Indiareit, Paranjape in talks to sell stake in Pune SEZ

Indiareit, Paranjape in talks to sell stake in Pune SEZ

Bangalore:Indiareit Fund Advisors Pvt. Ltd and Paranjape Schemes (Constructions) Ltd are in talks again to sell all, or part of their stake, in the 130-acre export zone they are developing near Pune, after earlier discussions with a Tata Group company failed.

Flagship Infrastructure Pvt. Ltd, their special purpose vehicle (SPV) for the Blue Ridge special economic zone (SEZ) in Hinjewadi, is looking to dilute a majority stake in the 1.4 million sq. ft of space it has developed and almost fully leased out, said Shashank Paranjape, chairman of Paranjape Schemes, a Pune-based developer.

The total 2.9 million sq. ft of space that can be developed at Blue Ridge is valued at Rs1,000 crore, he said.

Flagship was in advanced talks with Tata Realty and Infrastructure Ltd’s fund till December, but the deal didn’t go through. “We are now talking to a number of funds which are focused on investing in rental yield generating assets," Paranjape said without giving more details.

The 1.4 million sq. ft of developed area in the SEZ is expected to generate a monthly rental income of Rs4.9 crore, escalating at about 15% a year.

Property analysts predict 2011-12 will be a year of exits for realty funds as a horde of assets are already in the market for sale. Several office and rental assets are likely to be on the block as the market for office space is on a rebound after the slowdown of two years ago.

Amber Maheswari, head of investment advisory at DTZ International Property Advisors Pvt. Ltd, said it takes about six months to a year for exits from realty investments. Funds that invested in 2006-07 need to start worrying about returning money to their investors, he added.

In 2007, Indiareit, which typically invests in unlisted real estate developers at an SPV level, picked up a 24% stake for about Rs250 crore in the Blue Ridge SEZ, which includes a residential township.

The realty fund recently exited an office project in Kurla, a Mumbai suburb, with thrice the return on its investment of Rs145 crore. The project is being developed by Neptune Realtors Pvt. Ltd.

“We are in the business of buying into projects and exits, and that will continue to happen," said Ramesh Jogani, chief executive, Indiareit.

Maheswari said that among the many properties on the block, interest would be higher in assets that yield rental income, but sales would depend on valuation.

HDFC Property Ventures Ltd has put up nearly half of its 3.4 million sq. ft of office space for sale for Rs640 crore. The fund invested in these properties almost four years back.