CHENNAI, APRIL 24: The Xander Group, a multinational investment firm, has bought an IT office building for $40 million (Rs 200 crore) in Chennai.
A press release from Xander said its real estate private equity arm has acquired ‘Futura', a six-acre property, with two buildings totalling 5.70 lakh sq. ft of built-up space.
The property on the Old Mahabalipuram Road to the south of the city was sold by Appaswamy Real Estates, a high-end residential developer.
A real estate expert said the deal indicates the trend in completed and leased out IT properties on the road, popularly known as the IT Corridor. Real estate funds are keen on investing in such income-generating assets as they believe the market conditions are set to improve. Real estate developers prefer to free money locked up in commercial property and invest in more lucrative residential development.
Market estimates indicate that an office building like Futura fetches over Rs 30 a sq ft a month in lease income, about Rs 15 crore annually. This revenue is bound to improve given the current market conditions; there is also the 12-15 per cent escalation clause that kicks in every three years in lease agreements; and capital value is bound to increase.
According to a Xander spokesperson, over 150,000 sq. ft is available for lease at Futura. The IT office building now has high end clients such as Paypal, a subsidiary of eBay, and Gamesa Wind Turbines. Xander will use its international presence to bring in high quality clients to lease out the balance space available there.
The Xander Group has invested in infrastructure, hospitality, retail and real estate sectors. Since 2005 it has invested over $1.8 billion in equity capital in the Indian market.
Source: http://www.thehindubusinessline.com/companies/article3349859.ece
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