Britannia to unlock HQ's realty value

Britannia Industries, India's largest biscuits and bakery company, is understood to have finally decided to unlock value at its sprawling headquarters property in this city.

The corporate headquarters, christened Britannia Gardens, sprawls over nearly seven acres on the Old Airport Road, leading on to Whitefield, one of the major technology hubs towards the east of Bengaluru.

According to real estate developers close to Britannia, the going rate for properties at that stretch averages Rs 20 crore per acre, thus valuing the property at Rs 150 crore (Rs 1.5 billion).

It is reliably understood that Britannia, controlled by the Mumbai-based Wadia Group, is not looking to sell the property.

Instead, it will unlock value by turning the asset into a commercial and residential complex.

"If unlocked," notes a real estate analyst, "this property can be developed to derive as much as Rs 800 crore (Rs 8 billion) in value."

Britannia is yet to finalise plans.

Real estate players close to the management confirm the company's decision to move the corporate

head office away from this property.

It will be housed in a new address by April next year.

In 2008, Britannia had come close to exiting this property, but it had to retract as markets went bearish.

Britannia Gardens, in addition to housing the corporate headquarters, has residential units for some senior managers at this lush lung space in one of the most coveted commercial districts of Bangalore.

The company has been aggressively looking at slashing costs as inflation and stiff competition from national and regional players are taking a toll on operating margins.

Britannia has been efficiently creaming away costs and has been able to deliver good numbers during the past quarter, after posting a drop in net profits in the earlier couple of quarters.

The comapny has a debt of Rs 451 crore (Rs 4.51 billion), with a gearing of 0.82 times, and has been investing aggressively in marketing to stay above the clutter.

It reported a topline of Rs 4,200 crore (Rs 42 billion) during last fiscal, and posted a net profit of Rs 35 crore (Rs 350 million) on revenues of Rs 1,294 crore (Rs 12.94 billion) at the end of second quarter of FY12.