Bangalore-based developer RMZ Corp has agreed to acquire Equinox Business Park in Mumbai from the realty arm of Essar Group for Rs 2,400 crore ($353 million) in the country’s biggest property deal in rupee terms.
The two companies have signed a definitive agreement for the deal, Essar said in a statement.
The Equinox Business Park is spread across 1.25 million sq ft and is located in Mumbai’s Bandra-Kurla Complex. It has four towers, of which three have been completed and rented out while the fourth is yet to see tenants move in.
The business park houses tenants including Nissan Motors, Acropolis, Crompton Greaves, Gilbarco Aegis and Lafarge. It also has some Essar offices.
“This acquisition will extend our core businesses into the growing markets,” said Manoj Menda, corporate vice chairman, RMZ Corp.
RMZ has 20 million sq ft of core assets under management and aims to grow it to 80 million sq ft in five years. Besides going solo, it acquires commercial assets through a joint investment platform with Qatar Investment Authority (QIA). The platform recently acquired an IT park in Gurgaon from BPTP Ltd for Rs 850 crore.
Major realty deals
The RMZ-Equinox deal is the biggest in rupee terms and one of the biggest in dollar terms as the local currency has depreciated against the greenback over the past couple of years.
In 2014, a joint venture between Embassy Group and Blackstone acquired a majority stake in Vrindavan TechVillage business park in Bangalore in a deal that valued the property at Rs 1,951 crore ($324 million then).
Also in 2014, Unitech Corporate Parks signed a deal to sell its majority stake in all its projects to Brookfield Property Partners for £205.9 million (Rs 2,049 crore or $347 million then).
One of the biggest commercial deals last year involved Blackstone paying almost Rs 1,060 crore ($165 million then) to buy 247 Business Park in Mumbai from Milestone Capital and Hindustan Construction Company.
Essar’s withdrawal strategy
The asset sale is in line with Essar’s strategy to divest non-core assets. The group has reduced its focus on real estate over the years and is looking to exit most assets it has under Equinox Realty.
“This is in line with the present objective and focus of Essar to monetise non-core assets and deleverage the balance sheet,” said Anshuman Ruia, a member of the family that controls the Essar Group.
The realty arm was started in 2007 and has 16 million sq ft under various stages of development, according to its website. Its projects are spread across Maharashtra, Karnataka, Gujarat and Madhya Pradesh.
In October last year, VCCircle reported that Equinox was talking to Bangalore-based Salarpuria Group to exit its flagship residential development Water’s Edge.