Adani Group looks to monetise 'non-core' real estate assets

The Adani Group is exploring the possibility of monetising parts of its real estate holdings that have been internally flagged as non-core to its operations, said two people directly aware of the development. The group has already identified some such assets and is in the process of adding more to the list, the people said. These will be sold based on the need for funds to invest in the new real estate projects it is taking up, they said.

To begin with, the group has restarted conversations to explore a potential sale of Inspire BKC, a commercial real estate project situated on the edge of the Bandra-Kurla Complex (BKC), Mumbai's bustling business district that is home to a host of multinationals and Indian corporate houses.

"Discussions are currently underway with potential buyers which include Brookfield Asset Management and the Adani Group expects a non-binding term sheet soon with a tentative valuation of ₹650 crore," said one of the people.

Inspire BKC has a total leasable area of 800,000 sq ft, and is fully leased to tenants like Novartis, Reliance Nippon Life Insurance and MUFG Bank.

The 10-storey standalone tower was built in 2016 as part of a slum rehabilitation project. The talks of the asset being on the block has been going on since 2017 with several global institutional investors reported to be looking to acquire it.

A Brookfield spokesperson declined to comment on a query sent by ET. An email sent to Adani Group on Sunday seeking comment remained unanswered at press time.

"Alongside, the group has also identified the real estate holding of group firms ACC Ltd and Ambuja Cements which it acquired last year from Holcim," said the second person.

The group is looking to monetise around 16 acres owned by ACC in Thane near Mumbai, this person said, adding that the group was expecting up to ₹500 crore from the transaction. A large chunk of Adani Group's real estate assets is owned by privately held Adani Properties.

The move is part of the group realignment strategy and the funds raised will be used towards meeting investment needs of the group's real estate projects.

A relatively late entrant into the real estate sector, the group is currently developing commercial and real estate projects in prime real estate markets including western India. The group has also won the bid to redevelop Dharavi, one of the largest slum clusters in the world, with an initial investment of about ₹5,069 crore.

The group will have to eventually invest ₹20,000 crore in the project and, 20% of this initial investment will have to be submitted to the Maharashtra government before signing the development agreement and an additional 20% on submitting an integrated master plan.