"This deal marks Piramal's exit in the project. SNC has now taken over the project and plans to invest over Rs 100 crore to develop a world class office space on the land," JLL India Managing Director, Bengaluru Rahul Arora told PTI.
The deal is expected to yield an IRR (internal rate of return) of 18-19 per cent for Piramal, he added.
The development comes within five months of Piramal Fund Management seeking an extension from investors for exiting its investment made through this fund.
Indiareit Fund V, which was launched in 2013 with a primary tenure of six years (extendable by up to two additional one-year periods), had made 10 investments and has already exited completely from four of them and partial exit from one project.
Since the six-year tenure of the fund ended in July last year, Piramal had sought an extension of one year from August 1, 2019 to July 31, 2020 for exiting from its residual investments.
While seeking the extension, Piramal had noted that it had recommended Skylark to develop a commercial project with the existing FSI (floor space index), instead of a residential project, to ensure faster cash flow realisation.
Since Skylark was facing group-level liquidity issues, it was unable to raise construction finance for the commercial project.
"Considering the delays in project approvals, continued uncertainty in TDR (transferable development rights) regulations, group level cash flow stress and residual tenure of the Fund, we are now exploring to sell the project land," Piramal Fund Management had said in its note.
Arora further said that the central business district (CBD) of Bengaluru continues to be highly vibrant in terms of commercial potential.
"Commercial space absorption in the CBD as well as the broader Bengaluru market has scaled new records in the recent past. There has been a rise in investor interest in acquiring prime commercial land parcels and this development is significant," he added.
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