Hi­ranan­dani to Turn Partnership Firm into a Cor­po­rate En­tity

Move could be a pre­cur­sor to list­ing of a REIT hold­ing 4.5 m sq ft as­sets in Powai

The Economic Times - - Companies - Kailash.Babar@ times­group.com

Mum­bai: Real estate de­vel­oper Hi­ranan­dani Group has started re­struc­tur­ing its partnership firm, which holds 4.5 mil­lion sq ft of com­mer­cial as­sets in Powai, a sub­urb of Mum­bai, into a cor­po­rate en­tity. The move could be a pre­cur­sor to list­ing of a Real Estate In­vest­ment Trust (REIT) hold­ing these of­fice as­sets, said two per­sons familiar with the devel­op­ment.

“We are cur­rently only re­struc­tur­ing the partnership firm into a sin­gle cor­po­rate en­tity,” said a spokes­woman of Hi­ranan­dani Group, but de­clined to com­ment on mon­etis­ing of these as­sets through list­ing of a REIT, or the pos­si­bil­ity of a stake sale.

“Dur­ing the process of the Hi­ranan­dani Estate, (Thane)-TCS com­mer­cial trans­ac­tion, we were ap­proached by a lot of in­vestors. No­mura was ap­pointed to pro­vide us with var­i­ous sce­nar­ios. How­ever, the com­pany is not en­vi­sion­ing any trans­ac­tion on that front,” she said.

Hi­ranan­dani Group, a partnership be­tween Hi­ranan­dani brothers Ni­ran­jan and Suren­dra, has de­vel­oped this 4.5 mil­lion sq ft of­fice port­fo­lio in Powai over more than a decade. Cur­rently, these of­fices are fully leased and key ten­ants here in­clude Tata Con­sul­tancy Ser­vices, No­mura Group and Deloitte Con­sult­ing In­dia.

In the Union Bud­get for 2016-17, Finance Min­is­ter Arun Jait­ley re­moved div­i­dend distri­bu­tion tax on REITs, a move that’s ex­pected to ex­pe­dite the for­ma­tion of such en­ti­ties. Some large real­tors, in­clud­ing DLF, K Ra­heja Corp and Em­bassy Prop­er­ties hold­ing com­mer­cial prop­erty that can be listed as REITs, have also started con­sol­i­dat­ing their of­fice as­sets.


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