Bengaluru: Real estate developer Prestige Estates ProjectsNSE 1.47 % Limited (PEPL) plans to sell 25% of its office portfolio to individual investors to expand its commercial business.
The Bengaluru-based firm, which that got listed in 2010, ceased to sell office assets to individual investors post listing.
“We will be resuming strata sales (or sales to retail or individual investors) of office assets as many investors are looking to invest in yielding assets. This will also give us required liquidity as we look to scale up our commercial business. However, we will continue to retain majority of the portfolio,” said Prestige Group CEO Venkat K Narayana.
The company has 23 million square feet of office portfolio operating and under construction, in southern cities. It is targeting an increase in rental income to Rs 2,600 crore by 2022-23, up from Rs 860 crore now.
Its rental business is valued at Rs 10,000 crore at 8% yield, and it had earlier planned to raise money through stake sale. It had signed a term sheet with GICNSE 1.50 % in 2018 to sell a 40% stake in a clutch of office projects for about Rs 2,000 crore but the deal could not
According to a recent research report of HDFC Securities, following an increase in its rental income, Prestige Estates Projects will have multiple avenues of deleveraging its balance sheet, for instance through real estate investment trustNSE 0.47 %.
“With PEPL not looking at any private deal for its annuity portfolio (after the GIC deal fell through in 2QFY19), it might look to either tap the capital markets or look for a 25% stake sale,” said the HDFC Securities report on the company The real estate firm, which has been focused on southern India so far, is also making an entry into Pune, with a commercial office project spread over a million sq ft, to expand its footprint.
The Bengaluru-based firm, which that got listed in 2010, ceased to sell office assets to individual investors post listing.
“We will be resuming strata sales (or sales to retail or individual investors) of office assets as many investors are looking to invest in yielding assets. This will also give us required liquidity as we look to scale up our commercial business. However, we will continue to retain majority of the portfolio,” said Prestige Group CEO Venkat K Narayana.
The company has 23 million square feet of office portfolio operating and under construction, in southern cities. It is targeting an increase in rental income to Rs 2,600 crore by 2022-23, up from Rs 860 crore now.
Its rental business is valued at Rs 10,000 crore at 8% yield, and it had earlier planned to raise money through stake sale. It had signed a term sheet with GICNSE 1.50 % in 2018 to sell a 40% stake in a clutch of office projects for about Rs 2,000 crore but the deal could not
According to a recent research report of HDFC Securities, following an increase in its rental income, Prestige Estates Projects will have multiple avenues of deleveraging its balance sheet, for instance through real estate investment trustNSE 0.47 %.
“With PEPL not looking at any private deal for its annuity portfolio (after the GIC deal fell through in 2QFY19), it might look to either tap the capital markets or look for a 25% stake sale,” said the HDFC Securities report on the company The real estate firm, which has been focused on southern India so far, is also making an entry into Pune, with a commercial office project spread over a million sq ft, to expand its footprint.
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