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IL&FS's headquarters in Mumbai sold to Brookfield for Rs 1,080 crore

The company has also resolved debt amounting to Rs 55,000 crore as of March end, the crisis-ridden company’s management informed on March 29.

Representative image

Representative image

The IL&FS's headquarters at Bandra Kurla Complex BKC, Mumbai has been sold to Brookfield for Rs 1,080 crore.

The letter of Intent has been given to Brookfield and the asset is to be handed over in 2022.

The Il&FS building was one of the first few high-end buildings to come up in BKC and has a leasable area of around 4.5 lakh sq ft. The top three floors were occupied by offices of IL&FS Group which will subsequently be vacated now that the deal has been done.

There was no response from Brookfield Asset Management.

Bandra Kurla Complex (BKC) was created by MMRDA as an alternate CBD to Mumbai, with the express purpose of halting the further growth of offices and commercial activities in South Mumbai.

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The building sits on a land admeasuring 12,550 sq m, and has a basement + stilt + 10 upper floors configuration.

Buildings in the vicinity include The Capital that commands rentals of Rs 250-265 per sq ft; One BKC with rentals of Rs 325 per sq ft and Godrej BKC with rentals of around Rs 300 per sq ft.

Asked what the deal means for the commercial market in the area, real estate experts said with this acquisition, Brookfield will invest capital in upgrading the building infrastructure as the building is more than 22 years old. This will bring in some level of office space for rentals in the market.

Major occupiers were Carlyle Group, PayPal, IDFC, IBM, Avendus Capital, IL&FS. The built-up area of the entire building is 322,268 sq.ft while around 300,624 sq.ft was owned by IL&FS.

The IL&FS building's location is the de-facto Central Business District (CBD) of BKC cannot be improved on. All banks and major corporates have presence here. Rentals for Grade A office properties in BKC range between Rs 220-230 per sq ft.

“It is also worth noting that Brookfield has a REIT portfolio, to which this building will be a worthy addition. As seen with similar acquisitions in BKC, the building may get renovated to a level where it will attract top global corporates to pay top dollar for presence here. As such, there is no much new office stock under construction in BKC, and a ready-to-move building is definitely a major draw for top-notch occupiers,” said Bappaditya Basu, Chief Business Officer - ANAROCK Commercial.

The company also informed that it has resolved debt amounting to Rs 55,000 crore as of March-end.

The resolved debt amounts to 90 percent of the total debt that was expected to be resolved, CS Rajan, managing director at IL&FS told reporters.

Since its last update in November, the company led by veteran banker Uday Kotak has resolved incremental debt amounting to Rs 2,700 crore.



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Moneycontrol News
first published: Mar 29, 2022 04:59 pm
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