Wind turbine maker Suzlon Energy, which is implementing a R9,500-crore corporate debt restructuring plan, is looking at monetising its global corporate headquarters in Pune. Suzlon One Earth, a platinum-rated green building that has set a benchmark for corporates in building a green campus, could be harnessed to cut the company?s debt.
According to industry sources, Suzlon is looking at investors who would buy the property and lease it back to the firm. This way, Suzlon will be able to derive the value of the property and also continue to operate from the premises. The new investor could also be leasing space to other companies in addition to Suzlon.
Suzlon Energy has committed to raise $400 million this fiscal and has to do this over the remaining three quarters through the sale on non-core assets. A spokesperson for the company said it had identified 14 to 15 non-core assets for sale, but would not like to comment on any specific plan about the sale of non-core assets. ?The company had in the past discussed plans to monetise non-critical assets, with a goal of raising up to $400 million by the end of this fiscal. We cannot get into specifics for reasons of commercial confidentiality. As a matter of policy, we do not comment on market rumour or speculation,? Suzlon said responding to a query about monetising Suzlon One Earth.
Suzlon One Earth is located in one of the fastest-growing real estate locations in Pune. This is among the largest green buildings in the country. The horizontal campus is built on 10.75 acres with a built-up space of 8 lakh square feet.
The company?s 8,16,000-sq ft headquarter was certified LEED Platinum on March 1, 2010. A portion of the money raised by Suzlon during the 2005 IPO went to fund this campus. Suzlon had spent around Rs 400 crore on the campus to house 2,300 people and the learning centre Suzlon Academy. The campus is known for energy efficiency, water recycling and harvesting, and waste management systems. The Suzlon One Earth campus has 18 windmills generating its own power using a wind-solar hybrid system generating 35 kW of renewable energy, with the rest of the power coming from Suzlon?s off-site wind farms. It uses 100% renewable energy, full-fledged use of LED lighting, sensors to monitor air quality, water haravesting and zero-waste management policy among other things.
According to real estate consultants in the area, the lease rentals in the Hadapsar-Magarpatta area range for Rs 35 to Rs 48 per square ft and capital values range between Rs 4,500 to Rs 6,500 per sq ft.
The Pune office real estate market has performed well this year. According to Cushman & Wakefield, a real estate services firm, Pune has beaten the national trend in office rentals and seen a 37% absorption of office space in H1 2013 over H1 2012. In the first half of 2013, Pune witnessed a net absorption at approximately 1.7 million sq ft and is expected to reach 3-3.4 million sq ft by end of the year.
The was a buzz on asset sale by the Suzlon in the first week of July 2013 but the company had said in a filing to the BSE that the company, as part of its deleveraging strategy, has set the goal to raise up to $400 million through the sale of non-critical assets. ?However, while we have identified these assets and divestment plans are in progress, these are not yet crystallised and it would therefore be premature to announce the specifics,? the company had said.