Hiranandani’s Powai retail space to be acquired for $1 billion

Developed over a decade, the Hiranandani Group, a partnership between brothers Niranjan and Surendra Hiranandani, which owns 4.5 million square feet of office and retail space in Powai, a suburb of Mumbai, will soon be acquired by Canada-based Brookfield Asset Management. This is said to be Mumbai’s largest property transaction in the commercial space which is worth $1 billion or Rs. 6700 crore.

“The process to restructure Hiranandani brothers’ partnership firm is already at an advanced stage and this will clear the way for the transaction. The deal is scheduled to conclude very soon,” a source familiar with the development said.

The developer group which holds the Powai assets is presently a corporate entity and this move may be a precursor to either listing of a Real Estate Investment Trust that would hold the office assets or stake sale.

Hiranandani’s Powai offices are fully leased to giants like Tata Consultancy Services, Nomura Group and Deloitte Consulting India.

Brookfield Asset Management is a global alternative asset manager which has been very active in India off late. The company acquired 100% stake in four special economic zones owned by Unitech Corporate Parks (UCP) and 60% stake in its two other assets in the country for Rs 3,500 crore in 2014.

Cheer in the realty sector as home sales increase by 6%

Aided by stagnant pricing, discounts from builders and launch of new projects at lower prices led to increased Home sales by 6% in the January-March quarter from that a year ago across eight top cities of India, according to a report by property research firm Liases Foras.

For the first time since January March 2014, the total sales across eight tier 1cities crossed 60,000 units. “The gap between prices of apartments and affordability has reduced to some extent, which has helped sales. It is an end-user driven market today,” said Pankaj Kapoor, managing director of Liases Foras.

Real estate Sales in the National Capital Region were up 33% and in Mumbai 12%, while in Bengaluru sales dropped 18%. Ahmedabad went up 32% in property transactions, whereas Chennai and Hyderabad witnessed a 25 per cent and 20% growth respectively. Kolkata was up by 14% while sales in Pune declined by 25%.

Although Prices remained flat in Mumbai, NCR saw a correction of 3% from a year ago, helping developers push their stock. Ahmedabad is the only city to witness double-digit growth in prices at 12%, the report observed.

Sales of houses under Rs 25 lakh increased 46% in the past one year while sales in the Rs 25-50 lakh bracket grew 13%, signifying greater affordability of homes.

“With prices remaining stagnant over the past two years across  markets coupled with falling interest rates on home loans, more people have started buying homes,” said Getamber Anand, national president of the Confederation of  Real Estate Developers Associations of India.

“The economy is booming; money is being spent on infrastructure. If there are good rains this year, the impact on home sales would be even higher,” said Niranjan Hiranandani of the Mumbai based Hiranandani Group.

Pankaj Kapoor of Liases Foras said that, if builders in Mumbai are able to spruce property prices by a further 15 – 20%, home sales could perk up to three times of the number today.

Mumbai real estate

Swiss chemical giant Clarian on Wednesday sold its 87 acre land parcel at Kolshet in Thane district to the Lodha Group for Rs 1,154 crore. The plot has a development potential of nearly 6 million square feet. Earlier, Oberoi Realty and Tata Housing also went land shopping in Mumbai for development projects.

Niranjan Hiranandani, Managing Director, Hiranandani Group has observed resurgence in real estate demand as a lot of builders have been looking for land parcels in the last 10-15 days. A part of the revival in this demand can be ascribed to expectations of a stable government at the Centre.

Executive MD Cushman & Wakefield (South Asia), Sanjay Dot notes that real estate prices have bottomed out in Mumbai. He says Lodha’s recent big land deal signals a lot of on ground activities. When asked about the pockets in Mumbai that have the highest growth potential in terms of rate appreciation, this is what he had to say.

“If you talk about property within the Municipal limits of Mumbai, Sewri, Wadala, Goregaon (East) and certain pockets of Chembur. Further, there is a big delta in Bhandup, Kanjur Marg, LBS Marg and in terms of valuation this pocket seems very attractive.

If you go corridor by corridor, we have seen enough upside between Vasai-Virar belts and now it seems to be between Kalyan and Dombivli on the central corridor beyond Thane city towards Bhiwandi where there is lot of traction and appreciation. In the eastern corridor, it is the pockets between Kalamboli & Panvel.

So, despite the present dismal sentiment in the realty sector, we would see these pockets appreciate the most in the near future”.