In an interview with ET Now, Irfan Razack, Chairman & MD, Prestige Estates, talks about the new deal with GIC, the growing glut in office space deals and the company’s debt outlook. Excerpts:
“We are moving towards signing some definitive agreements and we will be liquidating a minority stake of up to 40 per cent into the rental yielding assets that is only office property and not retail. We hope to conclude this transaction by the end of this month or by middle of April.”
He said there has been a glut of deals regarding office space. However, in case of office properties investors are sure that whichever company they are investing in, they will be able to generate yields and returns almost immediately.
He said there are one-to-two properties under construction which have been added to the portfolio. But ultimately, the investors feel that office properties are far better and secure investments which give not only give returns but provide them with the option of easy exit. There is more appetite for good quality, A-grade office property.
He said HDFC was very keen to partner with us and invest in some mid-income housing. The mid-income housing is the order of the day and this is where the sweet spot is and where the volumes of sales happen on a continued basis.
The first deal that we are signing with them is of a 180-acre plot that we have in Sarjapur. The legal due diligence for the deal is on and very soon we should be tying that up. This will be the first of the deals for the platform.
We are exploring various options to see that whatever fund is available with us is utilised and we are able to create value both for ourselves and for our partners.
The capital coming in from the GIC deal will give us a bandwidth to create more assets and more rental yielding properties.
Under RERA regime the developer will have to utilise the proceeds of a project for that particular project, which is good. This brings in a lot of discipline.
The market currently is pretty healthy. “I would not say that it is very vibrant but it is a steady, solid market it is the best way to go because sometimes when you have those peaks you get carried away. It is always good to be secure and safe rather than getting euphoric and tumbling into trouble.”