 "Essar sells Mumbai business park to RMZ for Rs 2,400 cr")
The seller released a statement confirming the deal. The funds would be used to pay off a part of its huge mounting debt of around Rs 80,000 crore.
Essar’s promoter Anshuman Ruia said the business park is being sold as part of the strategy to monetise non-core assets. “This transaction fits in with Essar’s strategy of successfully building businesses and actively managing the portfolio of assets to create and deliver value. This is in line with the objective of Essar to monetise non-core assets and deleverage the balance sheet.”
Essar’s Executive Director (M&A) Sudip Rungta said the Equinox Business Park was developed by the Essar Group firm Equinox Realty Holding Limited. Located at the prime Bandra-Kurla Complex, the 1.25 million sqft of office space comprises four towers, three of which are completely leased out. The fourth, just completed, has about 0.5 million sqft of leasable area.
In September last year, Godrej Properties had sold 0.4 million sqft of commercial space at the Bandra-Kurla Complex for Rs 1,480 crore.
According to a recent report by the consultancy firm CBRE, top seven cities absorbed 38 million sqft of prime office space in 2015, the highest till date. The absorption in 2015 is 18 per cent higher than the previous year. Bengaluru led the list with 32 per cent share while the National Capital Region was second with 23 per cent.
Experts claim the market in office space segment has started picking up substantially and the deal value has taken that factor into account. As one tower of the business park is yet to be leased out, the asset is a good purchase for RMZ.
“We are confident that with this acquisition we will extend our core businesses into the growing markets with a world-class development opportunity in the heart of one of Mumbai’s major regeneration zones,” Bengaluru-based RMZ Corp Corporate Vice-Chairman Manoj Menda said.
This is the latest in a series of large office space buyouts by the RMZ Corp, who have created a portfolio of rent-yielding commercial assets in India, the statement said.
RMZ holds 20 million sqft of core assets under management and is accelerating towards achieving a five-year growth plan of 80 million sqft, anchored by Qatar Investment Authority. The Essar Group also has a residential project in Bangalore with 400 units, which is under construction and a land parcel in Thane. However, there are no immediate plans of divesting these assets, said sources.