Infrastructure firm Lanco Group has decided to exit its real estate investments to refocus on its core business.
“Lanco wants to focus on infrastructure business and is not looking to make fresh investment in real estate. It is also looking to close a joint development deal with DivyaSree Developers to complete its last project,” said two people aware of the development.
The infrastructure firm is in talks with Bengaluru-headquartered DivyaSree Developers to jointly construct a 7.8-mn-sft special economic zone and non-SEZ office space – Lanco Hills Technology Park in Hyderabad. This will be Lanco’s last real estate project.
“Lanco Hills offices can accommodate 75,000 people,” said another person. The Hyderabad-based group Lanco Infratech is one of the 12 companies named by Reserve Bank of India under the recently enacted Insolvency and Bankruptcy Code. It has Rs 43,000-crore debt.
“The focus is to see how Lanco can turn around the infrastructure business by defocussing on non-core business,” said one of the person. DivyaSree and Lanco could not be reached for comment. Lanco’s deteriorating debt profile and a slowdown in infrastrucure sector pushed back the real estate development plans significantly for the company. Hyderabad office market is seeing increasing interest from corporates.
According to Cushman and Wakefield, the city recorded 1.8 mn sft of office absorption in Q2 of 2017 as compared to 1.7 mn sft in Q2 of 2016.