Tata Realty to grow commercial realty portfolio before rolling out REIT

01 Dec 2021

Tata Realty and Infrastructure Ltd will improve its commercial realty portfolio to at least 12 million sq ft over the coming 2 to 3 years before thinking of rolling out the real estate investment trust (REIT) public issue to monetise its rent-generating office assets.

Sanjay Dutt, the firm's Managing Director (MD) and Chief Executive Officer (CEO), told the media that the firm has 7 million sq ft of the rental commercial portfolio, almost all are office assets, and it is making massive investments in development. On Saturday, Tata Realty declared an investment of Rs 5,000 crore over the coming 7-8 years to create a 7 million sq ft IT park project in Navi Mumbai in collaboration with UK-based investment company Actis.

In the coming 2-3 years, Dutt said that the firm plans to develop its portfolio to at least 12 million sq ft before thinking of REIT. The occupancy level in its operational commercial facilities presently stands at about 95%.

Presently, there are three registered REITs -- Mindspace Business Parks REIT, Embassy Office Parks REIT and Brookfield India Real Estate Trust -- on Indian stock exchanges. Apart from IT parks and data centres, Tata Realty will additionally invest in the development of shopping mall projects in significant cities such as Delhi-NCR, Mumbai and Bengaluru. They will continue to fund retail as well.

In late 2019, the firm had sold two shopping malls for Rs 700 crore in Amritsar and Nagpur to Singapore-based Virtuous Retail South Asia. Dutt said that the firm had denied these retail assets as it wanted to focus on significant cities. Out of the entire 7 million sq ft portfolio, the firm presently has a 3,00,000 sq ft multi-level car parking cum retail project in Gurugram, Haryana.

As part of its development plan, Tata Realty, on Saturday, laid the foundation of its new IT park project 'Intellio Park', spread over 47.1 acre land at Ghansoli, Navi Mumbai. On this land parcel, they are doing 7 million sq ft of growth, especially IT space and data centres with some complementary retail and non-IT office space.

The entire investment on this project is Rs 5,000 crore. It is Tata Realty's biggest single investment in office real estate. In the first phase, the firm is building a five lakh sq ft building.

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