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
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.