
Reserves and access to capital.As a result, we are able to:
• negotiate in relation to and purchase large plots of land from multiple sellers
directly, thus enabling us to aggregate land at relatively lower prices.

26
• be a preferred development partner for land owners with large and/or strategic
tracts of land.
• undertake large-scale and complex projects providing us with the opportunity
to capture value from the size and integrated nature of such developments.
• undertake projects in multiple phases providing us with the opportunity to
monitor market acceptance and modify our projects in accordance with
customer needs.
• capitalise on large-scale purchasing opportunities, leading to operational and
cost efficiencies.

Diversified business model

Our real estate business is diversified across geographical locations and
business lines. Our Land Reserves are spread over 22 cities in 16 states in India,
and we have commenced projects in eight cities in seven states in India. These
projects are spread over eight residential properties, including plots, villas,
townhouses and apartments, one retail property and five hospitality properties.
In addition, although we generally sell our residential properties, we intend to
sell or lease commercial and retail properties and intend to hold and, through
third parties, manage and operate hospitality properties.

Execution capability
We employ a robust process involving internal teams and external consultants
when undertaking projects. We believe that this, together with close monitoring
by our management and staff and the experience of our promoters, Emaar and
MGF, enhances our product delivery. For example:

27
• We have strong relationships with a number of real estate brokers that assist
us in identifying and acquiring land in strategic locations.
• We work closely with specialists and consultants including international
architects in designing and planning our projects to ensure quality design and
make them environment friendly.
• We have a joint venture with Leighton International Limited, part of an
Australian based global construction
group, for the construction of our projects in India. We have also signed a term
sheet with Multiplex Limited, part of another Australian based global
construction group, to establish a joint venture to provide
construction services for our projects in India.
• We have a joint venture with Turner Construction International LLC, to
provide construction management services, program management services and
project management services for our projects in India.
Leveraging our strategic relationships
In addition to our strategic relationships with Leighton International Limited,
Multiplex Limited and Turner Construction International LLC, we have
relationships with the following parties which enhances the
marketability of our hospitality, healthcare and infrastructure projects:
• We have entered into joint ventures with Accor for the development and
operation of “Formule 1” budget category hotel and Premium Travel Inn for the
development and operation of “Premier Travel Inn” midmarket category hotels.
We have also entered into a management agreement with SC Hotels & Resorts
(India) Private Limited, part of the Intercontinental Hotels Group, pursuant to
which we have agreed to build and fit out a “Holiday Inn” branded hotel in
Kolkata to be managed and operated by SC Hotels & Resorts (India) Private

28
Limited. We have also entered into a management agreement with
Intercontinental Hotels Group (India) Pvt. Ltd. Pursuant to which we have
agreed to build and fit out a “Holiday Inn” branded hotel
and convention centre in Dehradun to be managed and operated by
Intercontinental Hotels Group (India) Pvt. Ltd. We have entered into an
operating agreement and a memorandum of understanding with Marriott
Hotels India Private Limited (with respect to the development, operation and
management of a hotel under the “Courtyard by Marriott” brand in Amritsar
and a hotel under the “JW Marriott” brand in Kolkata) and a
letter of intent with Four Seasons Hotels Limited (with respect to the
development, operation and management of a hotel under the “Four Seasons”
brand in Hyderabad). Further details of these relationships
are set out under “Our business lines – Our hospitality business” below.
• We have entered into a memorandum of understanding with Fortis Healthcare
Limited pursuant to which we have agreed to form a joint venture company to
undertake the development of hospitals across India
• We have a memorandum of understanding with Dubai Aerospace Enterprise
(DAE) Limited (“DAE”) to work together with DAE to explore potential areas
of co-operation and to identify and evaluate the design, construction, expansion,
renovation, modernisation, commissioning, maintenance, operation,
management and development of existing and new airports in India with a view
to further our respective strategic objectives in India. Further details of this
relationship are set out under “Our other initiatives – Infrastructure
projects” below.
Strong financial position

29
We have shareholder funds (i.e., paid up share capital and reserves) of Rs. 47.7
billion as of June 30, 2007. As of June 30, 2007, we had approximately Rs. 31.5
billion of total principal amount of outstanding indebtedness including secured
redeemable non-convertible debentures issued to Prudential ICICI Trust
Limited A/c Liquid Plan for an aggregate consideration of Rs. 2.5 billion
having a credit rating of A1+ (SO) by ICRA Limited. The Company has also
received an A+ rating from CARE for long term debt programmes and a PR1+
rating from
CARE for short term debt programmes. We have a debt to equity ratio of 0.66
as of June 30, 2007. As a result, we believe we have the ability to incur
additional indebtedness at competitive rates and terms.
Experienced management
We have a professional, experienced and dedicated management team drawn
across the real estate and various other industries. Because of the established
brand names and reputation of Emaar and MGF in real estate
development, we have been able to recruit high calibre management executives
from diverse backgrounds.

