Top property developers such as Godrej Properties and Oberoi Realty are seeing a surge in takeover proposals for commercial properties from distressed developers.
So far, there were opportunities in stalled residential projects for top developers like Godrej Properties.
"We are getting a lot of proposals for office projects. We are well placed to use the opportunities. We will process them from our fund management arm, " said Pirojsha Godrej, chairman of Godrej Properties. Godrej group has a fund management arm called Godrej Fund Management which invests in residential and commercial projects.
Godrej Fund Management last year raised Rs 3,200 crore for its commercial property fund and roped in Allianz Real Estate as an investor.
"Godrej Properties is seeing reasonable valuation from its partners in joint development (JD) or joint venture proposals," Godrej said in a recent call.
"Oberoi Realty is also getting a lot of proposals and they are at an evaluation stage," said Vikas Oberoi, chairman of the company.
Oberoi Realty is looking to build a portfolio of residential, office and mall properties in NCR and Bengaluru, apart from its mainstay of Mumbai.
Oberoi recently said that the company wanted to be a serious office property developer after its office lease deal with global investor Morgan Stanley. The company recently concluded the deal of leasing 1.1 million sq. ft. with Morgan Stanley at its Commerz-III building, making it one of the largest office space transactions.
Shobhit Agarwal, managing director of Anarock Capital, a real estate focused investment banking firm, said, "I am not surprised if top developers are seeing a surge in such proposals. Many developers are distressed and they need funds to do business and repay loans," he said.
Not only developers, even fund managers are seeing a spurt in takeover proposals for commercial properties.
Mumbai-based Nisus Finance is curating a portfolio of commercial properties and has received about 8 take over proposals since April, said its managing director Amit Goenka.
“There is a pressure on rents. Lease rent discounting (LRD) loans need refinancing. A large pipeline of such properties have come to us in April and May,” said Goenka.
Meanwhile, the action in stressed residential real estate is already hotting up.
Last year, the government set up a Rs 25,000 fund to fund stalled projects . According to estimates, over 500,000 apartments in 1,509 projects are in stalled projects.
Last month, Finance Minister Nirmala Sitharaman said that SWAMIAH fund of SBICap Ventures had approved Rs 8,767 crore for 81 stressed projects.