Asia’s prominent business space solutions provider, Ascendas, has emerged as a key contender for the acquisition of a 6.18-acre plot in Chennai, aiming to develop a commercial space.
The site, located at Nandambakkam close to the Chennai Trade Centre, is owned by Sravanna Properties, a subsidiary within the TVS group, which is overseen by the Srinivasan brothers—Venu Srinivasan, the Chairman and Managing Director of TVS Motors, and Gopal Srinivasan, the Chairman and Managing Director of the new venture, TVS Capital Funds. Reports indicate that the Singapore-based Ascendas has been shortlisted by TVS, alongside notable competitors—a major retail player, an educational institution, and two entities hailing from Mumbai and northern regions.
To pave the way for the transaction, TVS has entered into a preliminary letter of intent with Ascendas. However, insiders on both sides have opted to refrain from commenting on the specifics.
This deal has been lingering for a significant duration, with TVS hoping for a more favorable valuation for the land, contingent upon the state’s approval of the second master plan for Chennai, which would allow for an increase in the floor space index (FSI).
Market experts have been forecasting a possible relaxation of FSI to 2.5, up from its current threshold of 1.5. In light of this potential change, it is reported that TVS has requested Ascendas to provide two different offers: one based on the existing FSI regulations and another reflecting the anticipated relaxation under the second master plan.
Ascendas is currently conducting due diligence on the parcel of land in question. Sources familiar with the situation have suggested that if the FSI is indeed raised, Sravanna Properties could stand to gain around Rs 220 crore from the transaction.
Sravanna Properties has set an upset price for the property at Rs 35 crore per acre, with expectations to realize a total of Rs 225 crore from the land sale. For context, this site was originally procured by TVS-E in 1999 from ICL Foundries of India Cements for roughly Rs 10 crore.
Additionally, before finalizing the deal, a new lease agreement needs to be established with the Defence authorities to resolve existing pathway issues that have been hindering the progress of this transaction. Currently, the road maintenance is managed by TVS Electronics.
All outstanding matters are anticipated to be resolved shortly, with the deal expected to mature by August.