Alok Inds’ arm to sell Mumbai office building

Alok Industries Ltd. | Textile | Textiles & Apparels | BSE: 521070 | NSE: ALOKINDS

27 Sep 2011 Evaluate

Alok Realtors, an arm of Alok Industries, is trying to dispose of, even at a loss, a commercial building it had bought in Lower Parel four years ago. Alok Realtors had bought the property from Peninsula Land for Rs 1,075 crore in 2007, in the middle of the property boom. The development shows that real estate valuations are falling to new lows in India’s biggest real estate market, Mumbai. The company has decided to exit the real estate business.

The group currently has a debt of Rs 10,685 crore. The group has already announced its decision to exit the realty business completely, given the rising debt on Alok’s balance sheet. Eighty per cent of the building’s space is marked out for use by information technology and IT-enabled services, while the remaining space is meant for commercial usage. By March end, the company looks to raise up to Rs 1,300 crore through the sale of realty assets, including 500 acres at Silvasa, the 641,000-sq ft Tower B at Peninsula Business Park and five floors spread over 37,500 sq ft at another commercial building Ashford Center at Lower Parel. Of the total eight floors, the company will retain three, four floors are up for sale and the company has already sold one floor spread over 7,500 sq ft at Rs 22,500 per sq ft.