Singapore-based global asset manager and operator Keppel has acquired One Paramount 1 tech park in Chennai for about ₹2,100 crore, said three people aware of the deal. The prime office asset is jointly owned by realty developer RMZ Corporation and Canadian pension fund CPP Investments.
The property in Chennai’s Porur area is spread over more than 12.6 acres of land. It has gross leasable area of 2.4 million sq ft comprising three Grade A office towers.
“This transaction was signed at a cap rate of around 8.5%, marking it the highest in recent times,” one of the persons cited earlier said, adding that the payment is expected this week.
Cap rate is a ratio of a property’s net operating income to purchase price, indicating potential return on investment. Genpact, Hitachi Energy, Maersk, NielsenIQ, UPS, VMware and Wabco are some of the tenants in this commercial complex.
“Commercial real estate has only started to recover now from a slowdown post the pandemic. Bengaluru-based RMZ has also faced challenges in terms of leasing milestones and exited with the financial partner once it was achieved,” said another source.
In 2021, RMZ and CPP Investments had formed a joint venture to develop 10.4 million sq ft of commercial office space in Chennai and Hyderabad. Upon completion, the projected value of these assets, including RMZ Paramount, RMZ Nexity and RMZ Spire in Hyderabad, was expected to exceed $1.5 billion.
“The exit is only from one asset in Chennai. CPP continues to be a partner of RMZ in other assets,” said another source.
Queries sent to Keppel and CPP remained unanswered, while RMZ declined to comment.
RMZ aims to create an additional $25 billion in assets over the next five years, with most of the development under the commercial segment.
The Menda brothers-owned company is planning around 135 million sq ft of gross development, with the office segment comprising the largest share, followed by mixed-use, industrial and logistics, hospitality and residential.
Private equity investment in Indian real estate remained resilient in the first half of the year. Institutional investment in Indian real estate surged to $4.8 billion across 40 deals in the first half of 2024, when the world was battling economic challenges, showed a recent report. Investment volumes in the first six months of 2024 have already reached 81% of the total made in 2023, which was at $5.8 billion.
The Indian office sector has been seeing sustained growth in demand, bucking the global trend of sluggishness.
