Debt-laden Reliance Communications (RCom) has started to evaluate options to monetise its corporate office in the heart of New Delhi. Sources with knowledge of the development told FE that while the company is looking at both sale and lease options, an outright sale could fetch the company around Rs650-Rs800 crore for the office building of close to 3.19 lakh square feet space. The office is located in central New Delhi area on the Maharaja Ranjit Singh Marg. At this value, the capital values for the building would work out to be around Rs20,000-Rs25,000 per square feet. It is noteworthy that the capital values in the tony Connaught Place, which is a stone’s throw distance from the Reliance property commands between Rs40,000 and Rs45,000 per square feet. According to people familiar with the property, the fact that it is vacant at the moment and the location for it is not proper Connaught Place impacts its capital values.
“The capital values are also a function of the rents that a building has been commanding and the capital yields thereon, as the building is currently vacant, the valuation will have to be discounted for that. Also, there is hardly any liquidity with the prospective buyers, so expecting too much in this market would also be a challenge,” said one of the sources. While there have been no benchmark sales in the near past for making a comparison, the rents in an operational office building—Red Fort Capital Parsvnath Towers in Gole Market range between Rs250-Rs275 per square feet, said a property consultant. RCom declined to comment on the real estate monetisation. Earlier this month, Anil Ambani, chairman, RCom had outlined a few measures including sale of some of its prime real estate assets in Navi Mumbai and New Delhi to bring down its whopping Rs45,000 crore of debt.
You May Also Like To Watch:
In Navi Mumbai, the company holds Dhirubhai Ambani Knowledge City (DAKC), a technology park spread over 133-acres located on Thane-Belapur road in Navi Mumbai. It is considering sale/co-development of the Navi Mumbai property as well. Some estimates suggest the Navi Mumbai property could be valued at around Rs8,000-10,000 crore. Sale / co-development of the two properties is likely to be completed by December 2017. Property consultants JLL India has been mandated to manage the monetisation of these properties. Earlier this month, a consortium of lenders had given a breather to the loss-making telcos by providing seven months time to pare debt and service loans regularly. The company had reported a net loss of Rs948 crore in Q4FY17.