Xander to buy Shriram arm’s IT SEZ for Rs 690 crore

BANGALORE: Global fund house Xander, the largest foreign investor in Indian realty assets, is close to acquiring an IT special economic zone in Chennai from the developer arm of Shriram Group for Rs 690 crore ($112 million), said people directly aware of the matter.

Xander, which has invested over $1.2 billion (about Rs 7,365 crore) locally, has signed a preliminary agreement and is working towards a final deal that is “not yet closed” . Shriram Properties, the real estate unit of the diversified southern conglomerate Shriram Group, has developed the SEZ as part of a larger 6-million-sqft mixeduse development on 58 acres purchased from erstwhile Standard Motors in 2006.

Shriram, and private equity investor Sun Apollo which owns a stake in the project, have been in discussions to unlock value from the SEZ for well over a year. Singaporelisted IT park developer Ascendas too has looked at the transaction but offered a lower bid. Shriram is developing a 2.5-million-sqft tech park, of which 1.7 million sqft will be ready by January next year.

Shriram declined to comment on speculation, while an emailed query to Xander remained unanswered at the time of going to press.

Xander — which has Lord Jacob Rothschild, Harvard professor Arthur Segel and Sid Yog as its founding partners — has been extremely bullish in lapping up Indian commercial asset spaces, much like its global peer Blackstone which has invested about $900 million (over Rs 5,520 crore) in domestic real estate till date. Risk investors have chased office space acquisitions , and tech parks in particular, that deliver stable returns in India’s otherwise volatile real estate play.

The existing tenant list of the Shriram SEZ includes Accenture , Tech Mahindra and TAKE Solutions, a listed IT company that is part of Shriram Group, among others. The SEZ is mostly leased, except for the 2,00,000 sqft nearing completion currently. Sources said Xander is likely to have first right of refusal on the remaining 8,00,000 sqft of commercial space development , which is expected to be completed in 24 months.