- Embassy Group shells out Rs. 1,200 cr for business park venture;
- Sobha Developers Rs. 327 cr for residential project
In two of the biggest real estate deals in the country, Bangalore-based companies Embassy Group and Sobha Developers have shelled out a total of over Rs. 1,500 crore to buy substantial stakes in a business park and a residential project.
While Embassy Group and its joint venture partner, private equity firm Blackstone, acquired 60 per cent stake in a 106-acre business park for Rs. 1,200 crore, Sobha Developers has bought a 50 per cent stake in Puravankara’s property in Kerala for nearly Rs. 327 crore.
The Vrindavan Tech Village, now renamed Embassy Tech Village, is spread over 106 acres on the Outer Ring Road in Bangalore, and is planned as an integrated project with commercial components as well as retail and residential spaces.
Jitu Virwani, Chairman and Managing Director of the Embassy Group, said after the Embassy TechVillage acquisition, Embassy Office Parks would have over 20 million sq ft of commercial real estate space. “We now have over 150,000 park users across four business parks and enjoy strong and robust tenant relationships with over 100 blue-chip, MNC and Indian companies,” said Virwani.
Mike Holland, Chief Executive Officer, Embassy Office Parks, said the group would be constructing office suites for a number of potential clients, both SEZ and non-SEZ, to help them optimise costs and derive better value.
Kerala project
In the other deal, the residential project in Kerala will be constructed over approximately three million square feet, covering 16.69 acres of land. Sobha Developers has already paid Rs. 161.5 crore out of a total of Rs. 326.5 crore to Puravankara, a statement to the Bombay Stock Exchange said.
The rest will be paid within nine months from the date of receipt of the approved plan.
Under the terms of this deal, Sobha Developers will be entitled to a 10 per cent mark-up above the construction cost and an additional 5 per cent in net profits of the project as management fees from Puravankara.
The project will not materially impact the debt-equity ratio, which is expected to be around 0.60 by the close of the 2015 fiscal year, the statement added. Sobha Developers also said it has planned a spate of new launches and has a healthy project pipeline.
The realty company’s stock closed at Rs. 374.6, about 1 per cent higher than the previous closing price, while Puravankara closed 2 per cent higher, at Rs. 71, on Friday.
Source: The Hindu- Business Line
