Essar sells business park in Mumbai for Rs 2,400 crore

New Delhi: In one of the largest office space deals, Essar Wednesday announced sale of its 1.25 million square feet Equinox Business Park at Bandra-Kurla Complex (BKC) in Mumbai to realty firm RMZ Corp for about Rs 2,400 crore.

Essar may use some of the proceeds to pare its debt, which stands at about Rs 80,000 crore.

Essar said it has entered into an agreement to sell Equinox Business Park, developed by the Essar group firm Equinox Realty Holding Ltd.

This is the second major deal in the office market in recent months. Godrej Properties in September had sold 4.35 lakh sq ft commercial space at BKC for Rs 1,480 crore.

"Essar and RMZ Corp announce the signing of definitive agreement in connection with acquisition of Equinox Business Park, a 1.25 million sq ft office space prominently located in Mumbai's prime CBD at Bandra-Kurla Complex for approx Rs 2,400 crore," Essar group said in a statement.

Commenting on the transaction, Essar's Anshuman Ruia said the business park is being sold as part of the strategy to monetise non-core assets.

"This transaction fits in with the Essar's strategy of successfully building businesses and actively managing the portfolio of assets to create and deliver value. This is in line with the present objective and focus of Essar to monetise non-core assets and deleverage the balance sheet," Ruia said.

Essar's Executive Director (M&A) Sudip Rungta said the Equinox Business Park has four towers of which three are fully leased out.

One tower having about five lakh sq ft of leasable area has just been completed and is yet to rented out, Rungta said.

The business park houses tenants including Nissan Motors, Acropolis, Crompton Greaves, Gilbarco Aegis, Lafarge and alike besides the offices of Essar.

"We are confident that with this acquisition we will extend our core businesses into the growing markets with a world-class development opportunity in the heart of one of Mumbai's major regeneration zones," Bengaluru-based RMZ Corp Corporate Vice Chairman Manoj Menda said.

This is the latest in a series of large office space buyouts by RMZ Corp who has created a portfolio of rent-yielding commercial assets in India, the statement said.

Unlike housing segment, office market has been performing well on higher demand for space from corporates, including e-commerce companies and start-ups.

Gross leasing of office space rose by 15 percent to over 50 million sq ft in eight big cities of the country in 2015.

RMZ holds 20 million sq ft of core assets under management and is accelerating towards achieving a five-year growth plan of 80 million sq ft, anchored by Qatar Investment Authority.