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Future Capital puts former HQ on the block eyes Rs 130 cr

Raghavendra Kamath/Mumbai 17 Jun 12 | 12:46 AM
Related to : Capital First Ltd
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After a recent deal with Warburg Pincus, the private equity major, Future Capital Holdings (FCH), the financial services firm cofounded by Kishore Biyani’s Future Group, is selling its erstwhile headquarters, FCH House, in Lower Parel.

FCH is looking to sell a ground plus two structure, with a 44,000 sq ft area, for Rs 27,500 a sq ft. The sale value could be around Rs 130 crore, given the buyer would have to pay for a third of the 11,000 sq ft terrace, too. The property is located in Peninsula Corporate Park and Future Group bought it in 2007.

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Although Future Capital started functioning from FCH House, it later moved to another building in the Santacruz area, after Kishore Biyani split with another promoter, Sameer Sain. FCH operates from Indiabulls Financial Centre in Elphinstone, where it has 30,000 sq ft of leased space.

When asked, a company spokesperson said: “Since the property is owned by us and not being used, the company has decided to sell the property and release capital." Company sources added the proposed sale had nothing to do with Future Group’s deleveraging plans.

On June 4, FCH announced that Pantaloon Retail and its unit, Future Value Retail, were selling a 53.7 per cent stake in FCH to Warbug Pincus in a deal valued at around Rs 560 crore or Rs 162 a share. The deal involved equity infusion of Rs 100 crore by Warbug.

Property consultants said FCH’s expectations were on the higher side, given market prices, but sources said the valuations were based on the premium nature of the property and "campus-like environment".

“Currently, office properties are commanding a price of Rs 17,000 to 18,000 a sq ft in Lower Parel, while Peninsula Corporate Park commands 10 per cent more. Those who need aboutique, standalone property might go for this (FCH) property. But it is unlikely that it will fetch more than Rs 20,000 asq ft," said Raja Seetharaman, managing director at Aperon Realty-TCN Worldwide, a property consultant

Recently, textile company Alok Industries sold eight out of 20 floors, nearly 252,000 sq ft of space in Peninsula Business Park, for Rs 425 crore or Rs 17,000 a sq ft. Steel and energy major JSW Group has put two of its office properties in Mumbai on the block, where it is expecting Rs 100 crore.

On the whole, Mumbai’s office transactions dropped 31 per cent in area terms in 2011, compared to 2010. Total area leased for office space fell from six million sq ft in 2010 to 5.5 million sq ft in 2011.

Office properties are commanding a price of Rs 17,000-18,000 a sq ft in Lower Parel.

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