Bengaluru-based developers Prestige Estates and Brigade group have partnered to develop a shopping mall and a hotel in Chennai at a cost of around Rs 500 crore.
The two leading developers have jointly taken 7.5 acre land on 99 year lease in Chennai. "Prestige and Brigade group have joined together to develop one million sq ft area in this project. It will have a shopping mall and a small hotel of around 125 keys in this project," Prestige group Chairman and Managing Director Irfan Razack told PTI.
He said Prestige group will have 70 percent shareholding in the project while Brigade will have 30 percent stake. On Tuesday, Prestige Estates informed exchanges that it has entered into a Limited Liability Partnership agreement (LLP) with Mysore Projects Pvt Ltd, a wholly owned subsidiary of Brigade Enterprises Ltd in Prestige OMR Ventures LLP.
Prestige Estates Projects and Mysore Projects Pvt Limited are the partners in Prestige OMR Ventures LLP in the ratio of 70 percent and 30 percent, respectively. Brigade group also informed this development separately to exchanges.
Razack said the construction work will start after taking all the necessary approvals. Both the partners will make equity investments as well as raise debt to develop this premium commercial project, he said.
Razack said the Prestige group remains bullish on the long term growth prospect of India's commercial real estate sector despite disruption caused by the COVID-19 pandemic. The group would continue to build commercial portfolio and also monetise it at opportune time, he added.
Last week, Prestige Estates Projects announced that it has agreed to sell certain office, retail and hotel properties to global investment firm Blackstone — in a big ticket real estate deal estimated at around Rs 12,000 crore. Prestige group did not disclose the deal size, but sources had said that the Bengaluru-based firm has signed term sheets with Blackstone to sell commercial properties for an enterprise value of around Rs 12,000 crore.
The deal is expected to be closed by end of the next month after all the necessary approvals including that of the Competition Commission of India (CCI), sources said. The total office, retail and hotel assets to be monetised through this deal could be 15-20 million sq ft both completed and under construction, according to sources.
Two hotels with 336 keys are also part of the deal. Prestige group will utilise the fund raised through this monetisation to partly retire its debt and future expansion.