In the largest-ever deal in the Indian real estate industry, Bengaluru-headquartered privately-owned real estate investment, development and management firm, RMZ Corp has announced the sale of 12.5 m sq ft of 67 m sq ft of their real estate assets to a fund managed by Brookfield Asset Management, for around Rs 14,680 crore ($2 billion), the company has announced.
The deal will fuel RMZ's growth strategy of aiming to grow their real asset portfolio to 85 mn sq ft from the current 67 mn sq ft, over the next six years. The deal also includes divestment of the group's co-working business, CoWrks, the company said.
The fair trade regulator CCI had approved the proposed deal on September 29.
"RMZ has decided to divest a part of our Core Portfolio across Bangalore and Chennai to raise US$2 billion of fresh capital. Upon divestment, RMZ is now amongst the only zero debt real estate companies, globally. With this deal, we have ample headroom to achieve our next phase of growth that RMZ 2.0 has defined for us. Our Massive Transformative Purpose is to disrupt the way people view work, defining the future of space," said Manoj Menda, Corporate Chairman, RMZ Corp.
The transacted 12.5 m sq ft includes select assets spread across Bengaluru and Chennai. A significant part of RMZ Ecoworld, a 14 m sq ft development, is at the core of this transaction. RMZ Ecoworld was awarded the 2020 ULI Asia Pacific award for Excellence making it the Asia Pacific’s best real estate asset.
“This real estate transaction is momentous for the commercial real estate industry, in light of its large scale at the right juncture. Also, it further accentuates the unabating strength and resilience of the commercial office business,” said Arshdeep Singh Sethi, Managing Director RMZ Corp.
RMZ has the highest valued real estate portfolio in the country. Their portfolio, developed and under development, has assets worth 10 billion dollars under their ownership and management.
RMZ Corp is 100 percent owned by the Menda brothers, Raj and Manoj Menda. Eighteen years and growing rapidly, they have over 200 enterprise customers in six Indian cities and 67 m sq ft of real assets that are owned and developed by them.
With a growth strategy and the use of exponential technologies, they plan to build a quantified community across over 800 enterprise customers across 85 m sq ft of real assets.
Brookfield has already filed documents with Sebi to launch the country's third Real Estate Investment Trust (REIT) public issue to raise over Rs 4,000 crore.
Last week, Prestige group announced that it has agreed to sell its office, retail and two hotel properties to Blackstone.
US-based Blackstone has invested around 8 billion dollars in Indian real estate. It has sponsored the two India REITs launched and listed so far - Embassy Office Parks REIT and Mindspace Business Park REIT.
Gross office leasing across the top eight cities in the country witnessed a strong recovery, registering 80 percent growth to 0.44 mn sq m in the third quarter of 2020. New office completions during the same period, reported recovery of 126 percent to 0.33 mn sq m compared to the second quarter of 2020, Knight Frank India’s quarterly report titled India Real Estate Update - Q3 2020, said.
Office assets have been able to generate rental yields of 7-8 per cent.