Indiabulls arm buys complex in Chennai for Rs 600 crore

MUMBAI: Indiabulls Distribution Services, a wholly owned subsidiary of Indiabulls Securities, has acquired a 2.4-million square foot commercial complex in Chennai for about Rs 600 crore by buying the entire share capital of the owner, India Land and Properties.

The complex with three towers has a leasable area of 2 million sq ft and is spread over 10 acres in the western suburb of Ambattur, which is emerging as a hub for ITITeS firms.

About half the space is leased to Britannia Industries, Royal Bank of Scotland, Kone Elevator, business process outsourcing company Ajuba, HR consulting firm Covenant India, Telebuy, IBox and other tenants.

“We are looking at it as an annuity business. Once fully leased, we are estimating around .

Rs 75-80 crore as our annual rental income from this property. We are hoping to lease the office spaces here completely in the next couple of quarters,” Divyesh Shah, chief executive officer of Indiabulls Securities, told ET.

Currently, the monthly rental values in the complex are about .

Rs 40 per sq ft and lease contracts are scheduled to be reset after four years. The complex has been renamed One Indiabulls Park, Chennai, from India Land Tech Park.

Indiabulls Distribution Services is engaged in marketing real estate projects across the country. This is the company’s maiden property acquisition at the entity level. The complex is 18 km away from Chennai’s central business district and 19 km from Chennai International Airport.

The key southern markets of Bengaluru, Chennai and Hyderabad together clocked in about half of the total corporate realty space take-up among India’s leading office markets during the first nine months of the year, CBRE said.

“Chennai, in fact, saw a strong quarterly growth rate of more than 50% in Grade A office space absorption during the third quarter of 2014, signaling a sustained improvement in office space leasing sentiments,” CBRE said.
According to property consultants, funds are expected to flow into Grade A office spaces across leading cities, including key southern markets, following the Securities and Exchange Board of India’s finalisation of norms for real estate investment trusts.