The Hindu Business Line : LIC scouts for land across country

Buying to develop
LIC wants to develop commercial properties across India.
It did not disclose the size of investment for acquiring new properties.
LIC may also partner with local developers while setting up commercial real estate projects.

Somasroy Chakraborty

Kolkata, Oct. 19

Life Insurance Corporation of India, arguably the second largest property owner in the country after Indian Railways, is scouting for land to develop commercial properties across India.

Recently, the insurance major acquired a five-acre plot in the eastern fringes of Kolkata from Kolkata Municipal Corporation (KMC) for a whopping Rs 276.2 crore.

“We plan to develop the site into a commercial property. It will take a minimum of three to four years for the project to be completed. There could be an IT park and/or offices leased out to corporates. We are yet to decide on that,” Mr A.K. Dasgupta, Managing Director of LIC, told Business Line over phone from Mumbai.

Legal tangles

On why LIC was looking at acquisition of fresh properties while possessing umpteen number of properties in India, Mr Dasgupta said, “we are also looking at redeveloping our existing properties. But there are certain issues relating to tenants and hence we are looking at acquiring new properties.” As known, LIC has been involved in several legal tangles with tenants while trying to redevelop its existing properties.

However, Mr Dasgupta did not disclose the size of investment the company has earmarked for acquiring new properties. According to industry experts, this could well be in the range of a few thousand crore. “Looking at the recent acquisition, the size of investment will not be less than a few thousand crore,” a city-based analyst said on condition of anonymity.

LIC may also partner with local developers while setting up commercial real estate projects. On return on investments, Mr Dasgupta said, “the returns on property quite often are higher than returns from the (stock) market. The Indian real estate is experiencing a boom and we expect significantly higher returns from our property investments.”

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