K Raheja targets Rs 3,000 cr from part sale of office portfolio
MUMBAI: Realty developer K Raheja Corp has started the process to sell around 20% stake in its commercial or income-producing office portfolio spanning 20 million sq ft, said two persons familiar with the development. The company is looking to fetch Rs 2,700 crore to Rs 3,000 crore through this stake sale.
“While the intention to list the commercial portfolio through a REIT (Real Estate Investment Trust) remains, it has been taking time and is not moving as expected earlier. Instead the developer has now initiated the process of selling minority stake in this portfolio,” said one of the persons mentioned above.
With a large commercial portfolio, K Raheja Corp was seen as a prominent candidate for listing its real investment trust in India. The company has, so far, developed more than 30 million sq feet of commercial space across western and southern parts of the country. It has already appointed two investment bankers–Morgan Stanley and JM Financial–to take the stake sale process ahead.
While the company is going for a minority stake sale to institutions including private equity players, it has also kept the option of listing a REIT following this.
The company’s spokeswoman declined to comment for the story.
The country’s second largest developer of business parks currently has portfolio of completely leased 20 million sq ft office spaces across Mumbai, Navi Mumbai, Hyderabad and Pune.
In 1999-2000, K Raheja Corp developed the first organised suburban business park, Mindsapce in Mumbai’s Malad locality. The company has so far developed 7 million sq ft space in all including IT parks, commercial, residential and retail projects in this project spread over 110 acres in Malad. Some of the key tenants currently operating out of the developer’s IT parks are Accenture, Cognizant, L&T Infotech, Syntel, Capgemini and Wipro.
K Raheja Corp is also working on plans to build two infotech parks totalling 6 million sq ft leasable space in Mumbai and Pune over the next two years. The developer has branded its IT parks as Mindspace and Commerzone, with existing developments in Pune, Mumbai’s Malad suburb, Airoli and Juinagar in Navi Mumbai, and Madhapur in Hyderabad. Both the proposed IT parks on recently acquired land parcels in Mumbai and Pune will be developed under the brand Commerzone.
Institutional investors’ interest in Indian real estate, particularly commercial segment, is growing and sovereign funds, pension funds and large public institutions have been entering the country through acquisition of these properties.
Global investors including Blackstone Group, Singapore’s sovereign fund GIC, Canada Pension Plan Investment Board (CPPIB), Goldman Sachs and Qatar Investment Authority have already been investing in Indian realty assets for the last few years.