InvestorQ : Why is RMZ of Bengaluru selling a chunk of its realty assets to Brookfield?
Arti Chavan made post

Why is RMZ of Bengaluru selling a chunk of its realty assets to Brookfield?

Rutuja Nigam answered.
10 months ago

One of the largest real estate developers in the Southern region, RMZ Corporation, will be selling a significant stake in its assets to Brookfield of Canada. Brookfield, it may be recollected is already an active investor in the Indian markets.

As part of the deal, Brookfield of Canada will buy 18% assets in the assets of Bengaluru based RMZ Corporation for a consideration of approximately $2 billion. RMZ is one of the leading real estate developers in Bengaluru and Chennai regions.

However, the company has been grappling with a huge debt burden of Rs.12,500 crore and that has put a spoke in the wheel of the future growth of the company. RMZ will be selling the stake in its commercial property portfolio to Brookfield to tide over this debt crisis.

RMZ’s property portfolio is currently spread across Bengaluru and Chennai and on the completion of the asset sale deal it will make RMZ into a zero-debt company. In fact, RMZ will end up being the only large real estate company that is fully debt free.

The intent of this move is to bankroll the future growth of. Currently, RMZ has a commercial real estate portfolio of 67 million SFT spread across South India and it will sell 12.5 million SFT to Brookfield. RMZ plans to grow its commercial portfolio to 85 million SFT by 2025.