STRATEGY
The key elements of our business strategy are as follows:
Create value through integrated master planned communities
We believe that the large size of our Land Reserves enables us to develop
integrated master planned communities, which provide residential and other
offerings across various price points thus optimising the potential and use of our
Land Reserves. We intend to focus on developing integrated master planned
communities in the mid to luxury segment, with a mix of residential offerings

30
and one or more community facilities, including hospitals, schools, retail,
commercial and recreation enabling a “live, work and play” theme within the
same project. We intend to ensure that our integrated master planned
communities meet high quality standards in order to enhance the premium we
may charge and/or demand for our core business offerings within such
communities. Further, we are able to create value by developing and offering
parts of our projects in a staggered or phased manner, thereby potentially
extracting greater value from successive phases as the project reaches
completion and greater facilities are made available. Undertaking projects in
multiple phases also provides us with the opportunity to monitor market
acceptance and modify our projects in accordance with customer needs.
Adopt international benchmarking and follow best practices in
development and customer service
We believe that consumer aspirations are rising along with demand for high
quality developments across our business lines. In order to set new benchmarks
for quality to meet these new aspirations, we are using
international designs used by Emaar as models for our Indian product offerings.
We intend to continue to employ a robust process involving internal teams and
external consultants in order to deliver projects that can be benchmarked on an
international basis. We believe we have a differentiated marketing model. We
intend to market residential property in India based on the “Street of Dreams”
concept used by Emaar in Dubai. A Street of Dreams is to be located in a
residential project and consists of a number of distinct model homes displaying
a variety of villas, townhouses and apartments from such residential project.
Each model home has a different design theme, ranging from modern to

31
classical. Being fully furnished and equipped, such models are intended to give
prospective buyers an impression of living within one of our community homes.
We plan to have a Street of Dreams in most of our large residential
developments. One Street of Dreams has been constructed in our Boulder Hills
project in Hyderabad and two others are under construction in our Mohali Hills
project in Mohali and our Palm Springs project in Gurgaon.

In addition, we train our marketing and sales teams in our customer relationship
management (“CRM”) and customer lifecycle management systems and
processes, which we adopt from best practices of Emaar and John Laing
Homes. In our residential business, our CRM systems and processes are
expected to provide us an insight into trends in customer requirements, in terms
of type, location and price of the product offerings, and guide us in planning our
development and promotional activities. As an extension of our marketing and
sales team, we have a customer care cell with the primary responsibility of
recording any complaints or feedback from clients, to ensure consistency and
continuity of our client interface. In addition, given our relationship with
Emaar, we have been using and intend to continue to use Hamptons Group
Limited to sell and market our properties overseas.
Increase our Land Reserves in strategic locations
Continuing to build our Land Reserves is critical to our growth strategy. We
seek to acquire parcels of land and development rights over parcels of land in
various locations, over a period of time, for future development. In some cases,
these parcels of land may be consolidated to form a contiguous landmass, upon
which we can undertake development. We intend to continue acquiring land
across India for our projects in order to replenish and augment our Land

32
Reserves. We have identified and acquired land in and around 22 cities which
we believe are suitable for our projects and are in the process of acquiring
further land in existing and new cities to achieve a presence in India’s 40 largest
cities by population over the next five years.
Capitalise on strategic alliances with domain leaders
To ensure excellence in our processes and product delivery, enhance the
premium we may charge and/or demand for our product offerings and enable
our management to focus our core business of real estate development, we have
entered into and will continue to enter into strategic relationships. We have
entered into relationships with
Leighton International Limited and Multiplex Limited (for construction),
Turner Construction International LLC (for project management), Accor,
Premier Travel Inn, InterContinental Hotels group companies, Four Seasons
Hotels Limited, Marriott Hotels India Private Limited (in relation to our
hospitality business) and Fortis Healthcare Limited (in relation to our healthcare
business).
Invest in human capital and recognition as an employer of choice
Investment in human capital is a key part of our business strategy and is derived
from our mission to be recognised as a responsible corporate citizen and
employer of choice. We focus on various areas which we
believe will enable us to retain and attract experienced and qualified human
capital by (i) aligning the interests of our employees with ours, (ii) spreading
responsibility for achieving our business objectives throughout our
organisation, (iii) extending best practices amongst our employees and (iv)
providing our employees with access to the international skills, experience and
resources of Emaar.

