The agreement is a combination of a lease and an option to lease additional space later totaling 2.6 lakh sq ft.
Godrej Two is first of the development assets under the private equity firm’s GBTC I program and is jointly owned along with realty developer Godrej Properties.
The office development project is part of the larger mixed-use development The Trees, which will be a mix of commercial, hospitality, retail and residential offerings. The larger development is already home to the global headquarters of the Godrej Group and other companies.
“We are delighted to welcome Amazon India to Godrej Two and look forward to further strengthening this partnership across our office portfolio…This deal is a further validation of our funds’ investment strategy that is focused on creating a portfolio of world-class office buildings across the country,” said Karan Bolaria, MD & CEO, Godrej Fund Management.
JLL was the transaction advisor for this office space transaction.
Amazon India currently occupies nearly 40,000 sq ft in Godrej One and is looking to expand its presence here with this new lease deal.
Godrej Fund Management, the wholly-owned subsidiary of Godrej Investment Advisors and manages over $1 billion of capital across four funds.
MUMBAI: Godrej Properties, realty development arm of the Godrej Group has entered into an agreement to acquire a 20-acre land parcel in Kalyan near Mumbai.
The company is planning residential development on the plot and expects around 1.5 million sq ft saleable area. The project will comprise primarily residential apartments of varied configurations with a small amount of retail and commercial space.
“We are happy to add this new project in Kalyan to our portfolio. This fits well with our strategy of deepening our presence in key markets across India’s leading cities,” said Pirojsha Godrej, Executive Chairman, Godrej Properties. Ends
In an exclusive interaction with ET in August, Godrej had stated that the company is looking to leverage its robust brand and financial position to tap consolidation opportunities through distress situations arising in the real estate sector due to the ongoing pandemic.
According to him, Godrej Properties is well prepared to tap growth opportunities that may present themselves given that there is some distress in the sector with a lot of developers struggling.
In July, Godrej Properties had raised Rs 1,000 crore through non-convertible debentures on a private placement basis for a term of 3 years at 7.5%. It had also raised Rs 2,100 crore last year through a qualified institutional placement (QIP).
Apart from its independent developments, Godrej Properties has already been using asset light and capital efficient joint developments and alliances to support its growth and market share.
The company has reported consolidated net loss of Rs 20 crore in the June quarter that was marked by Covid19 outbreak’s impact on the economy. Total income for the quarter had declined 76.7% from a year ago to Rs 165 crore.
GFM would develop a 700,000 sq ft commercial project on the new property and it would mark the company’s foray in the Bangalore property market.
“Century has sold a part of the 2.4 mn sqft office land and is looking to divest some land parcels and raise equity to generate liquidity,” said people aware of the deal.
This investment has been undertaken under the Rs 3,200-crore ‘Godrej Build to Core-I’ (GBTC-I) fund.
GFM has two funds—$450 million Godrej Build to Core and a $150 million Godrej Office Fund.
Jointly both the funds can invest and develop office assets worth over $1 billion in value.
“Century is in talks with Godrej Fund to monetise 15 acre land in North Bangalore as part of the land monetisation drive. The firm had sold land worth Rs 500 crore last year, ” said another person, who did not wish to be named.
Several corporate companies, a leading private bank, a prominent real estate fund and a global asset management firm have made enquiries for possible bids, sources said.
The third and fourth floor office mortgaged to HDFC Ltd is scheduled to be e-auctioned on June 26 as part of the corporate insolvency resolution process underway before the National Company Law Tribunal (NCLT). According to a public notice issued by the NCLT-appointed resolution professional Ashish Chhawchharia, the approximately 1,69,983 sq ft saleable area on the third and fourth floor of the building will be put on the auction block.
The reserve price has been finalised at Rs 490 crore, and prospective bidder will have to pay an earnest money deposit of Rs 25 crore along with the bid document on or before June 24. An inspection of the property has been scheduled on Friday between 11am and 1pm.
Karan Singh Sodi, regional managing director, JLL India said, “The Jet Airways floors should generate a good level of interest even in these uncertain times as the base price issued is way below the recently concluded sale transactions for Grade A assets in BKC. The reserve price is approximately 25 per cent below the average prevailing prices for Grade A assets”.
The reserve price translates to a value of Rs 28,900 per sq ft, while the last big transaction in Godrej BKC was closed at Rs 36,000 per sq ft. Market sources said Grade A assets like Godrej BKC have been witnessing a healthy increase in rentals from 16 per cent to 21per cent in the last 12 months.
“This exponential jump was driven by three fundamental factors. Firstly, no new Grade A supply has come to the BKC micro market. The Grade A vacancy percentage has reduced from two digits in 2018 to below 7 per cent in the last two quarters. Lastly, there has been a steady demand from occupiers especially in the BKC micro market,” Sodi said.
Godrej BKC, developed by Godrej Properties Ltd on land owned by Jet Airways, has witnessed rents increase from Rs 235 to 240 per square foot (psf) in the last quarter of 2018 to Rs 270-275 psf level in recent months. A similar increase has been seen in rents in other Grade A buildings including One BKC, First International Finance Centre and Maker Maxity in the last 12 months.
JLL had concluded the sale of the IDBI Bank building of approximately 3 lakh sq ft to Securities Exchange Board of India for over Rs 900 crore at Rs 30,000 per sq ft as well as the Citigroup Centre that fetched over Rs 400 crore at capital value of Rs 36,500 per sq ft.