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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CPP Investments to invest Rs 1,500 crore in its JV with RMZ Corp to build office spaces – ET RealEstate

NEW DELHI: Realty firm RMZ Corp has tied up with Canada Pension Plan Investment Board to develop office complexes in Chennai and Hyderabad and the latter will invest Rs 1,500 crore (USD 210 million) in the joint venture.

Bengaluru-based RMZ Corp, which is one of the leading commercial real estate player, said it has entered into a joint venture with Canada Pension Plan Investment Board (CPP Investments) to develop and hold commercial office space in Chennai and Hyderabad.

“CPP Investments will invest Rs 1500 crore (USD 210 million), which will allow for the expected development of 10.4 million square feet of high-quality commercial office sites,” RMZ said.

Both the partners will have an equal stake in the JV firm.

The value of the partnership assets, once developed, is estimated to be over USD 1.5 billion, said Manoj Menda, Corporate Chairman, RMZ Corp.

“The partnership with CPP Investments, a globally respected institutional investor, will only strengthen our vision of achieving our hyper-growth strategy target of RMZ 2.0,” Menda said.

RMZ is amongst the only zero-debt real estate companies globally, said Arshdeep Sethi, Managing Director, RMZ Corp.

“With equity deals for assets over the last few months, we have ample headroom to achieve our next phase of growth,” he said.

The three sites that form this transaction – RMZ Nexity (Hyderabad), RMZ Spire (Hyderabad) and RMZ One Paramount (Chennai) – are Grade-A developments.

Of the 10.4 million square feet included in the transaction, 7.5 million square feet is under active development and construction of the remaining space will commence in the coming months.

“As India continues to be a strong source of global talent, demand for collaborative and engaging work space is expected to grow,” said Hari Krishna, Managing Director, Real Estate – India, CPP Investments.

The joint venture is well placed to meet the growing demand for high-quality sustainable office assets in Chennai and Hyderabad, he said.

In December last year, RMZ Corp completed the sale of its large commercial portfolio to Brookfield for USD 2 billion in India’s largest real estate deal.

The company utilised half of the proceeds to retire debt and the balance amount is meant for future growth.

RMZ group sold 12.8 million sq ft of 67 million sq ft (about 18 per cent) of their real estate assets to a fund managed by Brookfield Asset Management.



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Brookfield Asset to buy remaining stake in real estate unit for $6.5 billion – ET RealEstate

BENGALURU: Canada‘s Brookfield Asset Management Inc would buy the remaining stake it does not already own in its commercial real estate business Brookfield Property Partners for about $6.5 billion, the companies said on Thursday.

The deal was a raise from the $5.9 billion the alternative-asset manager offered in January this year.

The COVID-19 pandemic has driven a shift to remote working and kept people away from malls and shopping centres, hurting real estate companies such as Brookfield Property.

Unitholders of Brookfield Property will get $18.17 per unit, a premium of 26% to stock’s last close on Dec. 31, before the announcement was made.

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Brookfield India REIT to raise Rs 3,800 crore – ET RealEstate

Canadian alternative investment major Brookfield Asset Management-backed Brookfield India Real Estate Trust will be raising Rs 3,800 crore through a public issue of its Real Estate Investment Trust next week.

The issue, priced between Rs 274 and Rs 275, will open for subscription on February 3 and close on February 5, Brookfield said in regulatory notification.

In July, ET was first to report that Brookfield Asset Management is planning to raise $500 million to $700 million by listing a REIT by the end of the current financial year.

This will be India’s third REIT listing and second in the country during the ongoing pandemic. The proposed issue will be India’s first REIT which is 100% managed by an institution.

In India, Brookfield owns and operates a portfolio of infrastructure and real estate assets, including 42 million sq ft office properties. Around 14 million sq ft out of this will be offered under the REIT and 93% of the portfolio value is derived from completed assets.

Last month, in the largest ever real estate deal in India, Brookfield completed acquisition of RMZ Corp’s 12.8 million sq ft real estate assets for around $2 billion. These assets are not part of the REIT portfolio right now. The REIT has an identified growth pipeline of 15 million sq ft.

Prior to that, in India’s largest commercial space portfolio deal, it had acquired Hiranandani Group’s offices and retail space in Mumbai’s Powai suburb, for around $1 billion or Rs 6,700 crore in October 2016.

Some of the marquee properties that are being offered under the REIT include Kensington SEZ in Mumbai Powai’s suburb that counts large tenants such as Nomura, Deloitte, Credit Suisse. Candor Tech Space in Gurgaon and other key assets in Noida and Kolkata will also be part of this REIT portfolio.

Bank of America, Morgan Stanley, HSBC, Citibank are the lead bakers to the issue.

India’s REIT segment is now catching momentum with large portfolio owners increasingly gearing up to list part of their holdings here after the successful listing and performance of both the REITs Embassy Office Parks and Mindspace Business Parks.

Listed in April 2019, Embassy Office Parks REIT is co-owned by Embassy Group and the US private equity major Blackstone Group. Mindspace Business Parks that listed on bourses last month is co-owned by K Raheja Corp and Blackstone.

REITs and Infrastructure investment trusts (InvITs) can potentially raise up to Rs 8 lakh crore of capital for India’s infrastructure buildout over the next five fiscals, showed a CRISIL Ratings analysis.

Both the fundraising avenues are gaining currency in India, following the footsteps of the developed world and a deeper debt market where investors can discern risks and returns across infrastructure asset classes, and stable regulations will be critical to achieving this goal.



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