33
ORGANISATIONAL STRUCTURE

34
 Board of Directors

H. E. Mohamed Ali Rashed Alabbar- Chairman

Mr. Shravan Gupta- Executive Vice Chairman & Managing Director

Mr. Siddharth Sareen- Executive Director

Mr. Siddharth Gupta- Executive Director

Mr. Ahmed Jamal Jawa- Director

Mr. Pradip Kumar Khaitan- Director

Mr. Ram Charan- Director

Mr. Om Prakash Vaish- Director

Mr. Ghyanendra Nath Bajpai- Director

Mr. Kiran Sharadchandra Karnik- Director

Mr. Aman Mehta- Director

35
36
Below is a flow chart illustrating our land identification and acquisition process.

37
Project planning and execution
The project planning and execution process commences with the obtaining of
requisite regulatory approvals, including environmental approvals and the
development of a project concept based on the area’s marketability, target
customers, potential return and legal status. After a detailed review of the site
parameters, we formalize an architectural brief based on the project concept
which is subsequently finalized with selected architects and other external
consultants. We closely monitor the development process, construction quality,
actual and estimated project costs and construction schedules. We endeavour to
maintain high health and safety standards on our construction sites. In order to
ensure the high quality of our projects, we have entered into a series of
memoranda of understanding and agreements with leading construction and
project management companies. Our design and engineering is carried out by a
team of our appropriately qualified employees and external specialists such as
architects and consultants. We believe these elements of our project execution
methodology are essential for developing products which appeal to consumers
at the higher end of the markets. Our memoranda of understanding and
agreements include:
• Construction – We have formed a joint venture with Leighton International
Limited part of an Australian
based global construction group, to carry out construction of our projects in
India. The parties have agreed
that the joint venture company is to provide construction services to us as its
preferred customer and we are
to treat it as our preferred contractor. The parties have agreed that each of the
Company and Leighton

38
International Limited (or their respective affiliates) shall own 50% of the issued
share capital of the joint venture company and are not permitted to transfer their
shares directly or indirectly to a third party (except their respective affiliates)
for a period of three years. The joint venture is intended to implement global
best practices in technology and design for construction of our projects. Subject
to some limited exceptions, Leighton has agreed to work on real estate projects
in India exclusively through the joint venture company and to provide the joint
venture company with all necessary support, assistance and resources to ensure
that after a five year period the company is a self sustaining construction
company. A similar undertaking has been given by the Company. Leighton
Holdings Limited is the parent company of Australia’s largest project
development and contracting group. The details of the joint venture agreement
are set out under “History and Certain Corporate Matters – Joint Venture and
Other Agreements” below. With over 25,000 employees, the Leighton group’s
operations are spread around the Asia-Pacific region with projects in countries
such as Australia, Indonesia, Malaysia, Singapore, China and India and in the
Arabian Gulf. Leighton Holdings Limited is listed on the Australian Stock
Exchange. Through the joint venture company, we intend to benefit from
Leighton’s construction expertise and experience, which enables our
management to focus on the development rather than the construction of
projects. We believe the joint venture company will improve the quality of
construction in our developments and also allow us to embark on more complex
and ambitious projects. The first few projects that the joint venture company is
constructing are Mohali Hills, The Views and The Central Plaza in Mohali and
The Palm Springs in Gurgaon.

39
We have also signed a term sheet with Multiplex Limited, part of another global
construction group, to establish a joint venture company to provide construction
services to us as its preferred customer in India on an exclusive basis. The
parties have agreed that each of the Company and Multiplex Limited shall own
50% of the issued share capital of the joint venture company. The term sheet
provides that Multiplex Limited shall not undertake construction activities
similar to those contemplated by the term sheet in India other than
through the joint venture company.
• Project Management – We have an agreement with Turner Construction
International LLC (“Turner”) to establish a joint venture company to provide
construction management services, program management services and project
management services for our projects in India. We intend to benefit from
Turner’s experience by strengthening our planning and execution capabilities.
Turner has agreed not to directly or indirectly engage or involve itself in
providing construction management services, program management services
and project management services in India other than through the joint venture
company during the term of the agreement – initially a period of five years
which is renewable. Each of the Company and Turner currently own 50% of the
issued share capital of the joint venture company and are not permitted to
transfer their shares directly or indirectly to a third party (except for their
respective affiliates) for a period of five years. The details of the joint venture
agreement are set out under “History and Certain Corporate Matters –
Joint Venture and Other Agreements” below.

