In what could be considered as one of the biggest buybacks in the real estate industry, Bangalore based RMZ Corp is set to purchase shares worth $1 billion from its investors; Baring Private Equity Partners and Qatar Investment Authority (QIA).
The move to purchase the shares comes on the heels of rival company, Embassy Group’s attempted bid at the same. While Baring held a 21 per cent stake in the company, QIA’s stake stood at 24 per cent. Baring was keen to sell this stake, with Embassy Group showing interest in the same.
RMZ purchased these shares on the back of offering Baring and QIA returns worth 2.5 to 3 times the investment, as per a report by The Times of India. The deal has resulted in RMZ being valued at just over $2 billion.
Promoted by brothers Raj Menda and Manoj Menda, RMZ has over 24 million square feet of property in its portfolio, encompassing commercial spaces, premium homes, hospitality, and retail. Its assets are valued at $4 billion, with its properties spread across Bangalore, Chennai, New Delhi, Mumbai, and Pune.
Embassy Group, on the other hand, has over 40 million square feet of property in its portfolio. Like RMZ it too focusses on commercial, hospitality, residential, and retail spaces. It has properties in Bangalore, Pune, Coimbatore, and Chennai in India, in addition to spaces in Malaysia and Serbia.
The demand for commercial spaces has gone up in Bangalore, with both RMZ and Embassy eyeing the same. With regards to office space absorption in the Grade-A category, the ‘Garden City’ accounted for 36 per cent market share, double that of Mumbai.
Following the repurchase of shares, RMZ is looking to consolidate its business parks with the ownership lying with the family.