Conglomerate Shapoorji Pallonji Group’s investment arm Shapoorji Pallonji Investment Advisors is set to acquire a commercial project Inspire BKC in Mumbai’s business district Bandra-Kurla Complex (BKC) from Adani Realty in a nearly ₹2,000-crore transaction, said two persons familiar with the development.
Shapoorji Pallonji Investment Advisors has already completed the due diligence process for this over 8 lakh sq ft project, and has emerged as the frontrunner from a total seven shortlisted interested entities that are believed to have included US-based private equity major Blackstone Group and an alliance between Qatar Investment Advisors (QIA) and Bengaluru-based realty developer RMZ.
“The due diligence process for the asset has been concluded recently, and currently the final documentation is going on. The deal is expected to be concluded soon as both the parties have frozen the structure of the transaction,” said one of the persons mentioned above.
The project has recently been completed and the developer is in the process of receiving few civic approvals, following which it will be concluded. Adani Realty is also working on closing few leasing transactions here. In one such lease deals, Swiss multinational pharmaceutical major Novartis’ India arm has entered into an agreement to pick up over 1lakh sq ft office space in this commercial project. This was one of the largest front office commercial transactions in terms of space in the country’s financial capital in 2017.
While space leasing transactions are being negotiated and finalised by the developer, Shapoorji Pallonji Investment Advisor is also kept in the loop on the progress of such transactions in this commercial project.
ET’s separate email queries to Shapoorji Pallonji Investment Advisors and Adani Realty remained unanswered till the time of going to the press.
It may be recalled that, in October, global insurance and asset management major Allianz Group, in its first-ever real estate related engagement in India, teamed up with Shapoorji Pallonji Group to create an investment platform for office properties.
The platform, SPREF II, will be a Singapore-domiciled, rupee-denominated and close-ended fund planning to raise $500 million in equity.
This is Shapoorji Pallonji Investment Advisors’ second such tie-up after partnering with the Canada Pension Plan Investment Board (CPPIB) in 2013 for a platform with an initial target corpus of $200 million.
It could not be ascertained if Shapoorji Pallonji Investment Advisors is picking up the Adani Realty property through any of these platforms.
However, according to both the persons mentioned above, the deal is expected to be concluded by Shapoorji Pallonji Investment Advisors independently, or it may form a separate alliance with another sovereign fund from West Asia.
Given the ongoing transformation in business environment led by the reforms undertaken by the government, Indian real estate is witnessing a robust rise in investment inflow as both foreign and domestic institutional investors are pumping in more funds into the sector.
Large global institutional investors, including Blackstone Group, Brookfield Asset Management, GIC, Canada Pension Plan Investment Board (CPPIB), Goldman Sachs and Qatar Investment Authority have been investing aggressively in Indian real estate assets over the past few years.
In addition to this, more funds are eyeing investment and alliance opportunities in the backdrop of recent policy reforms. While these entities had earlier shown interest in investing in commercial real estate, they are also looking at other real estate segments such as residential, retail and hospitality.
Commercial real estate has been registering a healthy growth across prime office markets in past three years.
Source: Economic Times