40
Sales and marketing

We have a panel of over 150 brokers, who market our residential, commercial
and retail projects. We offer continuous training and support to the brokers (for
example, attending road shows and presentations to potential customers)
intended to help achieve higher sales against quarterly targets. We also have a
strong relationship with various housing finance companies to ensure that the
customers are given access to the various financing schemes relating to our
residential projects. We focus on jointly developing and marketing co-branded
financing schemes for the convenience of our residential customers. A number
of housing finance companies with whom we have relationships share their
customer databases and premises across India to market these schemes on
exclusive basis. We offer two types of payment plans to our residential
customers. The first is the upfront payment of 100% of the purchase price
within 45 days of booking the property and the second is a phased payment plan
which requires the customer to pay the purchase price in instalments until the
property is completed. We have a preference for collecting 100% of the
purchase price upfront to insulate against the risk of default of payment by
a customer. In order to encourage this, we offer to the customer by way of an
incentive, an average discount of approximately 10% to the purchase price.
As a part of the sales department, there is a dedicated customer service team
comprising over 50 employees responsible for servicing our customers through
the entire sales process, from the booking process through to the transfer of
property to the new owner. The sales take place through our corporate office,
branches and sales centres. We intend to market residential property in India
based on the “Street of Dreams” concept used by Emaar in Dubai. A Street of

41
Dreams is to be located in a residential project and consists of a number of
distinct model homes displaying a variety of villas, townhouses and apartments
from such residential project. Each model home has a different design theme,
ranging from modern to classical. Being fully furnished and equipped, such
models are intended to give prospective buyers an impression of living within
one of our community homes. We plan to have a Street of Dreams in most of
our large residential developments. One Street of Dreams has been constructed
in Hyderabad and two others are under construction in our developments in
Mohali and Gurgaon.

The flow diagram below illustrates our sales process:

42
RESIDENTIAL PROJECTS

43
A prime location, just minutes away from the central
business district, the Commonwealth Games Village
is Delhi’s only purpose-built, self-contained premium
residential community.

Comprise of independent low-rise luxury homes,

featuring the highest design standards and premium
amenities at attractive price points. Each family can
occupy one entire floor of The Terraces with
independent access and enjoy unhindered privacy of
these true value homes.

Surrender completely to natural beauty. Surround

yourself with acres of refreshing greens. Experience
what clean, healthy living should be. Welcome to
Garden Terraces, low rise luxury residences at The
Palm Drive. Walk into your home and experience a
great sense of space. Enjoy the feeling of luxury,
quality and workmanship. And prepare to be
welcomed by greens as you step out.

A world-class leisure and residential community

spread out over approximately 531 sprawling acres,
BHGCC has been envisioned as a complete, self-
44
Mohali Hills

Mohali Hills is a 3000 acre township offering luxury villas, apartments,

terraced apartments, styled on Spanish architectural lines, shopping complexes,
schools and offices.

Within the Mohali Hills Township are a cluster of premium 2, 3 and 4 BHK
apartments and penthouses,'The Views' on 25.8 acres. Apart from the
immaculate construction of the apartments, the condominium offers a health
club, swimming pool, jacuzzi, tennis courts and a mini Cineplex.

The Villas

The Villas at Mohali Hills are not just a perfect blend of style
and form but also promise to be the epitome of fine living by
offering the best from Andalusian, Mediterranean and
Spanish architecture. It is a once in a lifetime opportunity to
experience a signature lifestyle.

Spanish
Villas
The Spanish style is a reflection of the homes
found in the Iberian Peninsula as a response to
its particular climate and availability of
materials. Simplicity characterises this style, yet
handcrafted Mexican decorative tiles highlight
the arched entryways and gables. Balconies and
windows are enhanced with decorative wrought
iron railings. This style witnessed a renaissance
in early 20th century California, where the
climate mimics that of Spain.

