Brookfield eyes RMZ Corp's assets worth Rs 12,000 crore across Chennai, Bengaluru

BENGALURU | MUMBAI: Brookfield Asset Management is in advanced talks with Bengaluru-based RMZ Corp to acquire 13.5 million square feet of its ready and income-producing commercial property for Rs 12,000 crore ($1.6 billion), said three people with direct knowledge of the matter. Brookfield plans to buy these assets in cities including Bengaluru, Chennai and Gurgaon, in what would be one of the largest commercial realty deals in India. RMZ's assets in Mumbai, Pune and Hyderabad are not part of the transaction.
"Both entities are re-looking at the assets to be transferred under this deal as the developer is keen to retain some of its flagship projects including RMZ Ecospace. The deal is expected to conclude by October end," said one person.

RMZ may use the proceeds of the transaction to reduce some of its debt of Rs 13,500 crore and invest in expansion. The company plans to become a zero-debt entity in the near term, the people said. ET's email query to RMZ remained unanswered, while Brookfield Asset Management declined to comment.

Assets to be bundled with proposed REIT
The Canadian alternative asset manager has about $550 billion of assets under management. RMZ has 21 million sq. ft. of built assets and 42 million sq. ft. of projects under construction and being acquired across India.

"RMZ plans to speed up the process of acquisition and have a portfolio of 85 million sq. ft. of office space by 2025," said one person.

The developer put off a plan to float a real estate investment trust after buying back a 45% stake held by the Qatar Investment Authority and Barings Private Equity Partners for about $1 billion in 2018.

RMZ is one of the largest owners of office property in India and completed leasing deals totalling 2.4 million sq. ft. with global entities including Walmart and Accenture in the past six months.

Brookfield will decide about adding part of this portfolio to its proposed REIT later. ET reported earlier that the fund plans to raise $500 million to $700 million by listing a REIT in India before the end of this financial year.

The assets to be bundled with its proposed REIT, size, percentage of dilution and other factors are being worked out. Brookfield already owns and operates infrastructure and real estate assets in India, including 22 million sq. ft. of office property.