Business conglomerate Essar Group has announced the sale of its key Mumbai property – Equinox Business Park -- to Canada’s Brookfield Asset Management Inc. at an enterprise value of Rs 2,400 crore ($360 million).
The sale of 10-acre Equinox comes almost six months after VCCircle first reported that Essar was in talks with Brookfield to sell the asset after a sale agreement with southern developer RMZ Corp fell through. In 2016, RMZ and Essar Group had issued a statement that RMZ had agreed to acquire Equinox. The size of the deal —one of the biggest in real estate in 2016 — was likely around Rs 2,400 crore ($353 million).
The deal made now with Brookfield is among the largest transactions in India’s commercial real estate space, said Anshuman Ruia, president of Essar Power. “The deal demonstrates the value we have been able to create in our Equinox investment,” added Ruia.
Commenting on the deal, Ankur Gupta, Brookfield’s head of real estate in India, said, “We will invest significant capital, introduce more F&B (food and beverage) and modern amenities, and establish Equinox as a high-quality office destination.”
Located in Mumbai’s prime central business district, Bandra Kurla Complex (BKC), the 10-acre property comprises of four towers and a leasable office space of about 1.25 million square feet. In 2006, Essar was a licensee in the park. In 2008, it acquired the towers and, by 2012, it had bought the entire park. Over time, Essar developed the park in BKC with campus-like facilities. These facilities included a commerce centre, club house, food court, cafeteria, banquet hall and parking.
Some of the companies in the park are telecom firm Tata Communications; Experian Plc., the world's biggest credit data company; Crompton Greaves Consumer Electricals; and French cement group Lafarge.
Essar Group has been divesting its real estate properties and other non-core assets over the last few years in a bid to pare debt. The company had sold its luxury residential project Water’s Edge to SNN Builders in 2016 for around Rs 300 crore.
Recently, it also sold its business process outsourcing unit Aegis to a private equity consortium for around $320 million.
Brookfield Asset Management is a leading global alternative asset manager with $285 billion in assets under management. The company has more than a 100-year history of owning and operating assets with a focus on property, renewable power, infrastructure and private equity.
It has been steadily increasing its exposure to the Indian real estate market across different segments. Recently, it agreed to invest Rs 800 crore across a bunch of projects of Bengaluru-based developer Total Environment Building Systems through structured debt.
Before this, it signed a mega deal with Mumbai-based developer Hiranandani Group for its office and retail portfolio for a whopping $1 billion.
Like Brookfield, several global investors are pumping in big bucks in the Indian real estate market, especially in rent-yielding assets. GIC struck a $1.39 billion deal with the promoters of DLF Ltd to buy into the rental arm of the company.
Blackstone has been aggressively adding to its commercial portfolio and recently took over the stake of The Xander Group in ICC Pune.