A pedestrian walks past residential and commercial buildings under construction in the Worli area of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Essar Sells Office Asset In Mumbai To Brookfield For Rs 2,400 Crore

In a big-ticket real estate deal, the Essar group has sold prime commercial property Equinox Business Parks at Bandra-Kurla Complex in Mumbai to global investment firm Brookfield for Rs 2,400 crore.

“We have been able to conclude a marquee deal with a quality investor, Brookfield, who has an enviable track record of highly strategic and well-considered acquisitions,” said Anshuman Ruia, president of Essar Power Ltd. “This is among the largest transactions in India’s commercial real estate sector, and demonstrates the value we have been able to create in our Equinox investment,” he added.

This 10-acre business park comprises four towers, with a leasable office space of about 1.25 million sq ft.

Some of the companies that occupy space in the business park are Tata Communications, Experian, Crompton Greaves and Lafarge, Essar said in a statement.

The group will utilise the entire sale proceeds to repay loans. It is reducing debt by monetising non-core assets.

We are excited to bring Brookfield’s placemaking capabilities to Mumbai’s main business district. We will invest significant capital, introduce more F&B and modern amenities, and establish Equinox as a high-quality office destination.
Ankur Gupta, Real Estate Head-India, Brookfield

The Essar group had announced in 2016 that it would sell the property to Bengaluru-based real estate firm RMZ Corp, but the deal could not be concluded.

Unlike the housing sector, the commercial real estate, especially the office segment, is performing fairly well and has been attracting huge investment from domestic and foreign investors.

Recently, realty major DLF's promoters concluded the sale of their 40 percent stake in rental arm DLF Cyber City for nearly Rs 12,000 crore.

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In September 2015, Godrej Properties had sold 4.35 lakh sq ft area in Godrej BKC project to Abbott for Rs 1,480 crore in one of the largest office space deals.

Brookfield has significant presence in Indian real estate market. It had bought six IT-Special Economic Zones projects from the Unitech group in 2014 for around Rs 2,000 crore. Global private equity major Blackstone and Singapore's sovereign wealth fund GIC also own many commercial properties in the country.

Essar is a global investor, controlling a number of world-class assets diversified across the core sectors of metals and mining, energy, infrastructure (comprising ports and engineering procurement construction businesses) and services (shipping, IT and retail businesses).

The group invests long-term capital into the portfolio companies, which had an aggregate revenues of about $15 billion in 2017-18 and employ over 8,000 people.

Also read: Worst Is Over For Indian Real Estate Stocks, Says Deutsche Bank

Brookfield Asset Management is a leading global alternative asset manager with approximately $285 billion in assets under management. The company has more than a 100-year history of owning and operating assets with a focus on property, renewable power, infrastructure and private equity.