ICICI puts Rs 200 cr realty on sale

ICICI Bank is selling a clutch of commercial and residential properties. The space, totalling 1.39 lakh sq ft, is spread across Mumbai, starting with a 6,800 sq ft commercial space in Apeejay House, Fort.

Brokers value the total property at over Rs 200 crore. The biggest chunk is the 65,845 sq ft ‘A’ wing building of Mafatlal Chambers at N M Joshi Marg in Lower Parel.

Another 31,773 sq ft in the basement and third floor of the ‘B’ wing of the same building has also been put on the block.

Also for sale are 32 residential flats in Sundaram-I, Raheja Complex in Malad East, totalling 26,660 sq ft built-up area.

ICICI confirmed the properties were being sold by them. “Among the commercial properties — Apeejay House, Mafatlal Chambers (Wing A & B) and Laxmi Towers (Gala 5 and Gala 2) are currently occupied. The Borivali West property Abhilasha is vacant,” a bank spokesperson said via email.

The bank had earlier sold 10,000 sq ft of office space in Laxmi Towers at Rs 21,000 per sq ft to Federal Bank in March, broking sources said.

The bank is selling 2,275 sq ft plus basement of 485 sq ft in Borivali. A spokesperson from the bank said the sale of commercial properties has been planned to achieve “operational efficiencies.”

“There will be no retrenchment of staff. They would be relocated. The residential property Sundaram, Malad (32 flats) has been vacant for the last 2 years,” the spokesperson said, replying to a questionnaire by email.

The spokesperson said commercial space in Apeejay House was being sold because they had office space in the same area after taking over Sangli Bank in late 2006.

“The time taken for completion of the sale process will depend on the market opportunity,” the spokesperson said.

Sources said the bank has also moved or is in the process of moving people from departments as a part of this ‘rationalisation’ strategy.

The bank has been under pressure to get its house in order after poor results recently. In the quarter ended March, the bank’s profit fell 35% to Rs 744 crore from Rs 1,150 crore in the same period last year.

Analysts said ICICI Bank’s efforts to rationalise costs will bear fruits in the next one year, and will probably help the lender get back on track.

Vaibhav Agarwal, vice-president of banking research at Angel Broking, said that though a few hundred crores extra from selling this property may not have a sizeable impact on the bank’s profits, the steps taken together with these sales are already showing results.

“They have taken a number of steps like restructuring departments, workforce and land. They are also planning to hive off ATMs, brought the investment banking division back into the bank, have changed reporting standards and have avoided high-risk lending. So there has been this comprehensive rationalisation, results from which will be seen in the next one or one-and-a-half years,” he said.

Agarwal said this rationalisation will help ICICI to add more branches till March 2010 without increasing operational costs. The bank has 1,438 branches and is in the process of opening 580 branches till March 2010.