German agrochemical major Bayer Group is in advance talks with Hiranandani Group to sell its current headquarters, Bayer House, in Hiranandani Gardens, Powai.
Located a stone's throw from the Colgate headquarters, the six-storey building's sale, to be finalized soon, is estimated to fetch Bayer over Rs 90 crore. Property consultants said the deal between Bayer and Hiranandani over Bayer House, which is spread over 65,000 sq ft, is logical and on lines of its costcutting exercise.
Bayer recently entered into an agreement with the realty group to buy a 1.6 lakh sq-ft office building in Thane's Hiranandani Estate, a mixed-use project, for Rs 125 crore. The eight-storey building, which will be ready in 2014, is going to be Bayer's new corporate headquarters. The group, which comprises Bayer Pharmaceuticals and Bayer MaterialSciences, has offices in Thane while its headquarters is in Powai. The company now intends to bring its various functions to one location.
Niranjanan Hiranandani, co-founder and managing director of Hiranandani Group, confirmed the purchase of 1.6 lakh sq-ft office space by Bayer in Thane, but refused to comment on the Powai deal. A senior Bayer official said the company was open to leasing or selling the Powai building for the right price.
Bayer moved into the Powai office in 1995 after spending Rs 30 crore on it, including the cost of land, building and fixtures. Prior to that, the group occupied two floors in Express Towers in south Mumbai.
Sources said Bayer found that maintaining the Powai building was "not the cheapest" proposition. Moreover, some functions like human resources and procurement were located in Thane, making co-ordination difficult and time-consuming . The company had sought to sell the building in 2002 as well but the group's initial expectations were not met.
The Bayer Group is restructuring its operations across the world which includes divestment of non-core businesses like household insecticides, flavours and fragrances and the acquisition and integration of focus businesses like crop science. In India, the group's activities include healthcare, agricultural products, polymers and chemicals. Its cost-cutting drive has led it to offer a voluntary retirement scheme to hundreds of employees in Thane and Powai.
Bayer has already entered into an agreement to sell 108 acres of its factory land and buildings on Kolshet Road in Thane to Kalpataru Group for Rs 1,250 crore.