Alternate asset manager RMZ plans to invest around $2.2 billion (around Rs 18,000 crore) across different verticals, including office, hospitality and residential real estate, over the next five years, its CEO Thirumal Govindraj told Moneycontrol. The investment covers both greenfield developments and acquisitions across asset classes.
RMZ currently has approximately 17-18 million square feet of office space under construction, with plans to acquire an additional 10-15 million square feet in the offices segment by the end of 2025, primarily focusing on the six major real estate markets of Bengaluru, its home city, Chennai, Hyderabad, Mumbai-MMR, Delhi-NCR and Pune.
"The company is open to joint ventures, outright purchases and partnerships with fund investors for these acquisitions. RMZ recently delivered the first phase of its development in the Bengaluru pipeline at RMZ Ecoworld and plans to deliver another two phases by 2025 and 2026. The entire development pipeline of 17-18 million square feet is expected to be delivered between now and 2028, with various stages of completion throughout this period. Any new acquisitions made next year would have a development cycle of 36-40 months from the time of acquisition," Govindraj said.
Talking about greenfield projects, the company may announce a couple of new projects in the first quarter of the next calendar year.
"The company prefers constructing projects itself because acquisitions always have their challenges. Unless it's a compelling, Grade A building that RMZ feels will bring long-term value, the company prefers to control the quality, design, marketing and management of the building, which are its biggest strengths. With acquisitions, the asset may not come as per RMZ's specifications, and the company would have to upgrade it," he added.
Major pipeline in Bengaluru
In Bengaluru, RMZ prefers to develop large office parks, preferably between 50 and 70 acres, in areas like Outer Ring Road, Whitefield or North Bangalore.
"While nothing is currently in the pipeline on the scale of Ecoworld, the company is in talks with multiple landowners for potential acquisitions," the CEO said.
In terms of new cities, RMZ has extended its presence to Mumbai and Pune over the last three to four years, with 3 million square feet under construction in Pune and almost 4 million square feet in Mumbai, according to Govindraj.
The company also has a ready-built acquisition in Delhi and plans to announce a large, 40-acre project in the National Capital Region soon, which will be constructed by RMZ itself. However, the company does not plan to enter tier 2 cities at present.
Plans to expand offshore
The company said it is also scouting for opportunities to expand its operations offshore in countries like the US and the UK to begin with. "We are studying the markets carefully and nothing has been finalised yet. However, we feel a lot of other global markets like Dubai are over-saturated and would want to avoid (them)," Govindraj added.
In India, the company said, GCCs or global capability centres form a large part of its office occupier portfolio. "The way the segment is taking up spaces across the country, we estimate that GCCs will easily account for more than 60 percent of the country's office space absorption within the next 10 years," he said.
Among the recent GCC deals, the company announced its partnership with Chevron Global Technology & Services Private Limited to establish a $1-billion Chevron ENGINE at RMZ Ecoworld in Bengaluru. The lease period is for five years with an option to extend for another five. The approximate rent for the property was Rs 112-113 per square foot for a total of 3 lakh square feet of office space.
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