Two major business houses ? the RPG Group and the Essar Group ? are looking at selling off some of their land parcels they hold in Thane, near Mumbai, to raise funds. The move comes at a time when Thane is fast emerging as a budding IT destination and also offering housing in both middle-income and high-income groups.
Sources said the RPG Group is looking at divesting a 7-acre land parcel in Thane, which could fetch between R220 to R225 crore. The land belongs to the group company, KEC International, and housed a cables factory some time ago.
Responding to e-mail queries from FE, Ramesh Chandak, managing director and CEO, KEC International, said, ?The board is considering all options and monetising the land is one option?. He said the company recently closed the cables factory in Thane and commercial production has been stopped. Chandak did not disclose the amount to be realised from the land as he said the company has not checked the prices yet. ?The factory is at a very premier location in Thane. Thus, we should get a good rate,? he added.
Instead of the Thane plant, KEC has established a new cables greenfield facility in Vadodara, Gujarat, which he said is capable of manufacturing much more than the Thane plant and can produce high voltage cables of up to 220kV.
Though no official confirmation was available, industry sources said that Essar Group?s real estate company Equinox Realty is also looking at divesting a 7.5-8 acre land parcel in Thane, which is expected to yield R110 crore-R115 crore. This, sources said, is the land where Equinox had plans of having a real estate project, which has not taken off so far.
On its part, Equinox denied any plans to sell off the land. Responding to e-mail queries, the company said, ?We may look at some private equity partnership for developing the proposed project. This project is currently in the approval stage and we plan to launch it sometime towards the end of next year.?
Meanwhile, Clariant Chemicals and Blue Star are also understood to be in very initial stages of exploring land divestitures in Thane. They could not be reached for comments immediately.
Jones Lang LaSalle India recently listed Thane as among the ?emerging investment hotspots? in India, which has about 4.5 million sq ft of Grade A office space, about 5.3% of the total stock of the city. ?Various infrastructural initiatives by the government executed under the aegis of the nodal development authority, Thane Municipal Corporation (TMC), have greatly enhanced the connectivity of Thane to the prime business hubs of Mumbai and Navi Mumbai,? the report said.
?Awareness among corporates towards divesting real estate assets which are not generating value is fast increasing. In the current environment, when most corporates are reeling under high debt pressures, these asset sales help companies de-leverage their balance sheets,? said an industry consultant involved with corporate real estate divestments.
Recently, Reliance ADA Group has also put around 100 apartments in Navi Mumbai on the block, which earlier housed company?s senior executives, as part of its property divestment exercise. In the last one year, Hindustan Unilever, among the bigger corporates, has also divested its unutilised facilities like Gulita in Worli for R452 crore, leased out its previous headquarters at Backbay Reclamation at estimated R25 crore annual rent, and some residential apartments, to unlock business value.
