Piramal Bets Big on Commercial Flexi Lease
Co sanctions .₹ 2K cr under flexi plan for 2 prime assets in Mumbai and NCR
Mumbai: Piramal Fund Management (PFM), the financial services division of Piramal Enterprises, has sanctioned investments worth about .₹ 2,000 crore within three months of launching flexi lease rental discoun- ting (LRD) for completed commercial assets, including offices and retail space. The company recently approved two investments under Flexi LRD against two prime assets in Mumbai and the National Capital Region. The first investment is of .₹ 440 crore against the Wadhwa Group’s commercial property located in Mumbai’s business district of the Bandra-Kurla Complex. The second investment is of .₹ 580 crore against ASF Group’s IT SEZ development —‘ASF Insignia’ in Gurgaon. Prior to these, the fund had earlier approved Flexi LRD transactions with Reliable Group in Mumbai and Mantri Group in Bangalore.
“In November 2016, we announced our target for LRD to be .₹ 10,000 crore for the next 12-15 months and we have already achieved 20% of it within three months of its launch. We remain positively inclined towards commercial real estate as an asset class and look forward to actively scaling up our position within this space. The deal pipeline is robust and we may conclude transactions worth additional .₹ 500-1,000 crore over the next 30-45 days,” said Khushru Jijina, MD, Piramal Fund Management.
Taking its diversification strategy further, Piramal Fund Management recently expanded its portfolio to offer Flexi Lease Rental Discounting (LRD). Through these transactions, the fund will discount future cash flows of completed and leased commercial assets including office blocks and retail malls. Through this, it will be financing the developer up to 75% of the discounted cash flows from the property for up to 12 years. Piramal Fund Management has committed ₹ 580 crore towards the ASF Insignia SEZ IT office space on the Gurgaon-Faridabad road.
The 9.2-lakh-sq-ft building is fully leased to tenants, including TCS, IBM and Ericsson. Out of this commitment, .₹ 435 crore has already been disbursed.