Prestige consolidating office business prior to fundraising

BENGALURU: Prestige Estates Projects Ltd, India’s third largest real estate developer by market capitalisation after DLF Ltd and Oberoi Realty, is in the process of consolidating its office business as a precursor to fundraising by bringing in an investor or going the real estate investment trust or REIT route.

“We are in the process of doing segment differentiation across residential, office, retail and hospitality projects owned by the Prestige group into separate verticals as all of them have grown into a sizeable business,” said Irfan Razack, chairman of Prestige Group.

The company is in the process of merging and demerging entities. It has 66 special purpose vehicles across various businesses and has been approached by at least a dozen investors to invest in office and retail assets. “We will either bring in long-term investors in the rental generating assets or tap the REIT market and are currently working towards it,” Razack said.

The company plans to use the money for future projects and expand the rental yielding business and reduce debt. According to property consultants Prestige’s’ rental yielding assets are valued around Rs 22,000 crore at 8% capitalisation rate.

Prestige Group has more than 24 million sq ft of leased, under-construction and upcoming office and retail properties, of which 4.36 million sq ft of office and retail properties are under construction. “We are doing the consolidation so that the verticals are ready to be monetised. We have deployed lot of capital in the income yielding assets. The plan is to churn and raise money and build more income producing assets,” said chief financial officer Venkat K Narayana.

Credits ET Realty

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