On Tuesday, India’s largest privately-held owner and operator of real assets, RMZ Corp, announced that it has completed the sale of 18 percent, or 12.8 million square feet, of its real estate assets portfolio to Canada’s Brookfield Asset Management. At $2 billion, the transaction marks the largest-ever private market deal in the Indian real estate industry, the proceeds of which will be put toward growing RMZ’s real assets portfolio to a value of $15 Billion and a footprint of 87 million square feet, from a current $10 Billion and 67 million square feet over the next six years.
“The deal between RMZ Corp and Brookfield marks our most important milestones for the year—conversion to a ‘debt-free’ firm. At RMZ, we look forward to enhancing our hypergrowth strategy,” RMZ corporate chairman Manoj Menda said in an official announcement.
The transacted portfolio has assets in Bangalore, Chennai, Pune and as well as the group’s shared office space firm CoWrks. Central to the transaction is RMZ’s single largest asset, RMZ Ecoworld, a 14 million square foot office development, located in the Outer Ring Road, a business development (or “micromarket”) that runs along the perimeter of Bangalore.
RMZ Ecoworld’s client base includes both SEZ (special economic zone) and non-SEZ offices. Brookfield will acquire 6.7 million square feet as part of this transaction.
FDI billions
While the Brookfield deal is the largest single transaction on the Indian real estate market, Indian properties have attracted more than $15 billion in foreign investment since 2011 according to research from global real estate consultancy Knight Frank.
RMZ, which is owned by the Menda family, has previously drawn foreign direct investment from institutional investors and created profitable exits for them. In 2013, Qatar Investment Authority (QIA) invested $300 million in RMZ. In 2018, they exited at $1.2 billion.
In 2019, RMZ Corp entered a joint venture with Japan’s Mitsui Fudosan, a leading global real estate developer, for $1 billion to jointly develop assets in India. The first joint property development a 3.5 million square foot development, RMZ Ecoworld 30, in Bangalore.
“Our development pipeline delivers best-in-class assets in major markets. By adapting to the digital way of life, building integrated communities, and defining new benchmarks, we are here to transform the way we work,” Menda added.
Menda’s strategic philosophy centers on ownership of a real asset throughout its development life cycle. From single properties to urban mixed developments, RMZ’s next-phase growth strategy, “RMZ 2.0,” aims to reimagine places with a focus on people, shaping the future of work by introducing new sustainability, technology and well-being solutions to the built environment.
RMZ owns the largest LEED Arc (rating for sustainable construction) portfolio in India. In August, RMZ Corp became first company globally to achieve the IWBI “Well Health-Safety Rating” for Facility Operations and Management, an evidence-based, third-party verified rating measuring its efforts to support the health and safety of people in the fight against COVID-19.
Earlier this year, RMZ Corp worked with Otis Worldwide Corporation on the integration of Otis’s eCall smartphone app, enabling sanitary, touch-less elevator service, elevator passenger capacity limits, and managed shuttling to promote social distancing and improve the safe flow of tenants at its RMZ Infinity corporate development.
Finally, RMZ Corp is also among the few zero-debt global real estate companies. After 18 years in business, today the company serves more than 200 enterprise customers in six Indian cities, managing a $10 billion real assets portfolio spanning 67 million square feet.
