PER SQUARE FEET
  • DEBT AVAILABLE
  • TENANTED
40,392 SF
Sarjapur ORR, Bangalore
  • MIN INVESTMENT
  • NO OF INVESTORS
  • RENTAL YIELD
  • RETURN TARGET
  • 28.2%
  • 73
Of ₹ 22,70,00,000 Property Value
  • There is an opportunity to purchase a 40,392 square feet commercial office space in Embassy Tech Square within the Cessna Business Park on Sarjapur Outer Ring Road, Bangalore for an all-in cost of Rs. 39,00,00,000 (Rs. 9,655 per sf) which implies a 7.6% yield.

    Located within the Cessna Business Park which houses the HQs of CISCO and offices of LG, InMobi, Flipkart and Akamai, Embassy Tech Square is a 1.2 million sf Grade A office development by the Embassy Group comprising four towers, of which Property Share is planning to acquire a floor in the Delta tower. Sarjapur ORR is the largest office market in Bangalore with less than 2% vacancy (40 million sf, 35% of total Bangalore market) with offices of JP Morgan, CISCO, Accenture, Cognizant, Wipro, Oracle, Intel, Honeywell, SAP, HSBC, KPMG, ADOBE, Sony, Goldman Sachs, Flipkart  among others.

    Property Share’s unit is leased to US based Syniverse, a $2.6 billion telecom technology company headquartered out of Florida and owned by private equity major, The Carlye Group. Syniverse is paying a rent of Rs. 52.9 psf which is 25% below market rent (Rs. 70 psf) due to which the Seller is selling the floor at Rs. 8,853 psf which is 20% below market rate (Rs. 11,000 psf).

    This is a leveraged opportunity. There is in-place debt from HDFC for 42% of the purchase price which magnifies returns and reduces tax leakage due to interest offset.

     

    • ATTRACTIVE PRICE Per square foot
    • HIGH RENTAL YIELD on All-in Price
    • ESCALATION every 3 years
    • LEVERAGED In-place debt from HDFC
    • 100%
      INVESTMENT AMOUNT
    • 52%
      RENTS
    • 2%
      INTEREST ON DEPOSIT
    • 36%
      PROFIT
    • 190%
      TOTAL
    Return Target : 18.4%
  • ₹ 39,00,00,000
    • purchase price
    • stamp duty
    • registration
    • brokerage
    • legal fee
    • cess
    • reserve
    • purchase price
    • stamp duty
    • registration
    • brokerage
    • legal fee
    • cess
    • reserve
    All in price

Sarjapur ORR is the largest office market in Bangalore with less than 2% vacancy (40 million sf, 35% of total Bangalore market) with offices of JP Morgan, CISCO, Accenture, Cognizant, Wipro, Oracle, Intel, Honeywell, SAP, HSBC, KPMG, ADOBE, Sony, Goldman Sachs, Flipkart  among others.

Well laid out floor divisible into 4 separate office with lifts in the middle and bathrooms in the four corners.

  • ₹ 39,00,00,000
    • purchase price
    • stamp duty
    • registration
    • brokerage
    • legal fee
    • cess
    • reserve
    • purchase price
    • stamp duty
    • registration
    • brokerage
    • legal fee
    • cess
    • reserve
    All in price
  • ₹22,70,737
    GROSS RENT
  • ₹68,162
    property tax
  • ₹2,97,992
    property management fee
  • ₹19,04,583
    net rent
Annual Yield : 7.30%
  • 31 Dec 2013
  • 3 YEARS
  • 30 Dec 2028
  • 40,392 SF
  • ₹ 53
  • 15 YEARS
  • 15%

TENANT DETAILS

Name: Syniverse Technologies Inc

Country: Florida, US

Office Locations: Various

Description: Syniverse technologies is a US based telecom technology and research firm owned by private equity giant The Carlyle group. It employs around 23,000+ employees. It had a market capitalisation of approximately $2.6 billion as of 1st Oct 2017.

  • ₹ 9,655 per square feet for a Grade A completed rented office building in Sarjapur ORR
  • 7.6% rental yield 
  • 15% escalation every 3 years
  • Tenanted to US based Syniverse Technologies Inc
  • Market cap $2.6 billion
  • Located in Sarjapur, Bangalore's largest office market
  • Part of a campus with MNC tenants like CISCO, LG, Akamai, Fidelity among others
  • At a 10% CAGR on exit, the returns are 18.4% IRR and 1.9x
  • 7.6% rental yield which increases to 8.3% in Year 3 due to contractual escalation
5%
15%
  • PROFIT AMOUNT
  • SALE PRICE PSF
  • MOIC
  • IRR
DAY 0 Year 1 Year 2 Year 3 Year 4
investment ( ₹ 22,70,00,000 )
rents 2,72,48,844 2,72,48,844 3,13,36,171 3,13,36,171
interest on deposit 10,41,133 10,41,133 10,41,133 10,41,133
Management fee ( 39,00,000 ) ( 39,00,000 ) ( 39,00,000 ) ( 39,00,000 )
Income tax ( 16,33,406 ) ( 16,33,406 ) ( 24,91,745 ) ( 24,91,745 )
Capital gains tax ( 1,19,57,711 )
Interest on debt ( 1,46,70,000 ) ( 1,46,70,000 ) ( 1,46,70,000 ) ( 1,46,70,000 )
Debt reapyment ( 16,30,00,000 )
sale value 57,09,99,000
TOTAL ( ₹ 22,70,00,000 ) ₹ 80,86,571 ₹ 80,86,571 ₹ 1,13,15,559 ₹ 40,73,56,848
  • Property Share's detailed investment note

  • Detailed Report on the Tilte Diliegence of the property by Amarchand Mangaldas.

     

Picture

Hand shake on the price

05-Oct-2017