Brookfield leads the race to acquire IL&FS Mumbai headquarters

Brookfield Asset Management IL&FS has emerged as the front-runner to acquire the coveted 4.5 lakh sq. ft. headquarter at Bandra Kurla Complex in Mumbai. While some others, including private equity firms and real estate companies, had shown interest, none matched Brookfield’s bid.

The IL&FS board has put the group’s corporate headquarters as part of the resolution process to address the debt of Rs 99,000 crore. Constructed in 2005, the 11-story building was one of the first to be built in the business district. The IL&FS board is seeking to recover Rs 1,000 crore from the sale of assets. However, sources say Brookfield’s bid is slightly lower.

While the target price is in line with the current value of the office complex in the district, the private equity firm has said that the property is around 17 years old and would require additional investment for modernization and renovation. Also, IL&FS has said that it will continue to occupy certain floors for the time being as a tenant. When contacted, IL&FS declined to comment on the deal.

The Canadian alternative investment company made headlines last year with a $2 billion real estate deal to acquire 12 million square feet of office space. RMZ Corp. The company later raised Rs 3,800 crore through its real estate investment trust.

Last year, Yes Bank acquired the 6.95 lakh sq. ft. former headquarters of Anil Ambani’s Reliance Group for Rs 1,200 crore. However, no money changed as the purchase was adjusted against the loan due from the group company.

Earlier, another private equity company Black Stone and Godrej Properties had shown interest in office property. While the IL&FS building is only 11 story’s higher, whereas, the real estate development of BKC’s G-Block has many more floors as relaxation in norms has allowed higher floor space index for offices that use IT.