Business Today

A hill station for work and play

Lavasa Corporation has ambitious plans of creating a resort that can also be home to busy executives seeking a work-life balance.

Virendra Verma | Print Edition: November 16, 2008

Year: Mid-2012
Location: 65 km from Pune in western hills

Wake up at 6 a.m., watch the sunrise over Warasgaon Lake, go for a walk in a hill forest trail, come back home to read the newspapers, breakfast, and get ready for office. Leave at 8.50 a.m., reach office in 10 minutes. Go home for lunch at 1.30 p.m. Leave office at 5.30 p.m. Play lawn tennis with your son or daughter in the evening.

What sounds like a dream for today’s commute-weary Mumbaities could be a reality by 2012. Lavasa Corporation, a subsidiary of Hindustan Construction Company (HCC), is developing a township at an investment of Rs 40,000 crore in four phases. The first of its kind in India, the project, 200 km from Mumbai and 65 km from Pune, will come up over half the 25,000 acres earmarked as a hill station that is roughly one-fourth the area of Mumbai city.

“We are planning Lavasa on the model of Boston city,” says Rajgopal Nogja, President, Lavasa Corporation. It will have its own city management services, including local transportation. While HCC has built the link road up to the Mumbai-Pune Expressway, the nearest airport is Pune.

The potential can be seen from Axis Bank’s decision in June to pick up a 2.5 per cent stake in Lavasa Corporation for Rs 250 crore, valuing the company at Rs 10,000 crore. By comparison, the market cap of Lavasa’s parent HCC, which holds 65 per cent, is around Rs 865 crore. Other promoters are Gautam Thapar’s Avantha Group, Venkateshwara Hatcheries and Vithal Maniar, who is into manufacturing and trading of steel alloys.

The company calls it a hill station (altitude: 2,000-3,000 ft), but is trying to create a business opportunity by attracting non-polluting activities like education, R&D, film studios and travel & tourism. So, Lavasa will have flats, villas, offices, hotels, hospitals, schools and the best of leisure and sport activities.

“We don’t see Lavasa as a weekend place, but as a full-week place and want to attract eco-friendly industries,” says Nogja. According to the master plan, the company plans to have a maximum resident population of 150,000 and 2 million tourists a year. It has secured all the environment and forest clearances.

The first residents and tourists, expected in the last quarter of 2009, will have the basics—a hotel, convention centre, some educational institutes and water sport activities. Lavasa is already running a 20-room resort and has tied up with the University of Oxford, Girl’s Day School Trust of UK and Symbiosis to set up campuses there.

Hill station, work station
These institutions will be present in Lavasa.

• University of Oxford
• Girl’s Days School Trust, UK
• Apollo Hospital
• Symbiosis
• Accor
Institutions and companies that have tied up to be in Lavasa. Lavasa Corp. will have stake in all

Lavasa is relying on three revenue streams—pre-sale of real estate, a special purpose vehicle for hotels and healthcare, and city management. When it opened the first bookings last year, all the flats and villa then on offer were sold out. Lavasa will have cash flows of Rs 800 crore from pre-sales and Rs 2,000 crore from investment. The promoters’ equity is Rs 500 crore while debt will fetch Rs 700 crore. The company has already acquired 95 per cent of the 12,500 acres earmarked for the project.

The big question: Will Lavasa get the high-paying jobs and the physical connectivity to the real world of dealmakers and harried executives—the very people who need a work-life balance in an idyllic setting? Or will it become another crowded tourist spot?

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