New Delhi, June 11 -- Diversified business house Malpani Group, which is present across real estate, infrastructure, renewable energy, FMCG, amusement parks and hospitality sectors, has put one of its office buildings on the block and is engaging with potential buyers for a deal, multiple people familiar with the development told VCCircle.
Headquartered in Sangamner, Maharashtra, Malpani Group has presence across seven states in India and Dubai. The group's real-estate arm Malpani Estates has projects across residential, commercial and industrial segments in and around Pune.
Its commercial portfolio includes M-Connect and M-Agile, which are completed, and Malpani House, M-Ramanujan, M-Kautilya and M-Aryabhatta, which are under-construction
It is now engaging with investors to sell M-Connect. The project is spread across a construction area of over 6 lakh sq ft and boasts amenities such as a conference room, lounge area and entertainment zone.
"The developer has engaged with many investors over the years through multiple investment bankers but the deal has not gone through. It is still in the market, looking for a buyer for the asset," one of the people mentioned above said.
The second person said that the asset has been on the block for the past few years and that there has been constant engagement with asset managers for a deal.
The asset is likely to fetch the owner anywhere between Rs 200-300 crore (around $21-31.4 million) depending on deal negotiations.
"Investors, who have exposure to commercial real estate, prefer fully leased and stabilised assets that can start yielding rentals and also offer escalation [of returns] in the future. The fact that the asset is not fully leased yet is proving an obstacle in the completion of the deal," sources mentioned above said.
An email written to the spokesperson for Malpani Group did not elicit any response till the time of filing this story.
The real estate sector has seen quite a few deals in the office segment lately.
Investors follow broadly two strategies. First is to come in early in the lifecycle of a project and act as an equity partner with the developer during the construction of the project. Second is to buy into ready, leased and stabilised assets to earn rentals and price escalation with time while managing the asset.
The second category is more popular among investors, especially domestics general partners (GPs) while the offshore funds have traditionally taken the grounds up route as they have better risk appetite.
Recently, Mindpsace REIT acquired two assets back to back in Chennai with the acquisition of International Tech Park Chennai (ITP Chennai), Radial Road and Commerzone Pallikaranai.
ICICI Pru has also sealed back-to-back deals in office space from its second office fund Optimiser II. Recently, it acquired nine floors in VIOS Towers in Wadala, Mumbai for Rs 525 crore. Previously, it acquired RMZ Edge (Pune) and EcoWorld 21 (Bengaluru) for Rs 2,600 crore. It also acquired Aditya Shagun IT Park in Pune for Rs 520 crore.
Published by HT Digital Content Services with permission from VC Circle.