US-based PEs is in talks to buy commercial property from Lodha Developers.

By Abhay Shah, Realty Quarter

A US-based private equity real estate fund and a family office are among bidders who are in advanced talks to buy a commercial building from Lodha Developers at their New Cuffe Parade project in the Wadala locality of central Mumbai, said two persons aware of the development.

It is expected that the transaction will cost the commercial building, which has 665,000 sqft of office space distributed over 28 floors, at Rs 1,100-1,200 crore, they said, adding that Lodha Developers plans to use the money to decrease their debt obligation.

“Around six organizations, including pension, private equity funds and a national real estate fund, are among the participants. The deal is at an advanced point and is anticipated to be completed in the near future,” one of the people mentioned above said.

Lodha Developers and EY India transaction advisor refused to comment on the matter.

Among the tenants in the project are Tata Chemicals, Trent Tesco and GMM Pfaudler.

The developer has Rs 2,000 crore onshore debt maturities in 2019-20, a construction loan of 290 million pounds, or Rs 2,600 crore, due for his project at 48 Carey Street in London on December 2020, and the $325 million unsecured bond due in March 2020.

Because of liquidity management, rating agencies have lowered the company’s long-term issuer rating. In 2019-20, 2020-21 and 2021-22, respectively, the firm has national debt maturities of Rs 2,000 crore, Rs 5,000 crore and Rs 4,600 crore, a latest Fitch Ratings report said.

The interest in Lodha’s New Cuffe Project is influenced by its location with connections to the Monorail, Eastern Expressway and Eastern Freeway, in addition to the significant boost it is probable to obtain next month with the opening of the Bandra-Kurla Complex-Sion connector, which is probable to shorten a ride to the BKC business district of Mumbai for about 15 minutes.