The Housing Development Finance Corporation (HDFC) has said it will buy Hindustan Unilever’s (HUL) erstwhile headquarters at Backbay Reclamation in Churchgate. Earlier in April, the housing finance giant had entered into a lease agreement for the property. Although the value of the deal has not been disclosed, real estate experts say it could be around Rs 350-400 crore.
HDFC began its operations in a modest office in Ramon House in 1977 and has gradually occupied the whole building. The corporation, however, has chosen to retain the old name as its chairman Deepak Parekh believes that the premises have brought good luck to the company. As a result, HDFC has been the only financial sector giant without its own marquee building even as its subsidiary, HDFC Bank, built its own building in Lower Parel in central Mumbai.
Announcing this at the corporation’s annual general meeting, Deepak Parekh, HDFC chairman, said, “We had earlier taken the building on lease for three years. We have now decided that we are going to buy this building and we will probably name it HDFC House. But Ramon House will continue to retain its name.” He said that the new occupants of the building will include some of HDFC’s subsidiaries such as HDFC Mutual Fund, which is presently housed in a rented office next door, and HDFC Ergo General Insurance, which operates from Andheri.
According to Parekh, there was a glut in the commercial real estate market that included information technology parks, office complexes, retail establishments and units in Special Economic Zones. However, there continued to be good growth in residential real estate in tier II and tier III cities. “These are places where houses are available for Rs 2,000 to Rs 3,000 a square foot. Some of the big builders are moving into these locations and building large townships. That is providing us with a lending opportunity,” said Parekh.
HUL had quit its Churchgate premises, where it was headquartered for five decades, in January 2010 and moved into a 12.5-acre campus constructed at the site of its former manufacturing plant in Andheri. Besides consolidating its offices in one location the FMCG giant had also been shedding its real estate assets. HUL had sought to sell its headquarters to multinational banks but most of them had scaled down their Indian operations in the wake of the global financial crisis. Larger multinational banks such as Citi and Stanchart had already made investments in the Bandra-Kurla Complex.
Via : TOI