Realty developer Indiabulls Real EstateBSE 0.29 % is in advanced talks with global private equity (PE) majors including Blackstone Group, Brookfield Asset Management and Xander Group to sell its Chennai commercial asset One Indiabulls Park for around Rs 1,200 crore, said two persons with direct information of the development.
This is the second transaction the developer is about to conclude following the sale of 50% stake in its two office properties One Indiabulls and Indiabulls Finance Center in central Mumbai to Blackstone Group for $730 million or Rs 4,750 crore.
The developer has entered into executed definitive transaction documents with Blackstone Group LP to divest 50% stake in subsidiaries Indiabulls Properties Private Ltd and Indiabulls Real Estate Co. Pvt. Ltd at an aggregate enterprise value of $1.46 billion or Rs 9,500 crore.
This transaction for Indiabulls Finance Centre and One Indiabulls Centre, in central Mumbai, with over 4.1 million sq ft office space is expected to be concluded by the end of this month.
“The plan was to monetise Mumbai and Chennai commercial office assets separately. Now that the sale of first two properties has been finalised, the process for Chennai assets monetisation has gathered momentum,” said one of the persons mentioned above. The transaction for Chennai commercial asset is expected to be concluded over the next two-three months.
One Indiabulls Park, Chennai, is a 1.9-million-sq-ft commercial office asset and houses tenants such as Royal Bank of Scotland, YES Bank, Vodafone, BSNL and Britannia IndustriesBSE 0.30 %. The property is 90% leased and generates annual rent of Rs 75 crore, which is expected to rise to Rs 95 crore by 2019-20 owing to rental escalation clauses.
The company has also sold its Chennai residential development project for around Rs 300 crore as part of its asset monetisation plan.
The residential development Indiabulls Greens, Chennai, has 2.07 million sq ft of saleable area and according to the company’s most recent earnings release, around 63% of the project is sold and handover of flats has begun.
ET’s separate email queries to Brookfield Asset Management, Xander Group and Indiabulls Real Estate remained unanswered until press time.
Blackstone Group declined to comment for the story.
The company has stated that substantial part of the funds raised through the Blackstone transaction for two Mumbai office properties would be utilised towards repayment of existing debt of the company and its subsidiaries.
As at the end of December 2017, Indiabulls Real Estate had total debt of over Rs 10,600 crore. According to the persons mentioned above, the proceeds from the Blackstone deal and the sale of Chennai properties will be used to repay the company’s debt and bring net debt to under Rs 2,000 crore.
Indiabulls Real Estate, through its wholly-owned subsidiary Yashita Buildcon, has recently entered into a binding and definitive agreement to acquire a newly constructed commercial building with leasable area of around 2.5 lakh sq ft in Gurgaon.
With this acquisition, total annualised annuity revenue would be Rs 1,513 crore in 2020-21.
Source: Economic Times