Zydus Healthcare bought the Walia Business Park at Goregaon East, Mumbai in fourth week of March 2017 for total pay-out of INR172 crores. The said property was lying vacant since last two and half years despite receipt of occupation certificate in Oct 2014 and was mortgaged to SBI in June 2015. The 2 basements + 2 podiums + ground + 10 floors building, admeasuring 79,832 sqft in carpet area is right on the Western Express Highway, Goregaon. The purchase price on carpet area is INR 21,545 per sqft and presuming building efficiency of 63%, the purchase price on chargeable area would be INR 13,570 per sqft.
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Netmagic has entered into an agreement in March 2017 with Hiranandani Group and Balaji Tele-Developers with total pay-out of INR 321 crores to develop a 2,86,691 sqft IT/ITeS building in Lighthall, Hiranandani Business Park, Chandivali, Mumbai. This transaction is a perpetuity lease at a one-time price of INR 11,198 per sqft with annual lease rent of INR 1.00 per sqft. Presuming 14% discount rate, the deals NPV would be at one-time price of INR 10,850 sqft as the total consideration of Rs 321 crores shall be made to the developers in a staggered manner over the next 13 months. We opine that Netmagic has negotiated a sweet deal primarily for two reasons: 1) they are investing in a building of their choice and specifications and 2) at a lower price as compared to the prevailing market capital values of INR 13,500 – 16,000 per sqft in and around Powai. The prevailing market capital values are derived using prevailing cap rates for fully leased commercial office assets of ~8.5 – 9.0% and current average rental values of INR 100-120 per sqft per month in and around Powai.
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Continue reading “Netmagic signs a lease in perpetuity with Hiranandani and Balaji JV for INR 321 Crore in Mumbai, biggest in last 2 years”