The Hindu Business Line : South City (Kolkata) gets high Crisil rating

CRISIL has assigned a PA2 rating to South City Projects (Kolkata) Ltd, the company that is developing a group of four 30 storey-plus towers, the tallest in the eastern part of the country.

The rating indicates that the company's ability to build the project in line with the specified quality levels and time schedules and to transfer a clear title is high.

A note issued by the rating agency informs that the land for the project has been acquired from Jay Engineering Works through the BIFR. The rating, therefore, reflects the superior quality of the title of the property.

South City Projects's good sales and construction contracts (with its respective counter parties) and its well-structured site and project documentation are also factored positively into the rating. The company has received all the required approvals from the authorities for this residential and commercial project, and has employed industry leaders to construct and execute it, Crisil stated.

The rating is also supported by the project's "good construction-related parameters in terms of the site plans and structural soundness, the infrastructure at site for executing the same, and the sales and after-sales services planned." These are in line with industry practices and have ensured the project's high saleability.

This provides additional comfort as healthy initial bookings ensure the timely availability of funds during the project execution stage.

These rating strengths are partly offset by the fact that the project is at an initial stage of construction.

The rating is also constrained by the six months delay in launching the project pending the approval of the site plan by the authorities. The company, however, plans to cover this delay by constructing the towers simultaneously.

It may be mentioned here that a consortium of five of the city's leading real estate developers have undertaken the project. South City Projects has purchased land measuring 31.41 acres from Jay Engineering Works. Besides the four residential towers, one commercial mall, a health club and a school will also be part of the project.

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