In­di­a­b­ulls Real Es­tate to sell of­fice prop­erty in Chen­nai to Black­stone

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Press Trust of In­dia let­ters@hin­dus­tan­ n

NEWDELHI : In­di­a­b­ulls Real Es­tate (IBREL) on Fri­day an­nounced sale of its of­fice project in Chen­nai to global investor Black­stone for Rs850 crore as part of its strat­egy to mon­e­tise com­mer­cial as­set.

The com­pany had in March this year sold 50% stake in two prime com­mer­cial prop­er­ties in Mum­bai to Black­stone for Rs4,750 crore.

In a fil­ing to BSE, IBREL in­formed that a com­mit­tee, con­sti­tuted by the board, has au­tho­rised ex­e­cu­tion of de­fin­i­tive trans­ac­tion doc­u­ments with Black­stone group firms for di­vest­ment of its 100% stake in its com­mer­cial as­sets at Am­bat­tur, Chen­nai.

The deal will fetch a “gross value of ap­prox­i­mately Rs850 crore” the­com­pa­ny­said adding


that this as­set was non-core.

The trans­ac­tion is ex­pected to be com­pleted in tranches by 30 Septem­ber, 2019. The Chen­nai project ‘One In­di­a­b­ulls Park’ is al­ready com­plete with 1.9 mil­lion sq ft of­fice space com­mand­ing an an­nual an­nu­ity rev­enue of Rs85 crore.

The share­hold­ers had given ap­proval for re-or­gan­i­sa­tion of its com­mer­cial leas­ing busi­ness in In­dia for achiev­ing sus­tain­able growth and for fur­ther strength­en­ing of its on-go­ing busi­nesses in core mar­kets, the fil­ing said.

“IBREL will­main­tainan as­set light model, and do reg­u­lar sales from its port­fo­lio of owned and com­pleted of­fice prop­er­ties to the rental plat­form with/of in­vestors this will en­sure pre­dictable earn­ings, high cash flows and high re­turn on eq­uity (ROE) for the busi­ness of IBREL,” the Mum­bai-based de­vel­oper said in an an­a­lyst pre­sen­ta­tion re­cently.

In April last year, In­di­a­b­ulls had an­nounced plans to re­struc­ture its busi­ness by cre­at­ing a sep­a­rate ven­ture for com­mer­cial and leas­ing op­er­a­tions as part of ef­forts to fo­cus on each seg­ment. It planned to hive off com­mer­cial and leas­ing busi­ness into a sep­a­rate en­tity In­di­a­b­ulls Com­mer­cial As­sets.

The US-based Black­stone di­rectly and along with its joint ven­ture part­ner Em­bassy group is cur­rently hold­ing huge com­mer­cial as­sets of over 60 mil­lion sq ft across ma­jor cities.

Un­like hous­ing sec­tor fac­ing multi-year slow­down In­dia’s com­mer­cial real es­tate seg­ment, par­tic­u­larly of­fice as­set, is do­ing fairly well and at­tract­ing huge in­vest­ment from do­mes­tic as well as global in­vestors.

Apart from Black­stone, global in­vestors GIC and Brook­field have been buy­ing com­mer­cial as­sets in In­dia. Es­sar group had in April this year sold prime com­mer­cial prop­erty Equinox Busi­ness Parks at Ban­dra-Kurla Com­plex (BKC) in Mum­bai to Brook­field for Rs2,400 crore.

At the fag end of last year, realty ma­jor DLF’s pro­mot­ers con­cluded the sale of their 40% stake in rental arm DLF Cy­ber City for nearly Rs12,000 crore. This deal in­cluded sale of 33.34% stake to Sin­ga­pore’s sovereign wealth fund GIC for Rs9,000 crore. In Septem­ber 2015, Go­drej Prop­er­ties had sold 4.35 lakh sq ft area in Go­drej BKC project to Ab­bott for Rs1,480 crore in one of the largest of­fice space deals

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