Brookfield takes over Peninsula Land’s residential project  Distress sale or strategic exit?
Real Estate

Brookfield takes over Peninsula Land’s residential project Distress sale or strategic exit?

In a recent development, global alternative investment manager Brookfield Asset Management has taken over realty developer Peninsula Land’s equity stake in its premium project Salsette 27 in Mumbai’s Byculla locality. As stated in an exchange filing by Peninsula Land Management,this transaction ...

In a recent development, global alternative investment manager Brookfield Asset Management has taken over realty developer Peninsula Land’s equity stake in its premium project Salsette 27 in Mumbai’s Byculla locality. As stated in an exchange filing by Peninsula Land Management,this transaction has resulted in reduction of the company's debt obligations to Brookfield by Rs 5.39 billion. The filing further stated that the remaining non-convertible debentures (NCDs) of Rs 200 million will be repaid to Brookfield from the proceeds of another completed project of the company over the next 18 months. As far as this debt repayment is considered, in 2016, Brookfield had invested Rs 4.50 billion in the project through NCDs, marking its first investment in Indian residential real estate. As a result, the developer’s (Peninsula Land) total debt obligation towards the same stood at Rs 5.59 billion. This is bifurcated as the principal amount standing at Rs 4.50 billion and accrued interest of Rs 1.09 billion. Naturally, the asset being taken over by Brookfield reduces the debt burden of Peninsula. To put the figures in perspective, the company’s debt currently stands around Rs 14 billion.The company is planning to further reduce the debt through sale and monetisation of its investments. The filing also stated that with this transaction the Ashok Piramal Group Company has met its obligations to Brookfield and has separately entered into a service agreement to continue developing and selling the said project for the SPV Goodtime Real Estate. Amid theCOVID-19 pandemic,the luxury real estate segment is getting significantlyaffected with buying decisions getting delayed or avoided. Thus, Peninsula Land being able to get liquidity in uncertain times to meet its debt obligation is a positive step. In 2019,Brookfield surpassed Blackstone to become the largest private investor in India, investing $ 6.28 billion as against $ 2.38 billion by Blackstone. Further, Brookfield is reportedly planning an REIT in the near future and consolidating its position

Next Story
Real Estate

The Only Way is Up!

In 2025, India’s real-estate market will be driven by a confluence of economic, demographic and policy-driven factors. Among these, Boman Irani, President, CREDAI National, counts rapid urbanisation, the rise of the middle class, policy reforms like RERA and GST rationalisation, and the Government’s decision to allow 100 per cent FDI in construction development projects (including townships, housing, built-up infrastructure, and real-estate broking services).In the top metros, especially Bengaluru, followed by Hyderabad and Pune, the key drivers will continue to be job creation a..

Next Story
Building Material

Organisations valuing gender diversity achieve higher profitability

The building materials industry is projected to grow by 8-12 per cent over the next five years. How is Aparna Enterprises positioning itself to leverage this momentum and solidify its market presence?The Indian construction and building materials industry is projected to witness significant expansion, with estimates suggesting an 8-12 per cent compound annual growth rate (CAGR) over the next five years. This growth is fuelled by rapid urbanisation, increased infrastructure investments and sustainability-focused policies. With India's real-estate market expected to reach $ 1 trillion by 2030, t..

Next Story
Real Estate

Dealing with Delays

Delays have beleaguered many a construction project in India, hampering the country from building to its ability and potential, and leading to additional costs incurred by the contractor. The reasons for delayIn India, delays mainly occur owing to obtaining statutory approvals, non-provisioning of right of way, utility diversion and approval of drawings and design. Delays are broadly classified based on responsibility and effect. Excusable delays arise from factors beyond the contractor’s control, such as force majeure events or employer-induced delays. These delays generally entitle th..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?