Citi puts former headquarters on the block

Consultants say the eight-storeyed building could fetch Rs 300 cr

US-based banking major Citibank plans to sell Citi Centre, its erstwhile headquarters in the tony Bandra Kurla Complex (BKC) here, according to people in the know.

The eight-storeyed building, with about 90,000 sq ft of space, was expected to fetch about Rs 300 crore, as BKC commanded a price of about Rs 30,000 a sq ft, said consultants.

Citibank’s move to sell its marquee property follows a move by the foreign lender to buy 312,000 sq ft of space in First International Finance Centre (FIFC), a building in BKC, for a record Rs 985 crore .The bank owns six floors in FIFC. The foreign lender has shifted all its front-end businesses, including consumer banking, investment banking and corporate banking, to FIFC.

“It does not make sense to hold on to Citi Centre, as the bank has now moved to a larger space. The transaction will help the bank monetise this asset and ensure efficient use of its capital in India,” a source familiar with the development said, requesting anonymity.

A Citi spokesperson declined to comment for this story.

Sources said Citi had appointed global property consultant CBRE to manage the transaction. CBRE executives declined to comment.

BKC, as was the case with the other business district here, Nariman Point, saw a fall in demand for office space in the September quarter. However, the Citibank property was expected to see good demand due to its sheer size, consultants said. “In BKC, you do not get a single building with 100,000 sq ft. For those looking at a standalone building of that size, it would be a good fit. The subdued market may not play dampener to the demand for such property,” said Raja Seetharaman, managing director of property consultant Aperon Realty.

“Even private equity funds and high net worth individuals can buy it. It is not a big-ticket property that can deter buyers,” Seetharaman said.

BKC, Kalina and Kurla (West), which formed part of the alternative business district here, saw a decline in commercial leasing activity during the September quarter. About 0.1 million sq ft was absorbed during the quarter, compared with about 0.16 million sq ft in the June quarter, CBRE said in its India Office market View Q3 2013 report.

In the last couple of years, Mumbai has seen a spate of big-ticket deals in the office space segment. Early this week, prominent diamond merchant Dilipkumar Lakhi beat some top developers to emerge as the highest bidder for the iconic Cadbury House in South Mumbai, owned by confectionery major Mondelez International. Lakhi quoted a price of Rs 350 crore for the property.

Private equity giant Blackstone and Pune-based Panchshil Realty have joined hands to buy Express Towers in Nariman Point from ICICI Ventures and Viveck Goenka.

In July, housing finance major HDFC said it was looking to buy Lever House, the erstwhile headquarters of consumer goods giant Hindustan Unilever.