IL&FS expects BKC headquarters, GIFT City towers’ sale to fetch over Rs 1,350 crore – ET RealEstate

The government-appointed management of Infrastructure Leasing & Financial Services (IL&FS) expects the sale of its iconic corporate headquarters in Mumbai’s Bandra-Kurla Complex (BKC) and two commercial towers in Gujarat’s GIFT city to fetch over Rs 1,350 crore.

The non-banking finance company expects the final bids from interested entities for these real estate assets in May.

At least a dozen entities have expressed initial interest in buying the IL&FS headquarters and the final bids will show the actual conversion. The deadline for final bids for this asset is at the end of this month (April), but we expect this to spill over to May,” C.S. Rajan, Managing Director, IL&FS told the media at a web conference.

ET had reported in December that global institutional investors including the Blackstone Group, Brookfield Asset Management, Singapore sovereign wealth fund GIC, Ivanhoe Cambridge and Mapletree Investments have shown interest in buying the IL&FS headquarters. Domestic investors such as Godrej Fund Management and realty developer RMZ Corp were also said to have indicated their interest in the marquee property.

The landmark building was one of the first projects to come up in the BKC central business district. The 10-story office building, with about 450,000 sq ft of leasable area, counts IBM, IDFC, The Carlyle Group, Avendus and PayPal among its tenants.

IL&FS has also put two 28-storey commercial towers in Gujarat’s Gift City on the block. These are developed by special purpose vehicles–Sabarmati Capital One and Sabarmati Capital Two–respectively, which are subsidiaries of IL&FS Urban Infrastructure.

In a video conference on Thursday, the Uday Kotak-led IL&FS board told the media that it estimates overall recovery to be around Rs 61,000 crore, an upward revision to its previous estimate of Rs 56,000 crore. Improved valuations, better operating performance, enhanced recoveries from non-group exposures are driving higher recoveries.

The company has already received Rs 150 crore through sale of two realty assets in Mumbai and Kolkata and Dighi Port insolvency proceeds.

IL&FS is monetising these assets with an objective to manage debt obligations. The failure of IL&FS to meet repayment obligations in September 2018 had triggered a liquidity squeeze that gripped India’s non-banking finance companies. As part of a clean-up, the government replaced the IL&FS board, which has been engaged in trying to resolve its debt.



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BlackStone to expand headquarters at 345 Park Avenue – ET RealEstate

BENGALURU: BlackStone Group Inc has signed a deal to expand its presence at its Park Avenue, Manhattan headquarters, the asset manager’s landlord the Rudin family said on Thursday.

345 Park Avenue, the building where BlackStone’s current headquarters is housed, has been the company’s home for more than 30 years.

BlackStone will lease an additional 80,000 square feet of office space, bringing its total property to about 720,000 square feet. It also extended all its leases in the building for an additional year until 2028.

“This expansion marks a significant commitment by one of the financial industry’s leading firms and signals an important part of New York‘s recovery,” said Bill Rudin, chief executive officer of Rudin Management Company, the operating arm of Rudin Family Holdings.

BlackStone’s move to acquire more office space in Manhattan comes as COVID-19 vaccines are being rolled out in the city.

The company had completed a nearly 150,000 square feet of expansion in the building in 2018.

Other notable tenants in the building include global auditor KPMG and the National Football League.



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Goldman Sachs leases 1.5 lakh sq ft space in Hyderabad’s Knowledge City – ET RealEstate

Goldman Sachs Group has signed a long-term lease transaction for 1.5 lakh sq ft office space in realty developer Salarpuria Sattva Group and private equity major Blackstone Group’s joint project Knowledge City in Hyderabad, persons with direct knowledge of the development said.

While initially the deal size is pegged at around 1.5 lakh sq ft, the lease agreement allows American multinational investment bank and financial services major to extend the space to around 0.5 million sq ft later, depending on growth requirement.

“The property is ready and fully furnished already. Goldman Sachs can start operations from this new office by the end of first half of 2021. Goldman Sachs will be paying lease rentals of Rs 125 per sq ft a month for this office space,” said one of the persons mentioned above.

