Citis HQ in maximum city on the block for Rs 250-315 cr

Written by Shubhra Tandon | Mumbai | Updated: Nov 23 2013, 14:17pm hrs
Citigroup buildingCiti has moved its India headquarters to a larger location in First International Finance Centre in Mumbai?s Bandra Kurla Complex.
US multinational financial institution Citigroup has put its old headquarters Citigroup Centre in Mumbais Bandra Kurla Complex (BKC) on the block, say sources in know of the development, reports Shubhra Tandon in Mumbai. This is after Citi moved its India headquarters out of this 80,000-90,000 square feet building earlier this year to a larger location in First International Finance Centre (FIFC), also in BKC. Citi had bought six floors measuring 3.12 lakh sq ft for Rs 985 crore last year, making it the largest commercial deal of the year.

According to market sources, the Citigroup Centre deal would fetch the bank anywhere between Rs 250 crore and Rs 315 crore, at the current capital values for buildings in the heart of BKC ranging from Rs 30,000 to Rs 35,000 per square feet. A spokesperson from Citigroup declined to comment. However, sources in the know of the development say that this was the most obvious move by Citi since it had moved to a new location. The rumours that Citi will ultimately sell Citigroup Centre were rife since last year. This is the most efficient use of capital from an asset which is lying idle, given that it is a bank and not in the business of real estate, said one of the persons FE spoke to. Property consultants CBRE South Asia

is the advisor on the deal. CBRE was the consultant appointed by Citi for its FIFC transaction as well. CBRE did not comment on the latest development.

The sudden spike in activity in Mumbai's commercial real estate market is interesting, given that the market has remained sluggish for the major part of 2013. In the July-September period, for example, Mumbai saw a fall of 50% sequentially in large commercial space leasing and 62% over the January-March period. With most developers still facing a liquidity crunch, completion of commercial spaces has also remained slow.

Among other marquee commercial realty transactions earlier this week, Cadbury House, an iconic south Mumbai landmark, located opposite Mahalaxmi Temple, was bought by diamond merchant Dilipkumar Lakhi for close to Rs 350 crore.

"Most of these buildings that are again in the market or are getting sold (Cadbury House) have been on the block for possibly a year now. While the commercial market in terms of valuations has not changed much, corporates perhaps are feeling that right now they are getting reasonable capital values for these assets and with no signs of market conditions improving for the next two years, this is best time to get these off their books," said a property consultant on condition of anonymity.

According to consultants, the current floor space index in the G- lock of BKC, where Citigroup Centre is located, is 4, but could go up to 8 or 9. The plot, however, can be used for constructing a commercial building only.