Bangalore: As central Mumbai’s defunct textile mills make way for skyscrapers and shopping districts, there is still no visible hint of construction at the Mumbai Textile Mill in Parel even three years after DLF Ltd bought the property for Rs702 crore.
Realty bets: A DLF-Akruti project in Andheri, Mumbai. The two firms will do several projects through joint ventures in Mumbai and Pune.
Just across the arterial Senapati Bapat Marg, Indiabulls Real Estate Ltd has begun construction of a 75-storeyed luxury residential tower on the Jupiter Mill property even as the Mumbai Textile Mill project remains on the drawing board. DLF, the country’s largest developer by market value, has now undertaken other projects to continue its growth plan in the financial capital. It has partnered city-based developer Akruti City Ltd for various residential and commercial ventures by forming individual special purpose vehicles (SPV) for each project. Put together, the projects would cost at least Rs10,000 crore.
Delhi-based DLF had earlier partnered Akruti City, a listed company with annual revenues of Rs400 crore and involved in a number of slum redvelopment projects, to bid for the textile mill in 2005 through Jwala Real Estate Pvt. Ltd, a subsidiary of DLF Retail Developers Ltd.
“We have adopted a business model in which DLF and Akruti will do a variety of projects through joint ventures in Mumbai and Pune. The idea, of course, is to do projects that make money and are viable,” said Bharat Mody, chief financial officer of Akruti City. Mody admits that there has been number of changes in design for Mumbai Textile Mill, which has Hafeez Contractor as chief architect. He said, “Initially, we decided to go for a hospitality venture but later settled for commercial and retail space. The final drawings are being finalized.”
Currently, DLF’s Mumbai projects that are under way include a commercial office complex in suburban Andheri (under IRIS-Niharika Shopping Mall JV) and a slum rehabilitation project in Tulsiwadi, near the Mahalaxmi Race Course (under Joyous Housing Ltd). Another prime piece of real estate that DLF is co-developing is an 8-acre, sea-facing mill property in south Mumbai’s Prabhadevi. Chaitra Pvt. Ltd, a joint venture between Akruti and DLF, picked up this property for Rs350 crore last year from the city-based Thackersey family.
DLF has also ventured into the Pune real estate market with Akruti as a partner through DLF Akruti Info Parks (Pune) Ltd, under which it would develop information technology (IT) commercial space.
“We have great understanding with DLF and will be doing many more projects together,” said Hemant Shah, chairman, Akruti City.
Even as DLF has made its debut in Chennai, Kochi, Manesar and Kolkata, its entry into the country’s IT hub Bangalore is still undecided. Hoardings announcing “DLF is coming to Bangalore” have been up for the past several months, but the company’s first residential project on Banerghatta Road appears nowhere near launch. The 80-acre project, which was to be launched in April and has been held up by various government approvals, may see a soft launch towards 2008-end, said a senior DLF officer who looks after its south India operations but is not permitted to be quoted in the media.
DLF’s other big project in Bidadi, on the outskirts of Bangalore, has also faced stumbling blocks. The Rs24,000 crore Bidadi Integrated Township Project (BITP), on 9,170 acres, which was handed over to DLF in October, has been stuck as clarifications have been sought regarding the project agreement and financial clauses pertaining to delay in land acquisition.
“Let’s not forget that DLF is a Gurgaon-based player. Each city has its own set of development control regulations and it’s difficult for an outside developer like DLF to follow the intricacies unless it partners with a local player. Few developers successfully qualify to become a national player in real estate,” said Pranay Vakil, chairman of Knight Frank India, a real estate research and consultancy firm. Vakil said DLF is also exploring other opportunities in Mumbai besides the ones with Akruti. Rajeev Talwar, executive director of DLF, said all recent ventures outside Delhi have been successful and some projects even have waiting lists of buyers.