45
Mediterranean Villas
The Mediterranean style echoes the
architecture of its cousin, the Emirates Hills.
A simplified version, the Mediterranean
style reflects the rectilinear forms of the
many vernacular white-washed hillside
towns that dot the Mediterranean Coast.
From this simplicity, the refinement in solid
details presents a style that echoes the past
but forges into the modern era.

Andalusian Villas
The Andalusian style originated in the Iberian
Peninsula when the Moors integrated their
culture and architecture with the panish.
Characterized by the blending of the simple
forms found in simple Spanish vernacular and
in Moorish traditions of highly ornamental
fenestration and facades, it utilizes courtyards
and verandahs to maximise thermal delight.
Andalusian Revival homes can be found.

The View at Mohali Hills

46
The Commonwealth Games Village 2010.

A new landmark in the heart of Delhi from Emaar MGF.

Prime location just minutes away from the central business district - Connaught
Place, the Commonwealth Games Village is Delhi’s only purpose-built, self-
contained premium residential community.

Wherever you need to travel, for business or pleasure, the Commonwealth

Games Village 2010 is the perfect starting point.

The Commonwealth Games Village: global living inspired by an international

event, developed by Emaar MGF* - India’s premier real estate and
infrastructure development company.

Committed to creating a new India.

47
 Commercial, IT Parks & SEZs

The Palm Square is strategically located as a

gateway to The Palm Drive, Gurgaon most
desirable residential address being developed by
Emaar MGF. Spread across on 3.5 acres of land,
The Palm Square will offer a world-class office
environment. With large floor plates, open span
design and central corridor, every square foot of
space at The Palm Square seems bigger. The entire
complex will boast of the highest quality
specifications and craftsmanship, measuring up to
the highest international standards.

48
The Palm Springs Plaza is strategically located on
the Golf Course Road, Gurgaon's most desirable
address. It stands sentinel to The Palm Springs,
Emaar MGF's master-planned, integrated
community. Setting new benchmarks for
excellence in design, quality, facilities and
operational management, The Palm Springs Plaza
is designed to meet the most stringent demands of
today’s business in a globalised world by providing
an environment built to nurture excellence and
productivity.

Hyderabad International Convention Centre

(HICC) is India’s largest and most technologically
advanced convention centre. It has been developed
by the Cyberabad Convention Centre Private
Limited, a joint venture between Emaar Properties
(PJSC) of Dubai and Andhra Pradesh Investment
Infrastructure Corporation (APIIC). The
convention centre is an integrated 2,91,000 sq. ft.
facility having seating capacity of about 6,500 and
is also equipped with several automated features to
facilitate diverse utilization.

The Palm Springs Plaza

A state-of-the-art commercial complex, The Palm Springs Plaza is

49
 strategically located on the Golf Course Road, Gurgaon's most desirable
address. It stands sentinel to The Palm Springs, Emaar- MGF's master-
planned, integrated community comprising low-rise luxury villas and
spacious apartment towers, surrounded by acres of elegantly landscaped
gardens. Setting new benchmarks for excellence in design, quality, facilities
and operational management.

The Palm Springs Plaza will be home to some of the finest corporate offices
and most sought after retail brands.

Some of the location plans:

THE PALM SQUARE

50
COMMONWEALTH GAMES VILLAGE

51
New Developments

1) Emaar-MGF acquire Majority Stake in Singapore Company

52
A deal valued at Rs. 630 crore was signed by Emaar-MGF on 18th April, 2007
to acquire a majority stake in Singapore based RSH Ltd, taking its share to
87.3%. This marks the company’s entry into the fashion and lifestyle market.

2) Emaar-MGF to Raise Capital

Emaar-MGF proposes to raise $2.9 billion in an IPO to fund its pan-India

projects in the second half of 2007. Of the $ 4 billion pledged for India, $1
billion was brought in as one of the largest FDI investments in real estate till
date.

3) Emaar-MGF-Accor Tie-up for Budget Hotels

Accor, the French hospitality giant tied up with Emaar-MGF in November 2006
for a joint venture to set up 100 of the Formula 1 brand of budget hotels in
India. The joint partnership would set up 50 hotels in the 1st 5 years in the top 7
metros at a cost of $300 million.

The locations for the 100 hotels have already been identified, adding 10,000
hotel rooms across the country for budget travellers, in the range of Rs. 1,000 to
Rs.1, 500.

The company has plans to build 10 luxury hotels as well, for which land has
already been purchased. Two plots worth almost Rs. 400 crore have been
acquired in Jasola, Delhi to start the luxury hotel chain. The Delhi and Mumbai
hotels would be in the 7 star category.

