Burman GSC, a joint venture between the Burman Group and Private Equity Fund, Golden State Capital (GSC), has recently bought out the stake of Ascendas India in their SEZ, a joint venture (JV) project, OneHub located in Gurgaon.
Burman GSC and Ascendas earlier had a 49/51 JV partnership for this project. With this transaction, Burman GSC is now 100% owner of the SEZ.
The acquisition was done for an undisclosed amount and requisite approvals have been taken from the Board of Approval for SEZs. Ascendas India has now fully exited the project. Burman GSC has used promoter equity to fund the buyback of the stake in the project. The Gurgaon-based real estate major continues to remain debt free even after funding the purchase.
Burman GSC is now putting a new strategy for the project including complete rebranding and re-positioning of the project. This project, spread across over 62.6 acres of land and surrounded by Aravalli Hills will be targeted towards technology companies. The new and refreshed brand for this project will be known as Gurgaon Technology Valley (GTV) making it the epicenter of technology firms.
“We are very confident about long term potential of the site and have committed capital for development of leased assets for income generation. We plan to develop it as the most preferred destination for Commercial space occupiers in North India. This will be one of the most efficient buildings in India with more than 80% efficient floor layout. We are going to put in place an aggressive pricing strategy, which would be in the sub Rs. 30 (per sq. ft. per month) range making it one of the most economical space for any large global technology firm. Our first block of close to 590,000 Sq. ft., constructed by reputed contractor Shapoorji & Paloonji, has been completed and now ready for fit-outs,” Mr. Mohit Burman, Chairman, Burman GSC said.
Office sector in India has continued to outperform other real estate assets classes, with tenants showing strong and steady demand. In fact, various reports have indicated that demand for Grade A office space is outstripping supply, with many new Indian startups in the tech space, global MNCs, IT and telecom companies expanding operations in India.
GTV is spread over 62.6 acres and is located on main Sohna Road, which is a 4 lane National Highway. The overall development potential of the GTV is 4.8 Mn sq. ft. Phase I of the project with 590,000 sq. ft. of leasable space of the project has already been developed and is being leased out.
As per findings of CBRE’s latest India Office MarketView Report – Q3 2016, demand for prime office space reached a 10-quarter high of approximately 11 million sq. ft. for the July – September period. As on September 30, 2016, overall prime office space absorption across the seven leading cities including Gurgaon was about 28 million sq. ft. for the year. As per the report, Gurgaon continues to dominate office space leasing in the NCR, with demand mainly driven by IT/ITeS, and engineering and manufacturing companies. This is also reflected in the micro market of Sohna Road, where most of the vacant office spaces have been leased out over the past two year.
As per Research & Forecast Report for Gurgaon Office space April 2016 published by Colliers International, occupiers would be consolidating their offices to one location. Major occupiers based in Cyber City and M G Road are evaluating to renew their existing lease or relocating to other inexpensive locations such as Sohna Road and along NH8.
This bodes well for the GTV as the location is unmatched for tenants specially in the IT and ITeS space as rentals for this property have been priced competitively.
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