Britannia Industries, the Wadia family-promoted FMCG major, has put its 8.6 acre industrial property in Chennai on the block.

The company plans to sell the prime land, estimated to be worth between Rs 120 crore and Rs 172 crore, on an as-is-where-is-basis at its location on the Chennai Thiruvallur High (CTH) Road, suburban Padi, Chennai.

The property comprises a frontage of approximately 200 metres on CTH Road and includes land as well as factory and office buildings.

Currently, it houses Britannia’s administrative regional offices.

“It did not make sense to keep an 8.6-acre area to run offices of just about 100 people. So, we decided to sell the property. The offices would, however, not be relocated as of now,” said a company official, speaking on condition of anonymity.

According to real estate consultants, Britannia is likely to expect a realisation of Rs 150 crore to Rs 215 crore from the property sale.

Developing properties

Sanjay Dutt, Executive ED, South Asia, Cushman and Wakefield, said: “Britannia is also developing properties at Bombay Textile Mills in Worli and Sewri mills in Wadala.”

“The sale is part of an increasing trend of corporates unlocking value in their realty assets over the last two years. This has become the only way they can keep their balance sheets intact and shareholders happy at a time when margins are running tight,” he added.

According to Badal Yagnik, MD, Jones Lang Lasalle, Chennai, Padi is a promising area for development as it is close to an industrial area in Chennai.

“Increasingly more corporates in Chennai are monetising the land as its value has increased in recent times,” he added.

Recent examples of this trend include Hindustan Teleprinters Ltd, which garnered Rs 270 crore from the sale of a 10-acre property in Guindy, while Tata Communication realised Rs 200 crore from the sale of 1.5 acres of land with buildings in the Nungambakkam area.

“Valuation of industrial land on the outskirts, however, differs depending on the change of land use from the time of its original allotment,” said Yagnik.

FMCG Analyst Priya Ranjan, Macquarie Securities, said: “The sale of Britannia’s industrial land in Chennai is unrelated to any financial distress situation. It is more a case of monetising idle real estate assets which would otherwise be resting unproductively on its books.”

When contacted, a Britannia spokesperson said: “The company has advertised and is awaiting a suitable response."

manisha.jha@thehindu.co.in