The total investment on the hotel segment would be to the tune of Rs. 13,000
crore in the first 5 years. While Emaar-MGF would construct the hotels, a
specialty partner would manage them.
53
4-star business hotels would be set up in the state capitals and other major
cities, including Ahmedabad, Indore, Lucknow, Kochi, Goa, Jaipur and
Amritsar.

The Group is considering investment in the serviced apartment category as

well, and so far 8 cities have been identified. These apartments could be part of
a hotel project or independent structures.

4) Emaar-MGF's Foray into Education

The social responsiveness and timing of Emaar-MGF is truly admirable. In

April 2007, it announced its plans of setting up 100 schools and a few institutes
of higher learning. The latter would offer general as well as specialized courses
in business administration, retail management, arts, hospitality, tourism and
nursing.

Emaar-MGF Education would set up these schools within the integrated

townships it is developing across the country, following the CBSE, ICSE and
International Baccalaulreate courses.

The first of these schools will come up in Neemrana, Rajasthan, at a cost of

Rs.100 crore. While Emaar-MGF would own and finance the schools, the
administration would be handled by an independent charitable trust. The
Neemrana School will involve an investment of Rs.100 crore, and will
accommodate 1,800 students.

54
Why Emaar MGF is a big bet for investors?
55
The recent meltdown and the following volatility in the broader markets has left
two sets of believers on the streets: one set believes in bubbles, and expects
them to burst at periodic intervals, while the other believes there is a
fundamental reason innate to these so-called bubbles, which is the strong
undercurrent of robust domestic macroeconomic growth.

For the latter set of believers, it is just a matter of conviction in the Indian
growth story, while for the former worries about a correction and the bursting
of such bubbles.

For some sectors of the economy, however, these divergent sets of investors
align together. With a little bit of apprehension about a correction in prices in
some pockets, we would like to include the Indian real estate too, in this league.

Here's why: the perennial demand-supply mismatch is likely to continue in the

near future.

Though real estate buyers, and more so, investors may delay their buying
decision, there is middle class demand, which has taken wings due to the rise of
sectors like information technology (IT), IT-enabled services and financial
services.

More recently, creation of manufacturing hubs in places such as Sriperumbudur

in Tamil Nadu, Manesar in Haryana and Ludhiana in Punjab make one approve
of this trend.

With the rate cuts announced by the US Federal Reserve, domestic rates too are
expected to soften. An interest rate cut would mean cheaper home loans and
thus higher demand for real estate.

Most real estate developers are gearing up for this upsurge in demand by laying
out plans to construct millions of square feet (sq ft) in various sizes and shapes,
across the country. But, there are a handful of developers in India, who have the
scale and pace to set up shop in every nook and corner of the vast geography.

The markets have witnessed a rally in realty stocks in both directions last year,
as well as the listings of a number of players including the largest of all -- DLF.
Now, Emaar MGF Land is set to join this league, with its plans to raise around
Rs 6,000 crore via an IPO.
56
Two, tango

Emaar MGF Land is a joint venture (JV) between Dubai-based Emaar

Properties PJSC and Delhi-based MGF Development, incorporated in 2005.
Emaar better known as the company which built the Burj Dubai, the world's
tallest tower, has a global presence with operations in 16 countries, while MGF
is a 10-year old real estate developer from North India with developments like
City Square Mall, MGF Metropolitan in Delhi, The Plaza and Megacity in
Gurgaon to its credit.

Now, the Emaar MGF JV has acquired over 13,000 acres all over the country
and plans to develop it into integrated townships, residential apartments,
commercial retail and office spaces, hotels and hospitals.

HOTEL PROJECTS
Number Estimated
Project Location
of keys completion
Courtyard FY09-
Amritsar 135
by Marriott FY10
JW FY09-
Kolkata 300
Marriott FY10
Holiday FY10-
Kolkata 250
Inn FY11
Holiday FY09-
Dehradun 200
Inn FY10
Jasola,
A luxury FY10-
New 250
hotel FY11
Delhi

Besides the parentage, the joint venture has also brought in the largest foreign
direct investment (FDI) in real estate from institutions like Citigroup, JP
Morgan and New York Life. As on September 2007, the company's paid-up
capital of Rs 4,840 crore (Rs 48.40 billion) consisted of a 42 per cent share of
Emaar, a 53.3 per cent from MGF and the rest from global financial institutions.

