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Last Updated : | Source: Mint

Canada’s Brookfield buys prime Mumbai real estate for Rs 750 crore

Scotland-based hotelier Narang, who owns popular restaurants such as Pizza by the Bay and Eat Around the Corner, besides hotel properties, The Gordon House and Rokeby Manor, has been looking to sell the asset at Sahar Road in Andheri East for the past seven to eight years.

Representative image
Representative image

Canada’s Brookfield Asset Management is acquiring a prime Mumbai real estate asset spread across 9.67 acres, which includes a 100-room premium hotel, for Rs 750 crore from Sanjay Narang-owned Mars Enterprises and Hospitality Ltd, said two people aware of the development, requesting anonymity.

Scotland-based hotelier Narang, who owns popular restaurants such as Pizza by the Bay and Eat Around the Corner, besides hotel properties, The Gordon House and Rokeby Manor, has been looking to sell the asset at Sahar Road in Andheri East for the past seven to eight years.

A five-star boutique hotel, Waterstones Hotel, and a club occupies half of the 9.67 acres, while the rest is an undeveloped land parcel.

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Brookfield has signed a memorandum of understanding (MoU) with Narang to buy the entire land parcel comprising the hotel as well as the vacant land, the first person said, adding that the asset management company has also “paid a token amount" as part of the transaction.

A Brookfield spokesperson declined to comment, while emailed queries to Narang on Saturday remained unanswered.

“They (Brookfield) went ahead with the deal primarily because there is potential in developing a commercial office space in the vacant land," said the second person.

The Toronto-based company, which has been rapidly building its commercial real estate portfolio in India, is likely to use the land to develop a 1.3 million sq. ft office space, the second person added.

Brookfield, which has built an office space portfolio spanning 25 million sq. ft in the last six years in India, manages assets worth $3.5 billion.

The transaction comes at a time when several large global funds and real estate developers are rushing in to buy fully-leased prime commercial assets to capitalize on the growing demand for office space in the country. Given the scarcity of fresh supply and availability of good quality assets, many are looking to tie up with developers to build offices on vacant plots.

“Brookfield has paid a hefty price for the plot...30-40% more than the market rate," the second person said. According to local brokers, land price in the vicinity stands at ₹60-70 crore per acre.

Narang, who moved to Scotland two years ago, has been looking to monetize some of his land assets, said a third person, also requesting anonymity.

However, he could not find a buyer for the Andheri property because it was considered too expensive.

“Three-four years ago, along with hotel and the plot, the asking price stood at around ₹1,000 crore, which was too expensive. Also, the demand for land to develop commercial offices, especially from global funds, shot up only in the last couple of years," he added.
First Published on Jul 4, 2019 08:46 am
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