What does Brookfield plan to do with the IL&FS Towers in Mumbai?

It does look like a significant conclusion to the IL&FS imbroglio after the company went bust in 2018. It was one of the first cases of NBFC that was referred to the NCLT by the RBI for resolution. Accordingly, a fresh board under Uday Kotak was constituted to manage the process of resolution of the debt. Finally, around 62% of the total debt of Rs.98,000 crore was resolved, so effectively the haircut would still be a tad under 40% for lenders.

The last part of the resolution deal was the sale of the iconic headquarters of the beleaguered IL&FS group located at Bandra Kurla Complex. This tower was almost synonymous with the growth of BKC over the last 25 years. The tower was sold to Brookfield of Canada for a total consideration of Rs.1,080 crore. It may be recollected that IL&FS had occupied the top 3 floors of IL&FS Towers while the rest of the space was leased out.

The IL&FS Towers in BKC has a total leasable area of 4.5 lakh SFT. The IL&FS building sits on land admeasuring 12,550 square metres. However, the building and its facilities are already 22 years old and would require substantial refurbishing and maintenance to bring it to global standards that Brookfield would typically expect. The median rentals in the area range from Rs.265 per SFT to Rs.325 per SFT. Incidentally, Brookfield India also has an NSE listed REITS portfolio, and this may be a valuable addition to the REITS too.