HUL May Partner a Developer

Sources said HUL could look at partnering with a developer. The company is understood to have held talks with international developers such as Ascendas and Tishmen Speyer, which is in India through a JV with ICICI. Ascendas has developed a few IT parks in this part of the world.

This is not the first time HUL is looking to partner with builders to develop properties. In 1998, the firm had signed an agreement with Tata Housing to develop some land into commercial and residential properties.

HUL wants a centralized business plan for its prime real estate properties across the country. The value of the Book field’s real estate, which was acquired as part of the Brllke Bond deal, was around Rs 60-70 per sq ft in the ‘90s, according to real estate observers. It is now almost Rs 3,000 per sq ft.

While smaller IT companies may move into SEZs as tenants, the bigger ones would look at co-developing SEZs, with Infy and Wipro already showing the way. It is estimated that 5-6 IT SEZs are under development across several micro markets in Bangalore. But this may be insufficient for a city that houses about 3,000 companies, with almost three applications coming in every week for new companies. The city has about 6 lakh employees working in the IT/ITeS sector.

The Bangalore facility was home to many of HUL’s food brands, such as Brooke Bond and Lipton. The Brooke Bond office- is located in the IT heartland, where land prices have seen significant traction over the years.

HUL mandated Chuhman Wakefield to offload the 28-acre property just ahead of a downswing in real estate prices in Bangalore’s IT hub spread across the Whitefield – Book field micro markets. The process, however, attracted several leading developers and corporate houses like Reliance, which put in a Rs 384-crore bid for the property with a plan to develop it into a backend operations centre/employee training hub for its retail operations. Other bidders included Brigade Group, Nitesh Estates and Oberoi Constructions.

HUL’s asking price of Rs 18-20 crore per acre was viewed as too steep by several developers, especially at a time when prices were softening. The bidders who remained in the race were asked if they would revise the quoted prices before HUL decided to call off plans for an outright sale. The Book field’s property came into the HLL fold following the acquisition of Brooke Bond in 1984 by Unilever in a global deal. The massive property was set up in 1983, when tea Major Brooke Bond moved its headquarters from Kolkata to Bangalore.

The company is currently consolidating its operations under one roof after ending its decades-old system of two power centers-home and personal care in Mumbai and foods in Bangalore.


Courtesy: ET dtd. 31-03-08