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India's oldest golf club knocks PE doors for real estate game

Shine Jacob  |  Kolkata 

Call it a new game for India’s oldest golf club, the first outside Great Britain.

Kolkata’s Royal Calcutta Golf Club (RCGC), established in 1829, plans to venture into the realty sector to create a regular source of income to augment operational revenue and garner funds for the club house and course upgrade.

The club authorities are already in talks with private equity (PE) firms to sign a joint development agreement for a housing project on five acres. According to an RCGC report, the firm is already in talks with Xander Group, which has interests in infrastructure, real estate, hospitality, retail and entertainment.

Confirming the development, RCGC chief executive Manmohan Singh said, “We are in talks with a PE player…but the amount to be raised and the nature of the project would only be decided once we sign a joint development agreement with it.” Before taking the PE route, the club had “contacted leading builders like Emaar and DLF.” While some were uninterested, others expressed reservations on partnering an organisation that could see a change in management every year.

When contacted, Xander refused to comment on the development. Since 2005, the firm has committed $1.8 billion of equity capital to the Indian market across private, public and credit investments.

While the PE player would be responsible for financing and construction, both parties would decide the pricing together.

The club had earlier planned to build a luxury hotel, and was in talks with Indian and foreign hospitality majors. However, the plan failed to materialise, owing to the long gestation period of seven to 10 years. According to an RCGC report, the club now plans to develop a mid-end hotel on one acre.

In 2011, the operational deficit of the club was Rs 2.47 crore, while non-operational income, including membership fees, sponsorships and banquet sales, stood at Rs 3.12 crore.

The move comes at a time when RCGC is set to host the inaugural edition of Professional Golf Tour of India (PGTI)’s year-ending championship. The tournament would account for one of the highest prize purses in the country (Rs 1.25 crore). The four-day event starting December 12, for which PGTI is joining hands with McLeod Russel, would feature the top 60 Indian professional players from the Rolex Ranking 2012 (as on the week before the event).

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First Published: Fri, June 22 2012. 00:26 IST