Spirits major Diageo, which bought a controlling stake in Vijay Mallya’s United SpiritsNSE 1.95 %, will sell 30,000 sq ft of prime office space in the iconic UB Tower to DivyaSree Group in Bengaluru.
The deal, pegged at Rs 28,000 per sq ft, will be the highest ever fetched in the city’s office market. As part of the deal, the British alcoholic beverages company will sell and lease back the space to operate its office from the same premises after the transaction.
Bhaskar Raju, MD of DivyaSree Group confirmed the development.
“Diageo is in discussion with a Bangalore-based investor and is in the final stages of the deal closure. It can either be an entity level transaction or bought by an individual,” said people aware of the deal.
“This move is in line with our strategy to monetise non-core assets,” said a spokesperson from USL. Diageo Plc’s India arm owns five floors in UB tower and will only sell four floors as part of the assets disposal plan.
“The UB space is a premium office building in Bangalore and as part of the settlement with the UB Group in 2016, the spirits maker received real estate that it is now selling to unlock value,” said one of the persons cited above.
JLL served as the advisor on the transaction. UB tower is an iconic luxury commercial-cum-retail property in the heart of Bangalore, spread over 85,000 sq ft. Vijay Mallya also operated from the same tower. His private and family office is also on the top floor of this building.
“The firm (Diageo) also has additional 30,000 sq ft in UB City that it is looking to retain, apart from other real estate assets,” said the second person cited above, who did not wish to be named. According to media reports, the company has been looking to monetise its non-core assets to pare down its debt.
Between 2013 and 2014, UK based Diageo acquired 54.8% shareholding in United Spirits, making India one of its largest markets. Diageo, a global company, sells its products in more than 180 countries around the world and is listed on both the London Stock Exchange and the New York Stock Exchange.
In February 2016, Mallya stepped down as the company’s chairman with Mahendra Kumar Sharma, an independent director, replacing him.
Source: Economic Times