HNI in­vestors eye of­fice space in CBD

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Mad­hurima Nandy mad­hurima.n@htlive.com

BEN­GALURU: Bids are soon go­ing to be in­vited for the sale of around 30,000 sq ft of prime re­tail and of­fice space in the cen­tral busi­ness district (CBD) of Ben­galuru. The tar­geted bid­ders are ultra-rich in­di­vid­u­als and fam­ily of­fices.

Rath­nam’s Com­plex, also pop­u­larly called the Jew­els de Paragon build­ing, lo­cated in the heart of the city, in Lavelle Road, and the base price for the sale is Rs 40 crore for the en­tire space or a min­i­mum of one of the four floors

JLL is run­ning the ex­clu­sive man­date for the sale.

The sale of the build­ing comes at a time when United Spir­its Ltd, owned by Di­a­geo Plc., is in the process to sell 30,000 sq ft in UB City, a high-end re­tail and of­fice com­plex in Ben­galuru. JLL, which is run­ning the man­date for the sale, is eval­u­at­ing nine bids that have been sub­mit­ted by HNI in­vestors and fam­ily of­fices.

“There is huge de­mand for good qual­ity of­fice space in CBD ar­eas. There is a lot of in­ter­est among in­di­vid­ual, smaller in­vestors to buy of­fice space par­tic­u­larly when there are op­por­tu­ni­ties in prime lo­ca­tions in a city. Res­i­den­tial sec­tor isn’t do­ing well and there is no ac­cess yet to REITs (real es­tate in­vest­ment trusts), so this is a good way of putting money in real es­tate,” said Juggy Mar­waha, ex­ec­u­tive manag­ing di­rec­tor, JLL In­dia.

Prime of­fice space in CBD ar­eas across cities up for sale and HNIs and fam­ily of­fices are flock­ing to buy.

Over the last few years, in­di­vid­ual in­vestors have largely stayed away from mak­ing fresh in­vest­ments in res­i­den­tial projects while strug­gling to sell off

OVER LAST FEW YEARS, IN­DI­VID­UAL IN­VESTORS HAVE LARGELY STAYED AWAY FROM MAK­ING FRESH IN­VEST­MENTS IN RES­I­DEN­TIAL PROJECTS WHILE STRUG­GLING TO SELL OFF AND EXIT EAR­LIER IN­VEST­MENTS

and exit ear­lier in­vest­ments, amidst a slow­down sce­nario that has deeply im­pacted the hous­ing sec­tor.

Com­par­a­tively, the com­mer­cial of­fice seg­ment as an as­set class has fared much bet­ter, with high de­mand for such space and huge in­sti­tu­tional in­vestor in­ter­est.

ICICI Pru­den­tial Real Es­tate In­vest­ments, a division of ICICI Pru­den­tial AMC Ltd, re­cently sold four of its five com­mer­cial of­fice in­vest­ments to ultra-rich in­di­vid­ual in­vestors and fam­ily of­fices.

Among them are one in­di­vid­ual build­ing, and sev­eral stand­alone of­fice units, in­clud­ing a cou­ple of units in Mum­bai’s prime of­fice hub Ban­dra-Kurla Com­plex.

The firm had in­vested around Rs450 crore across five trans­ac­tions in Mum­bai, Pune and Noida for a 550,000 sq. ft port­fo­lio, which was leased to large in­ter­na­tional ten­ants. Th­ese ex­its re­sulted in an in­ter­nal rate of re­turn (IRR) of 10-21% on the in­vest­ments.

An April re­port by CBRE South Asia Pvt. Ltd re­ported that dur­ing the Jan­uary-March pe­riod, Ben­galuru re­ported the high­est de­mand for of­fice space and ac­counted for more than the com­bined share of the mar­kets of Delhi-NCR, Mum­bai and Hy­der­abad.

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