India’s property market is getting pace after mega commercial deals
Carnival Group
Currently, Indian property market is witnessing boost after the two mega commercial deals; In first deal; Carnival Group buys real estate project from L&T Group in Chandigarh and the deal price was Rs 1,785 cr and in second deal; Abbott Group buys office space from Godrej Properties in Mumbai and deal price was Rs 1,479 cr.
About the deal of Carnival Group:
As per the reliable sources, Carnival Group, which is leading multiplex player in our country bought a commercial project in Chandigarh City directly from the Larsen & Toubro (L&T), which is leading engineering and construction player in country and for that deal price was Rs 1,785 crore. This two million sq ft mixed use real estate project in Chandigarh City will include a mall, office space and a Hyatt luxury hotel. Before one and half year, L&T had put the project on the block and company was in talk with Carnival Group from last one year. According to the statement of Shrikant Joshi, CEO of L&T Realty, “It was our strategic decision to not to run the malls and hotels”. The more he added that at this point of time we are looking for opportunity to sell out upcoming malls in Navi Mumbai’s Seawoods region and regarding that we are in talk with other investors. It is expected that this acquisition will help the Carnival group to widen up the portfolio and this deal will also help the company to achieve a leadership position in the retail sector of country, as per the officials of the Carnival Group.
According to Shrikant Bhasi, Chairman of Carnival Group, “This acquisition is the part of our current asset creation initiative where we are trying to create new assets for the investment portfolio of company. The more he added that this deal will also help to expand our capabilities and make inroads into newer markets, however; this project will be operated as a separate unit and it will be led by Indi based management team. Off the records, it’s very clear that Carnival Group has been on an acquisition drive because it is third real estate acquisition after Leela Technopark in Thiruvananthapuram and Leela Infopark in Kochi. Previously, Carnival Group has also bought out the Big Cinemas multiplex business from Anil Ambani’s Reliance Group. Apart from that this group has acquired Glitz Cinemas, which was the part of Capital 18, a subsidiary of Mukesh Ambani controlled Network 18 Media
About the deal of Abbott Group:
deals of Carnival Group
In another deal Abbott Group, leading pharma company of India purchased 0.43 million sq ft of office space from Godrej Properties, which is located at Godrej Bandra Kurla Complex (BKC) in Mumbai and for that deal price was Rs 1,479 crore, it is one of the biggest office space deals in India. As per the statement of Ashok Kumar, MD and Director of Cresa Partners¸ a property consultant company, “The price of Rs 34,000 per sq ft, it is the higher than the market price and Abbott Group has paid 10 to 15 per cent higher price than market price, but as it is for self use and they are about to use it for Indian headquarters, so they didn’t bargain on the price”. However; for lease or rent offices properties prices are between Rs 250 and Rs 300 per sq ft in BKC and for sale property prices are between Rs 28,000 and Rs 30,000 per sq ft. at the same region.
The space which was bought from Godrej, Abbott Group is planning to build Mumbai office headquarters and it will be house of more than 1,500 employees. Godrej BKC is the joint development project of Jet Airways and Godrej properties for the development of a 1.3-million-sq-ft project. According to Sanjay Dutt, MD of Cushman & Wakefield, who also worked as the advisor for the deal, “Companies such as; Abbott and other large banks or fast-moving consumer goods companies (FMCG) continue to see India as a large market and this is why they are not hesitating to own the permanent space in India at high price. So, it makes sense for them to buy strategic assets. The more he added that valuations of the property and deal sizes are going to go up in the developing countries and it is just the beginning.
According to Pirojsha Godrej, MD and CEO of Godrej Properties, “Company will use the earning for debt repayment and to explore the new opportunities in the real estate market of India. The more he added that in present, two-thirds of the company’s debt pertained at BKC project.
