Renewable energy solutions provider Suzlon Energy has entered into a property sale and leaseback transaction for its headquarters, One Earth, in Pune as part of its non-core asset monetisation plan.
The company has sold the property for Rs 440 crore to OE Business Park Pvt Ltd (OEBPPL), a special purpose vehicle, shares of which are held by funds managed by 360 ONE Alternates Asset Management.
Following the sale transaction, the company has leased its own headquarters back for a tenure of up to five years with sub-leasing and licensing rights. This is one of the first sale and leaseback transactions of any headquarters in India.
The divestment deal is part of the company’s broader growth strategy of turning asset-light and unlocking capital for growth to fund execution of its expanding orderbook with internal resources.
This sale and leaseback arrangement is not expected to impact Suzlon’s operations, and the company has the flexibility to optimize lease costs by sub-leasing or licensing part of the property, said Himanshu Mody, CFO, Suzlon Group.
“This move of monetizing our non-core assets has been part of Suzlon’s long-term strategy for the past few years. We have the largest orderbook of nearly 4 GW and growing, by unlocking capital from non-core assets, we can concentrate and reinvest more in our core business,” Mody told ET. “Now that we are debt-free, we are committed to taking strategic decisions that are conducive to our growth and serve our commitment to create sustainable value for our stakeholders.”
Under the terms of the agreement, Suzlon will continue to occupy the property as a lessee. Suzlon has also entered into an option agreement to buy the shares and securities of OEBPPL at a future date.
Sale and leaseback deals are a strategic financial transaction in which a company sells its owned property to a buyer, typically a real estate investor, and simultaneously leases it back from the new owner.
This arrangement allows the company to unlock capital tied up in real estate assets without disrupting its operations, as it continues to occupy and use the property under the lease terms.
The funds generated from such transactions can be used for various purposes, including reducing debt, financing expansion, or reinvesting in core business activities. By converting illiquid assets into liquid capital, companies can enhance their financial flexibility and support growth initiatives while maintaining operational continuity.