All the jazz

57
After achieving a breakeven in 27 months of inception, the joint venture is
proposing to aggregate between Rs 5,540-Rs 6,464 crore (Rs 55.40-64.64
billion) through an IPO, which would amount to a post-issue stake of 10.2 per
cent in the company. The price band for the issue is fixed at Rs 540-630 a share.
At the upper end of the price band, the market capitalisation would thus work
out to Rs 62,152 crore (Rs 621.52 billion).

EMAAR MGF'S ONGOING

DEVELOPMENTS
Saleable
area
Estimated
Project Nature (in
completion
million
sq ft)
Mohali Hills FY09-
5.7
Plots FY10
Mohali, The Views
Chandigarh 1.9
(apartments)
Mohali Hills
(Mega The Villas 1.2
township) Central
Plaza (retail 0.5
space)
Hyderabad
Group FY09-
Boulder Hills 1.9
housing FY10
(Phase I)
Gurgaon High-end
FY09-
Palm Springs, residential 0.7
FY10
Gurgaon project
FY10-
Palm Drive Residential 3.3
FY11
Commercial FY10-
Palm Square 0.3
and retail FY11
New Delhi
The
FY09-
Commonwealth Residential 1.8
FY10
Games
Village 2010

58
Chennai
Chennai FY09-
Residential 0.4
Esplanade FY10
(Phase I)

Earlier, the issue price was fixed at Rs 610-690 a share amounting to a market
cap of Rs 69,382 crore (Rs 693.82 billion). Owing to volatility in the markets
the issue price has been revised downwards. Even then, this will make Emaar
MGF the second largest real estate developer by market capitalisation after
DLF, which has a market capitalisation of about Rs 1,39,000 crore (Rs 1390
billion).

"The increase in Emaar MGF's equity base will help it leverage better, since
even now, the debt-equity ratio is as low as 0.86," claims Shravan Gupta,
executive vice chairman and managing director, Emaar MGF Land.

PROFITABLE ESTATE
6M
Rs crore FY08E FY09E FY10E
FY07
Revenues 501.7 1020 2200 3000
Operating
201.4 408 836 1140
profit
OPM (%) 40.1 40 38 38
Net profit 130 270 572 765
NPM (%) 26 26.5 26 25.5

Emaar MGF plans to utilise Rs 2,560.50 crore (Rs 25.60 billion) from the issue
to make part payment for its land, Rs 775.50 crore (Rs 7.75 billion) toward
development and construction costs of its Palm Drive project in Gurgaon, and
the rest for repayment of loans.

Besides, the company has projects under development, including the 2,700
acre-plus integrated township in Mohali, a residential township in Hyderabad,
Delhi, Chennai and high-end residential and commercial developments in
Gurgaon.

"Out of the proposed reserves, Emaar MGF has already paid up for almost 90
per cent of the land," mentions Gupta, hinting at the robustness of the
developer.

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Courting grandeur

Emaar MGF has mega plans for using its over 13,000 acre (about 566 million
sq ft of saleable area) land reserves. The company has ongoing projects on
around 18 million sq ft at present and aims to develop about the same area over
the coming year.

"Going forward, we aim to expand our execution ability from 18 million sq ft a

year to nearly 30 million sq ft over the coming five years," says Sanjay Baweja,
chief financial officer, Emaar MGF. For this, the company has tied up with
international construction majors like Australia's largest contractor, Leighton,
and other players like Multiplex and Turner Construction International.

Such contractors bring along global best practices in construction, project

management skills and world class equipment to the table. This ensures timely
and high quality execution of Emaar MGF's projects which range from
anywhere over 100 acre to 3,000 acre. For smaller projects however, the
company has tied up with domestic construction majors like L&T, Ahluwalia
Contracts, and the like.

The company has also forayed into the airport, hospitality, healthcare and
education sectors with marquee names as its associates. It plans to set up a
speciality hospital and an international school in each of its integrated township,
in association with Fortis Healthcare [Get Quote] and Singapore-based Raffles
Campus, respectively.

Raffles Campus is a subsidiary of Emaar Properties, after the latter acquired the
former. Dubai Aerospace Enterprise is its partner for development of airport
infrastructure in India. For its hospitality venture, Emaar MGF has chalked out
about 4 million sq ft properties across various cities and tied up with global
hospitality brands like Accor, Premier Travel Inn, Marriott, Intercontinental,
Four Seasons and Hyatt.

