The debt-laden Lanco Group is in advanced stages of talks with southern builder DivyaSree Developers to sell its commercial office space business in a deal for Rs 1,000 cr.
The property on the block is Lanco Hills Technology Park, which has a planned development of 7.8 mln sqft special economic zone and non-SEZ office spaces at Manikonda in Hyderabad. The group flagship Lanco Infratech, with Rs 43,000 cr debt, is among the 12 companies named by the RBI for auction under the recently enacted Insolvency and Bankruptcy Code.
The 50 acre office zone, a part of the ambitious integrated township Lanco Hills, is still in the early stages of development with just over half a mln sqft space leased currently. Apart from DivyaSree, K Raheja Corp and Canada’s Brookfield Asset Management have also explored a deal with Lanco Hills.
DivyaSree currently has a leased portfolio of about 8 mln sqft which includes tenants such as US bank Wells Fargo, fund manager Invesco and technology giant Google.
Lanco had launched the office zone claiming to make it the country’s tallest skyline and corporate hub. However, the group’s deteriorating debt profile and a gloomy infra sector scenario pushed back the real estate development plans significantly.
When fully built, Lanco Hills offices would be capable of accommodating 75,000 people with 12,000-car park facility. Hyderabad is fast emerging as a new investment destination for office space developers at a time when the city’s real estate market is on a revival mode after almost half a decade of political turmoil.