Aside from investments in securities and listed companies, Turquoise is actively pursuing investment in private equity opportunities as well. There is a wide-spread network of companies and individuals based in Tehran that generate investment deal flow for Turquoise to invest directly or introduce to potential investors.
Turquoise has made its first private equity investment in Iran in early 2007. The project is in residential real estate sector and consists of development and construction of medium-budget apartment units in the West Tehran. Below you can find out more about this investment.
Description:
This project involves the construction of 18,000 sq. m. of residential area in 240 units aimed for low to medium-income families in Tehran. The land plot is located in the West of Tehran in Kan neighbourhood which in old days used to be a suburb but has become part of the Tehran Municipality as the metropolitan has grown over the past decades. The total land area is around 7,000 sq. m. The total size of the project is around $13 million of which $5 million is invested for the purchase of the land and the remaining injected into the project over an 18 months period for the construction of the building. Finished residential units in the area are currently sold at around $1500 per sq m. resulting in a total future income of around $27 million in current prices. This means that the return on capital would be over 100% if the prices remain stable and most likely even higher as price of property is expected to rise.
The land plot has already been purchased by Turquoise in Iran. The contractor and the architect of the project are in the process of designing the layouts of the units and the building as well as obtaining necessary building permits from the municipality. The construction of the project is expected to start in the last quarter of 2007, at which point, the units could be pre-sold to customers with a discount rate of 10-15%. Turquoise could recover its original investment at that point by selling some of the units and take on similar projects in the West of Tehran, which is the area where the City of Tehran is shifting towards due to its cleaner air and higher accessibility.
