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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Blackstone’s Nucleus Office Parks targets 24.5 million sq ft by 2020 end – ET RealEstate

Blackstone Group is scaling up Nucleus Office Parks, an entity that houses commercial properties fully owned by the group, in a bid to own 24.5 mn sft of office parks by the year end, a senior official told ET. Half Blackstone Group’s portfolio is in Southern India.

“Nucleus will expand its capability in terms of development and stabilise the assets fully owned by Blackstone,” said Quaiser Parvez, CEO, Nucleus Office Parks.

Nucleus Office Parks currently has 9.6 mn sft of the operational and developmental portfolio across markets like Mumbai, Gurgaon and Chennai.

“The Southern commercial market including Chennai, Bangalore and Hyderabad, will have around 50% of the office portfolio including developmental assets for Nucleus Office Parks,” said Parvez.

So far Blackstone has followed a partnership model with builders like Salarpuria-SATTVA, K Raheja, Panschil and Embassy Group to buy income yielding commercial assets.

Nucleus Office Parks will also see Blackstone Group merging some of the assets from the ongoing Prestige Estates office deal.

Recently, Blackstone finalised the terms with Prestige to acquire rental income assets, including mostly office space and a few malls and hotels, for about $1.5 billion.

Additionally, it has also added the recent Indiabulls portfolio to the entity to consolidate all its fully-owned properties under a single entity.

Currently, Nucleus Office Parks has properties like One International Center (formerly Indiabulls Finance Centre), One World Center (formerly One Indiabulls Centre) and One BKC-Radius in Mumbai.

It also owns commercial space in Chennai and Gurgaon.

Blackstone currently owns the largest office portfolio totalling 120 million sq. ft across 44 assets in six cities.

The market value of Blackstone’s investments in India stands at $50 billion.



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Mindspace Business Parks REIT inches closer to IPO, revises darft prospectus – ET RealEstate

MUMBAI: Mindspace Business Parks REIT, an entity jointly backed by realty developer K Raheja Corp and private equity major Blackstone Group, has revised its draft prospectus to raise Rs 1,000 crore through fresh issue of shares via an initial public offering (IPO).

Both the entities are expected to offer a part of their existing shareholding through the offer for sale.

In January, ET had reported that this offer for sale will be around Rs 2,000 crore taking the total issue size to Rs 3,000 crore.

The company has updated the filing to reflect the new business environment in the backdrop of the Covid-19 induced lockdown.

It has leased additional 7 lakh sq ft to tenants across various properties since April 1.

As per the revised filing with Sebi, it has completed additional 3.3 million sq. ft. of new office space since its previous filing last year.

“While we did not incur significant disruptions in our operations from Covid-19 during the financial year ended March 31, 2020 and collected 99.4% of our gross contracted rentals for the month of March 2020, our properties were not fully occupied by the tenants for the months of April and May 2020,” the revised draft prospectus said.

However, the company also added that it has collected 97.8% and 95.2% of its gross contracted rentals for the months of April and May 2020 during lockdown.

The company has reported net profit of Rs 513.9 crore for the year ended March on the back of total income of Rs 2,026.2 crore.

Its portfolio includes a total leasable area of 29.5 million sq ft with five integrated business parks and five independent offices across the Mumbai Metropolitan Region, Pune, Hyderabad, and Chennai.

As on March end, the total market value of its portfolio is Rs 23,675 crore, including the facility management division.

The company’s clients include the likes of Accenture, Qualcomm, UBS, JP Morgan, Amazon, Barclays, Facebook and Capgemini.

As of May end, committed occupancy of its portfolio stood at 92.4% and average rent was Rs 52.5 per sq ft.



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