MUMBAI: Fort House, the home of Videocon Group, is getting a new owner in a deal that would turn heads: The Rs.300-crore transaction is among the biggest in South Mumbai this year, but would be toward the lower end of the rate gradient for a property of that size and in that location.
Dawat-e-Hadiyah, a charitable trust of the Dawoodi Bohra community, has entered into an agreement to acquire the DN Road heritage property that has 1.50 lakh sq ft office space, two persons familiar with the development told ET. State Bank of India is selling the entire building directly to recover its dues from the Videocon Group.
“Binding documents for the transaction have been signed, with the deal valuing the entire building at Rs.300 crore. Registration of the deal is expected to be concluded soon,“ said one of the persons mentioned above.
According to property consultants, the rate that works out to about Rs.20,000 a square foot cannot be taken as any benchmark as the property is being sold to manage the liquidity stress. Furthermore, the deal assumes significance as an entire building is being sold in a micro-market that usually does not offer similar opportunities. About three years ago, the freehold property of Voltas House was sold for Rs.21,000 a sq foot.
ET’s separate email queries to Videocon Group chairman Venugopal Dhoot, and to the State Bank of India remained unanswered until the report was sent for publication. Dawat-e-Hadiyah declined to comment.
Videocon Industries has been looking to monetise its properties in Mumbai, Delhi, Kolkata and Bengaluru, apart from global assets in Poland and Mexico, to infuse capital in the company. This heritage building houses Videocon’s headquarters and several offices, including Singapore’s multinational lender DBS Bank.
According to media reports, lenders had set a March 2017 deadline for the promoters of Videocon Industries to infuse capital into the company that is struggling to make timely payment of loans. The conglomerate with interest in businesses ranging from telecom to oil to consumer finance has outstanding loans of over Rs 40,000 crore.
For some time now, Videocon Group has been in the process of selling its non-core assets to reduce the debt burden. In March, it sold Videocon Telecommunications’ entire spectrum holding in six circles to Bharti Airtel for Rs 4,428 crore.
In 2016, in the largest ever space transaction by any international retailer on high streets across the country, Spanish fashion chain Zara has picked up 50,000 sq ft carpet space in South Mumbai’s most prime location off Flora Fountain, close to Fort House. Zara leased the space on the ground floor of Ismail Building diagonally opposite HSBC’s India head office located in Fort.
Credits ET Realty