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West Pioneer Props (WPR)

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Monday 02 February, 2009

West Pioneer Props

Trading Statement

RNS Number : 6388M
West Pioneer Properties Limited
02 February 2009
 



Press Release  

 2 February 2009



West Pioneer Properties Limited


('West Pioneer' or 'the Company')


Trading Statement 


West Pioneer (AIM:WPR), a leading developer and operator of shopping malls in west and southern Indiaannounces the following trading update to the market.


Like other countries around the world, India has been affected by global economic conditions In particular, confidence within the retail industry is currently low, with investment decisions and new store openings being put on hold.  However, the fundamentals of the Indian economy remain  robust and the company is confident that it has the right strategy and team in place to meet its long term objective of having 4 million square feet of gross leasable area within the next 3-5 years. 

 

 Kalyan 

West Pioneer is pleased to announce footfalls remain strong at the Company's Metro Junction Mall in Kalyan, in spite of the global economic downturn and the recent Mumbai terrorist attacks.  More than 300,000 people visited the mall in December 2008. Importantly, retailers remain satisfied with sale conversion rates within their particular stores.  The company has been working hard to develop the mall into a destination centre and has positioned itself to become a hub of activity within the community


However, the Company announces that leasing at its mall has fallen from 70% to 54%.  This is due to some retailers suspending all new store openings nationwide and therefore deciding not to take up occupation at the Company's Metro Junction Mall.  Since the mall is not yet fully occupied, average rentals are currently below management expectations. 


The directors are currently in negotiations with potential new tenants and expect to be able to update the market shortly. 



Nashik & Aurangabad 

The Company is pleaseto announce that it has now signed an agreement with the  Intercontinental  Hotel Group ('IHG') to build 200 room hotels in both Nashik and Aurangabad. Subject to the finalisation of financing, the hotels are expected to complete by Q4 2013. West Pioneer will build and own the hotels and IHG will operate them under its Holiday Inn brand. 


As previously announced all planning and design work for the malls in Nashik and Aurangabad  has been completed, however the Company does not believe that in the current climate it will be prudent to commence construction activity at these sights until retailer confidence improves. 


Outlook 

Whilst 2008 proved to be a difficult year for the economy, particularly for the retail sector, we remain confident that 2009 will see progress.  According to Reserve Bank of India figures, inflation has already decreased from its peek of 12.9% in August 2008 to 5.6%. Although there is an overriding sentiment of caution in the retail sector, India is anticipated to achieve at least  GDP growth of 5.2% in 2009 making it the second fastest growing economy after China.  Importantly for West Pioneer, organised retail penetration in India, is expected to continue to grow 9.52% by 2010 according to independent research by Crisil.     


Amit Jatia, Chairman of West Pioneer Properties Limited, said: 'The Indian economy, like other economies worldwide, has fallen over the past year, which naturally has had a knock-on effect on the retail sector. We are disappointed by the cancellation of a large tenant in Kalyan, but remain confident that Kalyan's unique position means that we will sign a new contract for a new tenant shortly. We are delighted to have signed a contract with IHG, one of the worlds leading hotel operators.'  


  For further information:


Libertas Capital


Aamir Quraishi / David Rae

            Tel: +44 (20) 7569 9650


Media enquiries:

Abchurch Communications


Heather Salmond / George Parker

Tel: +44 (0) 20 7398 7719

[email protected] / [email protected]

www.abchurch-group.com 



This information is provided by RNS
The company news service from the London Stock Exchange
 
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