Real Estate Asset Divestment: Easy Means To cut off debt

Most often MNCs divest their real estate assets to overcome their financial crises. This phenomenon is not confined to Indian Corporates alone.

Whenever any MNCs are loaded with debt it seeks to repair with divesting some real estate assets. They may face debt due to sluggish market or economic recession.

Rising debt has been a serious issue for many of the Indian Corporates and MNCs. Many are forced to divest their real estate assets. They are sure of overcoming the debt if the property is in any prime area. Some of them lease out their properties or resort to other monetization methods.

High interest rates do not permit the corporates to rely on loans. It is a bigger problem for them. In fact they are asked to fund them from some other means or ways.

Indian corporates need money firstly to cut off their debt. Secondly they need it consolidate their finance. Many of them say divesting real estate assets is the easiest way for them. They are able to raise quicker funds through this. They agree that these are easier than offloading their non-core business.

In fact there is no meaning in blocking assets worth millions just for the sake of preserving a property. On the other hand they can raise sufficient fund for their business -expansion. There is always a higher demand for Real estate properties. This is not the same with other forms of possessions.

Remember the struggle of Vijay Mallya to find a taker for his debt-loaded Kingfisher Airlines. Meanwhile there were many takers for his real estate assets. MTNL will lease its properties located in Delhi and Mumbai.

Besides government firms, private firms like Gammon India and Citi Bank also have plans to monetize their real estate properties. They all point to the lack of sufficient PE (private equity) funds and higher interest rates as causes of this situation. Meanwhile it has to be noted that these firms amass real estate properties when they have a good-go.

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