Xan­der buys of­fice as­set in Ben­galuru

HT Estates - - FRONT PAGE - Mad­hurima Nandy mad­hurima. n@ livemint. com

BEN­GALURU: Xan­der Group Inc. has bought an of­fice build­ing of around 250,000 sq. f t at Em­bassy Golf Links Busi­ness Park in Ben­galuru for Rs350 crore from San­jay Gho­dawat Group.

The ac­qui­si­tion has been made from Xan­der’s In­dia of­fice plat­form and is in line with the global in­vest­ment firm’s plans to ex­pand its com­mer­cial of­fice port­fo­lio in the coun­try.

The of­fice build­ing, Pine­hurst, is fully leased out to Fi­delity In­dia.

“Xan­der’s of­fice plat­form in In­dia is cur­rently val­ued at around $ 500 mil­lion and this ac­qui­si­tion is a good value-add to the port­fo­lio. Xan­der is look­ing to fur­ther ex­pand the port­fo­lio and has a strong pipe­line of ac­qui­si­tions which are of course sub­ject to due dili­gence,” said a per­son di­rectly fa­mil­iar with the trans­ac­tion, who did not wish to be named.

San­jay Gho­dawat, chair­man of the epony­mous firm, said it was a strate­gic sale which now en­ables the firm to re­build its real es­tate port­fo­lio to 2 mil­lion sq. ft of pre- leased prop­er­ties across In­dia in the next three years, with newer as­sets and bet­ter fi­nan­cial re­turns.

Col­liers was ex­clu­sively man­dated by the Gho­dawat Group to ex­e­cute the sale process. A Xan­der spokesper­son didn’t re­spond to queries.

San­jay Gho­dawat Group, which is into busi­nesses in sec­tors such as avi­a­tion, ed­u­ca­tion and con­sumer goods, bought the build­ing in Em­bassy Golf Links in 2003.

“We i ntend t o now buy stressed of­fice as­sets and re­grow our real es­tate as­set base. We want to use this cap­i­tal ( from the trans­ac­tion) to ex­pand our busi­ness and also to build a new port­fo­lio of of­fice as­sets,” said Shrenik Gho­dawat, di­rec­tor, San­jay Gho­dawat Group.

Xan­der has been ex­pand­ing ag­gres­sively for a while now, both in the of­fice and shop­ping mall space.

In Chennai, it cur­rently owns a 600,000 sq. f t of­fice build­ing.

In 2017, Xan­der group and Dutch pen­sion fund as­set man­ager APG As­set Man­age­ment NV bought an in­for­ma­tion tech­nol­ogy ( IT) spe­cial eco­nomic zone ( SEZ) i n south Chennai for around $ 350 mil­lion ( Rs2,250 crore) from a joint ven­ture of Shri­ram Prop­er­ties’ and In­fra­struc­ture Pvt. Ltd and pri­vate eq­uity fund SUN- AREA Prop­erty Part­ners.

I n 2014, Xan­der and an in­vestor con­sor­tium led by APG said they were set­ting up a $ 300 mil­lion ven­ture to buy in­come- gen­er­at­ing, in­sti­tut i onal- 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.

In De­cem­ber, Ro­han Sikri, se­nior part­ner, Xan­der In­vest­ment Man­age­ment Pte Ltd, the real es­tate pri­vate eq­uity arm of Xan­der Group, said that the firm has around 6 mil­lion sq. ft of of­fice space in its port­fo­lio.

“Apart from this, we have a strong pipe­line of ac­qui­si­tions that are cur­rently un­der dili­gence, ap­prox­i­mately 8 mil­lion sq. ft, where we plan to in­vest $ 350 mil­lion i n the next 12 months,” Sikri had said.

In­dia’s res­i­den­tial real es­tate busi­ness may be reel­ing un­der the ef­fect of a pro­longed slow­down, but that has not de­terred global in­vestors from in­vest­ing in the of­fice space.

Ga­gan Ran­dev, na­tional di­rec­tor, cap­i­tal mar­kets and in­vest­ment ser­vices, Col­liers In­ter­na­tional In­dia said, “We re­ceived strong in­ter­est from a host of bid­ders which clearly un­der­lines that in­ter­na­tional and do­mes­tic funds and in­sti­tu­tions are ag­gres­sively look­ing at ac­quir­ing Grade A pre­leased of­fice as­sets.” Due to a lull in the real es­tate mar­ket since last few years, there has been a price cor­rec­tion in many ar­eas, es­pe­cially those where the prop­erty prices had risen ex­po­nen­tially dur­ing the prop­erty boom.

So se­vere was the price cor­rec­tion that in some lo­cal­i­ties, the prop­erty prices even went be­low the cir­cle rate.

A cir­cle rate is the min­i­mum prop­erty rate de­fined by the gov­ern­ment for spec­i­fied ar­eas.

Even if a prop­erty is sold at be­low the cir­cle rate, the stamp duty, reg­is­tra­tion value and the cap­i­tal gain would be cal­cu­lated on the cir­cle rate, and not the ac­tual sale price.

For in­stance, in some ar­eas of Delhi, like Ma­ha­rani Bagh and New Friends Colony, the per square me­tre cir­cle rate is Rs7.74 lakh, while the pre­vail­ing mar­ket rate is be­low Rs6 lakh.

Sim­i­larly, even af­ter a few cuts in the cir­cle rates dur­ing

EVEN IF A PROP­ERTY IS SOLD AT BE­LOW THE CIR­CLE RATE, THE STAMP DUTY, REG­IS­TRA­TION VALUE AND THE CAP­I­TAL GAIN WOULD BE CAL­CU­LATED ON THE CIR­CLE RATE

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