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Viviana Mall rent monetisation fetches Sheth-GIC entity Rs 600 crore

Holding company of Viviana Mall, jointly owned by Singapore’s sovereign fund GICand real estate developer Sheth Group, has raised .₹600 crore by monetising rental incomes from the Thanebased mall, in the country’s largest lease rental discountingtransaction this year, three persons said. “A substantial part of the funds raised are being utilised to provide an exit to existing financier State Bank of India, while rest of the funds are available for both the equity partners GIC and Sheth Group,” one of them said. Lease rental discounting (LRD) is a financing mechanism under which a term loan is offered against rental receipts derived from lease contracts with corporate tenants. The owner of the property gets debt financing based on the discounted value of the future rentals and the underlying property value. It is usually offered against income-producing commercial assets such as office properties, retail malls and logistic parks. The tenure of the LRD facility that Axis Bank has extended to Viviana Mall is around 12 years, the sources said. The mall, with over 1 million sq ft of leasable space, earns annual rentals of around ₹100 crore. State Bank of India (SBI) had earlier extended LRD financing to this mall a couple of years ago and that was utilised then to support repayment of construction finance availed from Indiabulls Housing Finance. ET’s separate email queries to GIC and SBI remained unanswered as of press time Tuesday. Sheth Group, Axis Bank and Elysium Capital Advisory, which acted as the sole advisor for this LRD transaction, declined to comment for the story. In early 2016, GIC had picked up 49% stake in Viviana Mall from Sheth Group for nearly ₹1,000 crore, valuing the mall at over ₹2,000 crore. Several lenders have been eyeing opportunities in LRD space given that it assures a fixed yield through rentals with minimum risk. Earlier this year, Indiabulls Housing Finance concluded three commercial lease rental discounting transactions worth cumulative ₹1,700 crore. The non-banking finance company lent against two office properties and a retail mall of Mantri Developers. FUND UTILISATION A substantial part of the funds raised are being utilised to provide an exit to existing financier SBI: Sources

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