Tata Realty, L&T put mall projects on the block

Tatas looking to sell four malls, while L&T its mall in Navi Mumbai

Tata Realty and Infrastructure, owned by Tata Sons, is looking to sell four of its malls. While one of them is slated for opening, three others are expected to come up in three years.

The mall set to open, and now on the block, is spread over 0.7 million sq ft in Amritsar, Punjab. Sale of the Amritsar mall is part of its plans to give exit to Tata Realty and Infrastructure Fund-1 (TRIF-1), which owns 90 per cent in it and rope in new investors, said Cyrus Engineer, head, sales and marketing at Tata Realty.

Although Engineer refused to talk on the valuation, according to property consultants, the Amritsar mall is expected to fetch the company around Rs 400 crore.

Tata Realty is mostly into development of commercial projects such as information technology (IT) parks and malls besides mixed use projects. It is also developing hospitality projects for Taj group of Hotels. Tata Housing, other realty development arm of Tatas, is mostly into residential projects.

Tata Realty would also look for an exit for their existing investors in its 450,000-sq-ft mall in Nagpur which is expected to be completed in the next three years. The TRIF-1 fund also owns a 90 per cent stake in the mall and the rest is owned by the company.

“The life of TRIL fund is coming to an end by the end of next year. The fund was raised seven years ago,” Engineer said.

Tata Realty is also keen to bring in investors in its 300,000-sq-ft mall project in Bangalore and another one in Gurgaon, Engineer said. “These two projects are not part of current TRIF fund,” he said.

In Bangalore, Tata Realty is doing a 13-acre mixed use project, he said. Similarly, engineering and construction major Larsen & Toubro is looking to bring in investors in its mall project in Seawoods, Navi Mumbai, and another in Chandigarh. The mall is part of the first phase of commercial development on top of Seawoods suburban railway station in Navi Mumbai, said J P Biswas, head retail leasing and marketing at L&T Realty.

The one million sq ft mall is expected to become operational by the middle of 2015. “This mall is part of transit oriented development project and part of six million sq ft which we are developing there,” according to Biswas.

While L&T is developing the mall and two million office space as part of the first phase of the project, in the second, the company is looking to develop a budget hotel and offices. L&T is looking to bring in a hospitality chain to run the hotel, he said.

Besides, L&T has also put its 1.2 million-sq-ft mall in Chandigarh on the block. The four-month old mall is generating average rentals of Rs 90 per sq ft. According to sources, the company is expecting over Rs 1,000 crore from the sale.

“We are in discussions with investors,” he said.

L&T Realty, the real estate arm of L&T, is developing residential properties in Parel , Powai and Andheri in Mumbai apart from office projects in the city.

Acccording to consultants, the sale of such projects is part of the company’s plans to derisk themselves from business risks.

“In development projects, aim of the developers is to monetise the project at the earliest. They look to derisk during or before the construction and some part after the completion of the project,” said Ambar Maheshwari, managing director, corporate finance at Jones Lang LaSalle.