Bangalore: Piramal Sunteck Realty Pvt. Ltd, which has not yet fully paid for the two plots it bought at Mumbai’s Bandra-Kurla complex (BKC) business district, has started selling luxury homes in one of them.
The joint venture between Ajay Piramal-promoted Piramal Enterprises Ltd and Mumbai developer Sunteck Realty Ltd began selling the apartments after it got a year’s extension—until March 2011—to make the balance payment.
So far, it has paid about half the price of Rs496 crore for the two plots, said Kamal Khetan, managing director of Sunteck Realty. Now, Piramal Sunteck has to pay a 14% interest on the balance amount.
Realty firms, among the hardest hit by last year’s slowdown and squeezed for funds, have been keen to begin selling their projects with the economy set to recover.
Piramal Sunteck had bought the two plots in BKC in a 2008 auction by the Mumbai Metropolitan Region Development Authority (MMRDA) at nearly Rs3.5 lakh per sq. m.—which remains one of the most expensive land auctions till date.
MMRDA had earlier set a November 2009 deadline for the firm to make the full payment.
“This is the first time we (have) granted a year’s extension in response to a bidder’s request. Earlier, we have granted short-term extensions of three months,” said Dilip Kawathkar, spokesperson of MMRDA.
Jet Airways (India) Ltd, the country’s largest private airline by passengers carried, had bought a plot in the same auction for Rs826 crore. It, too, has not paid MMRDA in full.
“Jet has plans to develop commercial office space in the plot and has also asked for an extension. But the request is under process and we haven’t granted it yet,” said Kawathkar.
Jet Airways didn’t reply to an email query sent on Monday.
The luxe homes at Piramal Sunteck’s Signia Isles in BKC cost Rs13-14 crore, at Rs17,500 per sq. ft, and are being sold to select investors and private buyers by invitation. The firm is spending about Rs4,000 per sq. ft in construction alone.
Piramal Sunteck has already sold about 40% of the 70 apartments in the project, which would be ready for occupation in about two-and-a-half years.
Piramal Sunteck’s second plot in BKC is also reserved for residences, as per MMRDA’s building norms. Work is yet to start on it.
Sunteck Realty, which raised Rs158 crore through a qualified institutional placement in 2009, also received a Rs105 crore investment from Kotak Realty Fund for the Signia Isles project.
Piramal Sunteck’s other, more expensive project under development is also the first residential construction in BKC. Apartments in Signature Island are being sold for around Rs25 crore (at Rs33,000 a sq. ft) to rich individuals, again by invitation. It has sold 30 of the 70 apartments in the project, each measuring 7,000-11,000 sq. ft.
Sunteck currently has about 23.6 million sq. ft of saleable area, of which 69% is for residences. The company is also looking at more big-ticket acquisitions.
“We are looking to acquire two-three big properties with clear title(s) in south Mumbai,” said Khetan.