May 07 2019

Economic Times: Nitesh plans sale of four residential assets (30/04/19)

Bengaluru: Bengaluru-based real estate firm Nitesh EstatesNSE -1.87 % is in talks to sell four of its residential assets in the city to pare debt by Rs 350 crore, and the plan is to halve its entire debt burden by end-2019, the company’s top executive told ET.

“We are looking at completely exiting our residential business post finishing our existing seven projects. We are also converting some of the existing residential projects into commercial,” said managing director Nitesh Shetty. Earlier this year, Nitesh brought down its debt by Rs 450 crore after it sold land in the city and exited a joint venture mall project with Goldman Sachs.

The residential business has a debt of Rs 800 crore out of its current total debt of Rs 1,000 crore. Nitesh has identified plots totalling 35 acres in Bengaluru and Kochi that it will exit to retire debt.

The real estate firm has been struggling to make headway as sales of residential units fell, with banks and funding agencies tightening the noose due to the crisis in the non-banking sector and a general slowdown in sales of residential units across cities.

The company plans to focus on its commercial assets, including warehouses and data centres. “We are in the process of forming a holding company structure under which all other businesses including commercial, restaurant and data centres will come. The idea is to monetise them at a later stage,” said Shetty, adding Nitesh Estates would become a holding company.

The company has a pipeline of more than 3 million sq ft of commercial office space in the approval and construction stages right now and is trying to add 3 million sq ft more once debt issues are resolved. “We are in the process of creating a Rs 1,000 crore commercial platform and talking to investors,” Shetty said.

Nitesh Estates is also strengthening its leadership team as it looks to deleverage its balance sheet and enter newer businesses. The firm has appointed Rakesh Singh, the former chief operating officer of Manipal Hospitals, as its chief executive officer, and Kamal Daluka, who earlier worked with the Adani Group, Reliance Jio and Godrej Properties as its chief financial officer.