Xander, APG buy Shriram’s Chennai SEZ for $350 million
THE INFORMATION TECHNOLOGY SPECIAL ECONOMIC ZONE IS PART OF ‘THE GATEWAY’ PROJECT IN CHENNAI’S TAMBARAM AREA
BENGALURU: The Xander Group Inc. and Dutch pension fund asset manager APGAsset Management NV have bought an information technology (IT) special economic zone (SEZ) in south Chennai for around $350 million (₹2,250 crore) from a joint venture of Shriram Properties’ and Infrastructure Pvt. Ltd and private equity fund Sun-Area Property Partners, according to two people familiar with the transaction.
The IT SEZ is part of ‘The Gateway’ project in Chennai’s Tambaram area. The 60-acre project has about 4.5 million sq. ft of IT office space, of which 1.8 million sq. ft is already developed and operational. After the deal, Shriram will develop the remaining portion of the SEZ and hand it over to Xander.
The Gateway project also has around 2.5 million sq. ft of residential space which is owned by Shriram Properties. The SEZ has close to ₹500 crore of debt on its books.
“The IT SEZ has been up for sale for a few years now. This is the second time Xander has bid for it, after being in the fray to buy it around three years ago,” said one of the two people mentioned above, who asked not to be named.
In 2014, Xander and an investor consortium led by APG said they were setting up a $300 mil- lion venture to buy income-generating, institutional-grade commercial assets across India’s main markets. Over time, if buying opportunities continued to emerge, the venture’s size would be increased to $500 million, they added.
A Xander spokesperson didn’t immediately respond to queries on the deal.
M Murali, the managing director of Shriram Properties, declined comment.
“This transaction enables Shriram Properties to liquidate this asset and also gives it an opportunity to play a bigger game. In the new RERA (Real Estate Regulatory Act) regime, this kind of capital will be a huge incentive for the company to push forward its expansion plans,” said the second person, who also spoke on condition of anonymity.
In November 2016, APG and Virtuous Retail (VR), the retail development arm of Xander Group, formed a joint venture that acquired a portfolio of three shopping mall assets from a Xander-sponsored fund for about ₹2,000 crore.