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In one of the biggest deals in office realty in recent times, US-based industrial engine maker Cummins bought its India office campus building in Pune from Panchshil Realty.
According to sources close to the development, the deal is valued at about ₹750 crore for approximately seven lakh square feet spread over two office towers in Balewadi, Pune.
Developed on a built-to-suit basis, the campus is expected to house about 5,000 employees.
While Panchshil Realty declined to comment, an email sent to Cummins India also went unanswered.
However, a person privy to the development said: “The idea behind the deal is to consolidate Cummins’ various offices in Pune under one roof as well as plan its future growth as the new campus provides the necessary scalability potential.”
While employees have moved into the first building, the second building is expected to become operational by August-September, he added.
The deal marks a significant milestone for Pune-based Panchshil Realty.
The company, which offers premium residential and office space, recently acquired the landmark Express Tower building in Nariman Point in Mumbai for about ₹900 crore after partnering with US-based PE giant Blackstone.
It is also building Donald Trump’s first luxury residential project in India called Trump Towers in Pune.
Cummins’ global head and Chairman and CEO Tom Linebarger is expected to come down soon from the US for the official announcement of the deal.
Cummins’ presence in India started with a joint venture incorporated in 1962, after which it set up a plant in Pune that began manufacturing engines in early 1964.
In 1997, Cummins Inc. increased its stake in its Indian arm to 51 per cent making the joint venture a consolidated subsidiary of Cummins Inc.
According to the company website, eight legal entities of the Group represent all of the Cummins global business units in India. The Group is present in 200 locations in the country and employs over 14,500.
The investment in its India office campus comes at a difficult time the company. Its net sales for the third quarter ended December 2013 slid seven per cent at ₹1001 crore against ₹1,071 crore in the year-ago period. Net profit too saw a decline of 37 per cent to ₹147 crore in Q3 of FY 14 against ₹234 crore in the year ago period.
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