Top realtors see spurt in take-over proposals for stressed office projects

So far, there were opportunities in stalled residential projects for top developers like Godrej Properties

Top real estate developers such as Godrej Properties and Oberoi Realty are being flooded with takeover proposals for commercial properties from their distressed peers.

So far, there were opportunities only in stalled residential projects for the realty majors. “We are getting a lot of proposals for office projects. We are well placed to use such opportunities, and these will be processed by our fund management arm,” said Pirojsha Godrej, chairman of Godrej Properties.

Godrej Fund Management, a Godrej group firm, invests in residential and commercial projects. It had, last year, raised Rs3,200 crore for its commercial property fund and onboarded Allianz Real Estate as an investor.

Godrej Properties is seeing reasonable valuation from its partners in joint development/joint venture proposals, Godrej said in a recent call.

Oberoi Realty is also loaded with similar proposals and is in the process of evaluating them, according to Chairman Vikas Oberoi. The developer is looking to build a portfolio of residential, office, and mall properties in Delhi-NCR and Bengaluru, besides in Mumbai.

Oberoi recently said the company sought to be a serious office property developer following its office lease deal with Morgan Stanley. The deal was for leasing 1.1 million sq. ft with the i-banking major at its Commerz-III building, making it one of the largest office space transactions.

Shobhit Agarwal, MD of Anarock Capital, a realty-focused i-banking firm, said: “I am not surprised by top developers seeing a surge in such proposals. Many developers are distressed and need funds to do business and repay loans.”

Not only developers, even fund managers are seeing a spurt in takeover proposals for commercial properties.

Mumbai-based Nisus Finance is curating a portfolio of commercial properties, and has received close to eight proposals since April, said Managing Director Amit Goenka. “There is a pressure on rent. Lease rent discounting (LRD) loans need refinancing. A large pipeline of such properties have come to us in April and May,” said Goenka. 

Action in stressed residential projects, meanwhile, is already gaining steam.

Last year, the government had set up a Rs25,000-crore fund to aid stalled projects. According to estimates, over 500,000 apartments in 1,509 projects have been halted.

Last month, Finance Minister Nirmala Sitharaman said the SWAMIAH fund by SBICap Ventures has approved Rs8,767 crore for 81 stressed projects.