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Kotak Eeady to Pay Rs 600 Crore for Contractor House
Yet another large property deal is brewing in Mumbai. The Kotak Mahindra group is in talks with developer Orbit Corporation to buy the ‘Hafeez Contractor House’— a prime commercial property of Orbit—for over Rs 600 crore.
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May 20, 2008 (FPRC) -- Yet another large property deal is brewing in Mumbai. The Kotak Mahindra group is in talks with developer Orbit Corporation to buy the ‘Hafeez Contractor House’— a prime commercial property of Orbit—for over Rs 600 crore.
Sources said Kotak may use its property fund Kotak Realty Fund for the proposed transaction. When contacted, Orbit CFO Ramashrya Yadav said: “We are in talks with various interested parties. We cannot disclose names. Once the deal is signed, we will inform stock exchanges.” Kotak Realty Fund CEO S Srinivasan declined to comment.
At present, real estate and retail funds operating in India are trying to buy into commercial properties to improve valuations. Many funds and developers are exploring options to float Real Estate Mutual Funds in India and Real Estate Investment Trusts in overseas market where higher valuations would help.
The Hafeez Contractor House which is located at Lower Parel in Mumbai, measuring 2.05 lakh square feet. The 35 storey commercial building is designed to cater around 500 companies.
Lower Parel is an emerging commercial destination with players like DLF, Indiabulls, Bombay Dyeing, Peninsula Land lining up commercial properties in the Parel-Worli belt.
Earlier, Orbit Corporation had planned to sell Hafeez Contractor House to The Sajjan Jindal Group.
Later, the Jindal Group dropped the idea and acquired Orbit Corporation’s Kalina land-cum-commercial property for Rs 807 crore. Both parties have been negotiating on a valuation of Rs 25,000 per sq.ft, comparatively lower rate than the prevailing commercial property rates in the Parel-Worli belt, sources said. Currently, developers are selling commercial space for Rs 28,000 to Rs 30,000 in Worli.
Close to 7-8 m sq ft Grade A commercial property is available in Mumbai now, with little additions in last three years. “The under construction projects have the potential to increase the commercial stock many fold and this may soften prices,” said an analyst. ..........
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