SoBo's Express Tower finally finds a buyer; deal likely for Rs 900 cr

American private equity fund Blackstone along with Pune-based Panchshil Realty is all set to buy out the current owners of Express Towers, one of South Mumbai's iconic sea-facing building in Nariman Point, for a whopping Rs 900 crore, The Economic Times reported today.

The deal has been in the works for a while but was stuck due to differences of opinion over valuation as the building's current owners- Vivek Goenka, chairman and managing director of the Indian Express Group, and private equity firm ICICI Venture (which has 49% stake in the property) - had expected the sale to fetch Rs 1,000 crore.

According to the ET report, the deal includes 3,84,000 square feet of the total leasable area of 4,00,000 square feet but excludes the top-floor penthouse of Vivek Goenka as well as restaurants owned by the Goenka family. Even the Indian Express Group is likely to retain some office space.

 SoBos Express Tower finally finds a buyer; deal likely for Rs 900 cr

Deal sealed

ICICI IVenture (I-Ven) had initiated the process to sell Express Tower in February 2013. It hired real estate advisor Jones Lang LaSalle to search for a buyer for its minority stake. ICICI Venture had bought a 49 percent stake in the 25-storey building in 2008 for about Rs 350 crore, while the remaining stake is held by Indian Express'sGoenka. Some small-scale investors also hold shares, but very minimal. The project was built nearly four decades ago.Now as per the current deal, both ICICI Venture and Goenka will give up control.

Blackstone has beensteadily acquiring commercial projects in India in the last few years. It bought the DLF-Ackruti IT park in Pune, a special purpose vehicle of Embassy, among others, while Panchshil is looking to expand its commercial portfolio.

Blackstone already has its India head office located on the fifth floor of Express Towers. The building's better known tenants include McKinsey & Company, Blackstone Group, Ernst & Young and Warburg Pincus besides the Indian Express Limited. However, over the last couple of years, Nariman Point has lost its sheen as the most desirablebusiness centrewith rising vacancy levels due to companies preferring to move their offices to other locations like Bandra-Kurla Complex, Lower Parel and Andheri. Rentals have also fallen here from over Rs 300 per sq ft a month in early 2011 to around Rs 250 now.

According to the recent CBRE Global Research and Consulting's semi-annual Prime Office Occupancy Costs survey, Mumbai's Bandra Kurla Complex (BKC) pipped Nariman Point as India's second-most expensive office space.With little or no takers for office space in the country's first planned central business district, Nariman Point dropped to the 26th position at $90 per square feet per annum in CBRE's list of world's 50 most expensive office markets. BKC retained its ranking at the 11th position.

The Express Tower was commissioned by Ramnath Goenka, founder of Indian Express Limited. Upon completion in 1972, the 105 metres tall building managed to retain the tallest building title in Sourth Asia for about two years, after which it was surpassed by Oberoi Trident Towers that measures 117 metres.

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

Updated Date: Dec 21, 2014 00:08:31 IST