Oberoi Realty inks joint development pact for 18.3-acre land in Thane
Listed real estate developer Oberoi Realty has entered into an agreement to jointly develop an over 4 million sq ft residential project on an 18.3-acre land parcel in Thane’s Kolshet locality, said people with direct knowledge of the development.The company has formed a revenue-share alliance with the landowner, who will receive 23% of net realizations as part of deal compensation. The developer has also paid Rs 50 crore to the land owner as an upfront adjustable and refundable deposit while executing the agreement."The land owner has already secured approval for development on the plot. This will be only a residential development and an altered plan may be chalked out and submitted to the authorities soon," said one of the people mentioned above.The land parcel was originally owned by Nicholas Piramal and was sold by the pharmaceutical company in 2002. The latest agreement for the joint development values the land parcel at Rs 404.5 crore, showed the documents accessed through CRE Matrix, a real estate data analytics firm.The project, with a total development potential of 4 million sq ft, is expected to generate revenue of Rs 5,000 crore based on the current residential property rates in the vicinity.Oberoi Realty had recently acquired an industrial land parcel in Bhandup, a suburb of Mumbai, from the Debt Recovery Tribunal (DRT) for Rs 115 crore.Transactions for land parcels have started to gather momentum again with many deals including outright acquisitions and joint ventures in key property markets of Mumbai, Pune, Chennai, Hyderabad, and Bengaluru, either being closed or expected to close this year. The increased demand for land parcels is driven by the sustained recovery in the housing market and buoyed warehousing and data center space.In the backdrop of increasing preference for alliances and joint development of land holdings, this will be one of the few instances of an outright purchase in recent times. Several real estate developers have reworked their business strategies in recent years to focus on asset-light models, such as joint development, to reduce upfront capital costs and deal with liquidity pressure.Over the last few years, Mumbai’s central suburbs and neighboring Thane’s micro-markets have emerged as new hotspots for residential developments. Several real estate developers have either acquired land parcels on an outright basis or have entered into agreements to jointly develop plots in this pocket.Recently, realty developer Runwal Group acquired an over 20-acre land parcel in Thane’s Ghodbunder locality from a chemical company, PB Global, for around Rs 471 crore.Last year, billionaire investor and founder of DMart, Radhakishan Damani, acquired an 8-acre land parcel in Thane from Mondelez India, formerly Cadbury India, for nearly Rs 250 crore.In 2019, Singapore-based global investment firm Xander Group’s retail arm, Virtuous Retail South Asia (VRSA), acquired about 20 acres in Thane from textile firm Raymond for over Rs 710 crore. Prior to that, Godrej Properties had also acquired a 4-acre parcel on Ghodbunder Road to develop a residential project.
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