Strength in strategy

The business model of Emaar MGF Land is an attempt to bring about the robust
international practices from Emaar as well as its partner contractors, creating a
stable revenue model for what is today just a two-year old startup. "We are
looking to build properties, which could be converted into real estate
investment trusts (REITs) going forward, as soon as the market opens up for
REITs," says Gupta.
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To achieve this, the company has adopted a multi-pronged strategy. Although
for residential properties it will go by the build-and-sell route, its commercial
properties will be leased out for long periods. It plans to manage integrated
townships and commercial properties by floating a facilities management
subsidiary going forward. Besides, it will own the real estate in the healthcare
venture with Fortis, which will set up hospitals in Emaar MGF townships. A
similar strategy is followed for schools to be set up in tandem with Raffles.

For hotels, the strategy may differ depending on its partner, as some partners
like Accor and Premier Travel Inn have entered into a JV with the company for
a chain of hotels, while others have ventured in for select properties. For
instance, Accor will set up and manage 40 hotels with an average of 80-100
rooms under its new global brand Formule 1 with Emaar MGF in a 50:50 JV.
With Premier Travel Inn too, the company will set up 50 three-star hotels with
over 5,000 rooms over the next seven years.

On the other hand, Marriott, Intercontinental, Four Seasons and Hyatt are going
to manage some of Emaar MGF's properties in Kolkata, Hyderabad, Gurgaon
and Goa. However, since the company has been in operations for just about two
years, investors may have to wait and watch for its operations to yield high cash
flows.

Though the company has paid up for almost 90 per cent of its land reserves, it
may have to hold on to its land for longer periods, thus delaying its planned
projects, if property prices correct or remain low for a prolonged period.
Comfort can be derived from the fact that a large part of its Gurgaon and
Mohali projects which were launched recently have been pre-sold, and are
expected to be completed by FY10.

Valuations

Emaar MGF Land has not published the valuation of its land reserve. However,
based on details about payment to be made for a part of its land reserves,
around 5,300 acre of its land could be attributed a value of Rs 28,750 crore (Rs
287.50 billion) � close to Rs 5.4 crore (Rs 54 million) an acre, or Rs 292 a
share. If one values the remaining 7,900 acre of land reserves, which consist of
contiguous land parcels in cities like Pune, Kolkata, Indore, Coimbatore, Kochi,
Ludhiana, Jalandhar, Ghaziabad and a few others at a lower average valuation
of Rs 4.5 crore (Rs 45 million) per acre, one arrives at a value of Rs 360 a
share.

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This value includes the townships, residential and commercial projects already
launched in New Delhi, Mohali, Gurgaon, Hyderabad and Chennai as well as
the five hotel projects. Besides, the company has deals inked for setting up
hotels amounting to a capacity of close to 5,000 keys and also hospitals and
schools in its townships.

To sum up, this rough estimate leads us to conclude that the issue appears fairly
priced. Since almost 90 per cent of the land reserves are owned and the fact that
it has a room for further leverage makes the company attractive. Add to this, the
set of investors in the company and the tie-ups it has entered to ensure timely
execution of its projects aids in shrugging off execution risks.

Although not an exception for real estate developers, Emaar MGF, too, has a
large part of its land reserves still defined as agricultural land. Hence, any
change in legislation regarding use of agriculture land or any delays in
conversion of use to non-agriculture, can impact its plans.

The only risk besides that could arise from a slowdown in demand leading to
correction in real estate prices. Given the fair pricing, there appears to be little
upside in the near term considering the uncertainty over real estate prices.

However, in the long run, one could expect Emaar MGF to do an encore of
DLF. Long term investors who buy into the great Indian growth story will reap
handsome rewards from this issue.

CONCLUSION

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Emaar-MGF is focused on developing new-age integrated townships that would
change the way people live in India. These townships would include a choice of
homes for buyers, from apartments to villas, row houses and vacant plots for
customized construction. Shopping complexes and landscaped gardens would
be integrated with world-class medical care, schooling and recreational
facilities. Adding vibrancy to the township would be Strip Malls offering a
variety of entertainment and branded products, ultimately redefining suburban
living.

Besides real estate, it has also been forayed to hospitality, retail and in
infrastructure. So, definitely it would be the largest player in the infrastructure
industry soon.

REFERENCES

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• Reality Plus magazine

• EMAAR-MGF Website

• Various search engines

• Red Herring Prospectus

• Stock Market Report

• Company Brochure

• Newspaper

• Magic Bricks Real Estate Research articles

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