Tata Realty may raise up to 800 crore by selling Goregaon IT park

MUMBAI: Tata Realty & Infrastructure, the infrastructure development arm of Tata Group, has put its 780,000 sq ft IT park in Mumbai's Goregaon suburb on the block. It aims to raise Rs 800 crore through sale of this park after acquiring it from Kotak Realty Fund for Rs 525 crore in March 2011, said two persons close to the development.

Tata Realty's maiden fund - Tata Realty Initiatives Fund I - with a corpus of $750 million, is also considering selling four other assets built through this fund.

"Tenure of the offshore fund is about to get over in little over a year from now and this is the first asset the advisor is looking at exiting. Other assets, including a mixed-use project in Nagpur, Chennai IT SEZ and a mall in Amritsar, are also being considered for an exit," said one of the persons. Tata Realty did not respond to an email query. Around 96% of commercial space in this project has already been leased to tenants such as Accenture, BNP Paribas, Tata AIG, Mphasis (EDS), and India First Life Insurance at an average rental of Rs 85 per sq ft a month. These rent agreements will come for a revision in April 2015. Tata Realty Initiatives Fund I was raised in 2007 to fund realty and infrastructure projects across the country. The fund with total tenure of seven years has also invested in greenfield projects like Ramanujan IT City spread over 25 acres in Chennai, mixed-use project Capitol Heights spread over 9 acres in Nagpur, retail mall Trilium in Amritsar and a luxury residential project Tritvam in Kochi.

The IT park in Goregaon is currently controlled through the fund’s special purpose vehicle (SPV) Peepul Tree Properties. In August 2006, Kotak Realty, through its Kotak India Real Estate Fund I, had bought the Goregoan property, which was then under construction, from K Raheja Constructions for Rs 230 crore.

Realty funds’ interest in acquiring pre-leased assets, especially IT parks, has been on the rise despite a slower commercial property market. Blackstone, Barings Private Equity, Qatar Investment Authorities and IDFC Alternatives have executed some of the largest deals in this space so far.