AS REALTY DAWNS, COS PUTS ASSETS ON BLOCK | zameensantosh's Blog

HUL & Mafatlal Industries among Corporate Looking To Earn Rs 400 Cr from
Real Estate Holdings

As Talk of a revival in the real estate sector gains ground and big-ticket deals stage a comeback, large companies with property are looking to make the most of the tide.

A handful of corporate, including Hindustan Unilever (HUL), Mafatlal Industries and a private bank have put some of their real estate assets on the block. The total value of their properties could be in excess of Rs 400 crore.

Said Kaustuv Roy, executive director, Cushman & Wakefield (C&W), a global real estate consultant, “A residential property has a 5% return on investment if it is leased out while the corresponding figure for commercial property is 12-13%. Therefore, it might make sense to sell these assets rather than hold them.”

The private bank mentioned earlier has recently come out with a public advertisement inviting bids for three of its Mumbai properties. Of the three, one is a commercial property spread over 90,000 sq ft while the other two are residential with a total area of 60,000 sq ft. These could bring in as much as Rs 200 crore for the bank, said a person close to the bank.

HUL too has put four of its residential properties in Mumbai on the block, with an estimated value of over Rs 45 crore. While three of these are located in the up market Cuff Parade in South Mumbai, the fourth is in the suburb of Vile Parle in western Mumbai. HUL has been looking at ways to monetize its real estate assets for a while now and has sold some properties recently. The current transaction is being driven by C&W. An email sent to HUL did not elicit a response.

“This is a global phenomenon where corporate invest in real estate when they have surplus capital and monetize it (real estate) when they are in need of funds,” said Amber Maheshwari, director investments, DTZ international property consultants.

Mafatlal Industries, a part of the Arvind Mafatlal group, has also put its 85,000 sq ft property in central Mumbai for sale for which it is hoping to generate around Rs 100-150 crore. An industry tracker said a lot of potential buyers have shown interest.

Courtesy:- ET dt:- 23-09-09