Total tenure of the lease agreement will be five years, including a lock-in period of three years.

This will be the New York-headquartered company’s first office in Hyderabad and will complement its Bengaluru office that helps its global businesses in execution and support.

Goldman Sachs declined to comment for the story, while ET’s email query to Salarpuria Sattva and Blackstone Group remained unanswered until the time of going to press.

Salarpuria Sattva Knowledge City is in Hyderabad’s dedicated information technology (IT) zone – HITEC city – and is one of the biggest IGBC certified platinum-rated green buildings, a key parameter for global occupiers.

The IT park is set up on 172 acres along the IT corridor of Hyderabad and the last phase of the project is nearing completion. The project already counts multinational companies including JP Morgan, State Street, Novartis, Microsoft, ServiceNow and EPAM Systems as key tenants.

The Blackstone Group, as part of its association with Salarpuria Sattva, had invested in this project in 2016. Blackstone has so far invested $200 million in three assets of Salarpuria in Hyderabad to acquire 50% stake.

Commercial real estate has continued to show a strong pipeline and conclusion of transactions despite the looming challenge of the work-from-home model. The office real estate across key property markets of India have cumulatively registered a 50% on-quarter growth in net absorption in the December quarter.

In the largest commercial office lease transaction across the country so far this year, American multinational corporation Qualcomm leased 1.6 million sq ft commercial space in realty developer K Raheja Corp’s IT park in Hyderabad.

This commitment for the large office space at the developer’s under-construction project Commerzone Madhapur is part of Qualcomm’s growth and consolidation strategy and the deal will have a total tenure of 10 years.

The southern markets of Bengaluru and Hyderabad have been leading the absorption and demand as indicated by their share of more than half of the net absorption. Office space transactions in Hyderabad have recorded over 600% on-quarter jump in the December quarter.



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K Raheja Corp inks pact for 0.5 million sq ft office joint development in Pune – ET RealEstate

MUMBAI: Realty developer K Raheja Corp has entered into a joint development agreement to develop a 3-acre prime land parcel in Pune’s Baner locality. The company has formed an alliance with a Pune-based developer Aditya Shagun Developers to develop the latter’s plot into a commercial office project.

The said land parcel has a total development potential of half a million sq ft. The project, once completed, is expected to be added to K Raheja Corp-Blackstone Group-backed Mindspace Business Parks REIT, India’s second listed Real Estate Investment Trust.

Currently, Mindspace Business Parks REIT’s portfolio consists of five integrated business parks and five independent offices aggregating 29.5 million sq ft of total leasable area.

“We will be developing the project together. Both the companies will be responsible for the branding and marketing of this project. We have already started the process to secure permissions for the development and hope to complete the entire project in 24-30 months by 2024,” said Rinku Shewani, partner, Aditya Shagun Developers while confirming the alliance.

The deal marks K Raheja Corp’s foray into the west Pune market that accounts for around 40% of total office space leasing in the city. The ongoing monthly rentals in micro-market of Baner range between Rs 75 to Rs 85 per sq ft.

“The western Pune corridor especially Baner and Balewadi is short on grade A quality office supply and hence this will be a very strategic development by K Raheja Corp. The profile of occupiers in this corridor is a mix of product development, digital, information technology-enabled services and research & development companies,” said Sanjay Bajaj, MD – Pune, JLL India, the advisor to this transaction.

ET’s email query to K Raheja Corp remained unanswered until the time of going to press.

Indian commercial real estate has started to make steady progress towards a sharp bounce back with rising space leasing despite the concerns of the emergence of work from the home model.

Pune, one of the key information technology and IT-enabled services hubs in the country, has seen a 128% sequential jump in office space leasing in the quarter ended December. The markets of Bengaluru and Pune continued to witness single digit vacancy levels, which augurs well for a strong rebound in these markets as economic and business conditions are expected to gradually improve in the coming quarters.

Large property developers with established market positions, strong balance sheets and adequate liquidity have weathered the ongoing uncertain business environment caused by Covid-19 pandemic better than smaller entities.

Consequently, the ongoing consolidation of the sector is expected to accelerate further, with larger and more established players gaining increased market share.



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