Bangalore
Mapletree India China, a wholly-owned subsidiary of Temasek Holdings, Singapore, has acquired 100% stake in a Bangalore technology park for Rs 800 crore. This is the largest private equity deal in the city's real estate sector in three years.
The international fund, which invests in real estate firms, has completely bought out the promoters of Assetz Global Technology Park, at least three people with direct knowledge of the deal told ET.
The project is a joint venture between development and marketing firm Assetz Property Group and Delhi-based investor Mithilesh Tripathy. "The promoters did not have funds to execute the project. The deal was closed at 4,000 per sq ft, which, though big, is lower than expectations," said an investment banker who did not want to be named.
Multiple banking sources familiar with the development said the company was in talks with funds such as Mapletree and GIC to liquidate the plot since last year and Mapletree emerged as the front-runner to buy the asset. Assetz Global Technology Park confirmed the development but refused to name the fund house. "The due diligence is going on and the deal is yet to be signed," said a senior executive at AGTP. Tripathy could not be reached for comment.
Global Tech Park, on Bangalore's Outer Ring Road, is an integrated mixed use development, which has usable area of 15 lakh acres or 2.5 million sq ft. As of October 2011, 5 lakh sq ft of developable area within the business park was operational, leased to LSI Logic, an infotech firm.
"The park was tailored to meet the needs of IT occupiers in Bangalore and was expected to be fully in operation by 2011, but was put on hold," said another person having direct knowledge of the deal. So far, the company has developed 3 million sq ft of commercial space and has around 30 million sq ft under construction that is slated for completion in three-five years. Even as many builders in other big cities of India are finding it difficult to raise funds for their projects, Bangalore has been attracting large PE deals.
The largest real estate priported in the real estate, housing and construction sectors, an increase of 30% in aggregate PE deal value when compared with the April-June quarter and a decrease of 34% when compared to the same period last year, says a report by Ernst & Young.
Bangalore continued to see healthy transaction activity in the same quarter, especially in the large office formats. The city recorded a vate equity deal closed in 2011 when Blackstone picked up 37% stake in Manyata Tech Park, the country's largest operational tech SEZ for over . 1,000 crore ($200 million). The property is a JV with south-based Embassy Property Development and landowner, Veeranna Reddy.
During the July-September quarter this year, PE deals worth $324 million were retotal absorption of 7 million sq ft till Q3 of CY2011, an increase of 20% over last year, with corporates looking for consolidation and expansion plans, mentioned a report by CB Richard Ellis, a market research firm.
"There is a huge demand for commercial real estate in Bangalore, but the challenge is unavailability of ready-to-occupy space. Absorption is expected to cross 10 million sq ft by the end of 2011," said Ram Chandani, deputy MD, south India, CBRE.
The third quarter saw stronger leasing activity with HUL's lease of 400,416 sq ft in Prestige Shantiniketan. Airbus took 120,000 sq ft in Xylem, Broadcom leased 260,000 sq ft in RMZ Ecospace and NetApp picked up 112,029 sq ft in Embassy Golf Links.
Assetz is a property development service company with a focus on complex, mixed-use, investment grade projects. Assetz follows a structured approach to developing and delivering real estate projects — from land identification and inception design, construction, financing, marketing, final occupation to ongoing asset management.
The Mapletree India China Fund is a dualcountry total return fund, which aims to harness the secular growth in both the countries. The fund invests in commercial, residential and mixed developments in tier-I and tier-II. As on December 31, 2010, the Mapletree Group owns and manages more than $14.4 billion of office, logistics, industrial, residential and retail/lifestyle properties, comprising $7.1 billion of owned real estate.
Source: The Economic Times
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