NEW DELHI: Parsvnath Developers has leased about 1.7 lakh sq ft in its office building near Connaught Place to big companies like SBI, Aditya Birla Group and Axis Bank, and expects an annual rental income of around Rs 100 crore from this project.
Parsvnath, which recently sold 140 acres at Sohna in Gurgaon to Supertech for Rs 665 crore, has completed construction of an official building covering 2.8 lakh sq ft of leasable area on Bhai Veer Singh Marg, Gole Market.
The company had bagged this project from Delhi Metro Rail Corporation, on a BOT (build-operate-transfer) basis in 2010. It has invested about Rs 300 crore to develop this project, including Rs 99.5 crore upfront payment made to DMRC.
"This is a world class new generation office building in CBD (central business district) area of Delhi. After many years, a new development has come up in the NDMC area. We are very excited about this project as it will give a good rental income to the company," Parsvnath Developers Chairman Pradeep Jain told PTI.
"We have so far leased 1.7 lakh sq ft office space in this building and the remaining about 1 lakh sq ft is in the pipeline. Tenants mix are AAA rated companies which includes SBI, AXIS Bank, Aditya Birla Group and Regus among others. Fit-outs are currently being done in the office building," Jain said.
Leasing transactions have been done at a monthly rent of about Rs 300 per sq ft and the company is expected to earn an annual rental income of about Rs 100 crore. SBI has leased about 45,000 sq ft area in this building.
Jain said this building is as per the norms of market regulator SEBI on Real Estate Investment Trusts (REITs) that has been notified last week.
In 2010, Parsvnath had sold 24.5 per cent stake in this commercial project to private equity firm Red Fort Capital for Rs 120 crore. The construction work of the project 'Red Fort Parsvnath Tower' has been done by L&T.
Apart from this building, Parsvnath is also constructing a commercial building at KG Marg near CP in Delhi with a leasable area of 1.3 lakh sq ft, of which 40,000 sq ft will be retail and the rest will be office space. It had acquired 1.18 acre of commercial plot at KG Marg in 2008 for Rs 212 crore.
The national capital-based Parsvnath is meanwhile selling its non-core land parcels to cut debt and complete construction of its ongoing projects.
The company, which has a debt of about Rs 1,200 crore, is developing about 50 projects covering 80 million sq ft.
Earlier this month, it has divested 140 acres in Sohna, Gurgaon to Supertech to Rs 665 crore.
That apart, the company is looking for outright sale of various land parcels in South-West India or joint venture partners for development of these lands, which are estimated to be worth about Rs 1,000 crore.
In the company's annual report, Jain told shareholders that the company has laid out a clear set of priorities for the next 12-24 months to improve profitability.
"The strategic focus is on assessing and evaluating our assets, business and markets, and accordingly sell non-core assets that are not aligned with our core business in terms of development potential.
"We are also working towards asset monetisation by raising long-term capital to reduce the debt," he added.