GMR Infrastructure Ltd plans to invest around ₹350 crore to set up its first office park spread over 1 million sqft in Hyderabad in the next 3-4 years as part of its larger land monetisation plan, said a top company executive.
The New-Delhi based group, which operates Delhi and Hyderabad airports apart from other infrastructure businesses in India, has been looking to monetise several non-core assets including land parcels to bring down its mounting debt.
As of March 31, 2018, GMR Infrastructure's total debt stood at around ₹20,000 crore. Following investment of around ₹8000 crore into the airport business in March this year by Tata Group and two foreign investment firms, GMR's outstanding debt is likely to fell to about ₹12,000 crore, Sushil Kumar Modi, GMR’s group chief financial officer (strategic finance) had said.
Located within the vicinity of Rajiv Gandhi International Airport, Hyderabad, the 7-acre business park is being built as part of its planned GMR Airport City, a 1500-acre real estate development that would consists mostly of hotels, retail space, logistics, entertainment, healthcare and educational institutions.
Including the airport, GMR Airport Land Development - a subsidiary of GMR Infrastructure currently owns around 5000 acre in Hyderabad.
Comprising of five towers with each spanning across 2.4 lakh sqft, the business park will be built in two phases. "We will complete the entire project in next 3-4 years depending on the demand for office space in the surrounding area. We will spend about ₹350 crore to build the entire project," said Aman Kapoor, chief executive officer GMR Airport Land Development, at a press briefing in the city.
The investment will be funded through a mix of debt and internal accruals, he added.
Launching the first phase of the business park, Kapoor said building the office spaces is one of the first initiatives by the company to monetise the entire land bank it owns in the city. GMR Hyderabad Aerotropolis, 100% subsidiary of GMR Hyderabad International Airport Ltd, would be developing the Airport City including the business park.
"One of the biggest challenges that we have is the perception that it (Airport Land) is too far away. We believe that over a period of time this perception will change. So to do that our strategy is to ensure that more and more people come to this side. And our first project which is the Business Park is the first step in that sense," Kapoor said.
Not too far away from the office park, the company has also carved out a 120-acre logistics and warehousing park as well as a 19 acre retail development. While it has signed a memorandum of understanding (MoU) with Sungapore-based E-Shang Redwood( ESR) to develop the logistic park, the retail space is still in initial stages of planning.