Brookfield to acquire 100% stake in Seaview Developers at Rs 39.7 bn

01 Dec 2021

Brookfield India Real Estate Trust (RETI) will buy a 100% stake in Seaview Developers Private Limited (SDPL) at Rs 39.7 billion, which owns Candor TechSpace N2.

The process of acquisition will be financed in two ways, including a preferential issue of Rs 9.5 billion priced at Rs 294.25 apiece and a property level debt issue of Rs 29.1 billion at 6.78% annually.

From the preferential issue, Rs 4.95 billion will be allotted to the third-party investors, while Rs 4.55 billion will be allotted to Brookfield.

According to the report, Brookfield India RETI will issue the shares to Brookfield Group, Housing Development Finance Corporation Limited (HDFC) Life Insurance, HDFC and State Bank of India (SBI) through the preferential issue.

Chief Executive Officer of Brookprop Management Services, Alok Aggarwal, said that the acquisition would increase the company's operating area by 35% to 186 million sq ft and a 34% gross asset value growth to Rs 156 billion. Candor TechSpace N2 will also witness 15% mark-to-market potential and 0.8 million sq ft on-campus development potential.

It said that the acquisition would result in a decline in the average borrowing costs of Brookfield India RETI to 6.76%, with the expected cap rate of 7.7% in FY23 to 3.9% National Defense Council Foundation (NDCF) accretion, along with an increase in tax-free sources to more than 50%.

Veritas Legal is a legal advisor to Brookfield Group, while Kotak Mahindra Capital will give opinions to the officials of the Brookfield India RETI for the acquisition.

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