The Tata Group is looking at monetising income-producing assets worth Rs 800-1,000 crore of two companies as it restructures its infrastructure and real estate businesses, said two people with direct knowledge of the development.
Tata Sons recently announced the reorganisation of the infrastructure and real estate businesses led by Tata Realty & Infrastructure and Tata Housing Development Company in a bid to simplify structures and leverage synergies. The parent company has roped in consultants to assess properties including income-producing assets across the country to be monetised.
Tata Realty & Infrastructure develops projects including roads and bridges, apart from commercial and retail properties, while Tata Housing is in the residential space.
The reorganised business will include infrastructure and urban solutions in the charge of Sanjay Ubale and commercial and residential real estate headed by newly appointed managing director Sanjay Dutt, who will also lead the integrated management of both companies.
“A new special purpose vehicle will be formed to house such assets and this entity will directly engage in negotiations to monetise them. In the first phase, around Rs 250-300 crore worth of properties are likely to be monetised,” said one person.
Email queries to Tata Realty & Infrastructure and Tata Housing remained unanswered at the time of going to press.
According to the plan, the company is considering two options to monetise such identified properties. It may look at listing a public real estate investment trust(REIT) or a private REIT in which an institutional investor may acquire a strategic stake. A REIT is an entity that owns, operates or finances income-producing real estate.
Tata Housing is a closely held public limited company and a subsidiary of Tata Sons, which holds 99.9% of its equity share capital. The company has a diversified portfolio of more than 70 million sq. ft. under various stages of development in addition to a pipeline of projects of over 19 million sq. ft. across key cities.
It has ventured into foreign markets such as the Maldives and is exploring others such as Sri Lanka and South Asian countries.