Bengaluru: Property developer Nirmal has raised Rs570 crore of debt financing from L&T Finance Holdings Ltd and signed a joint development agreement with L&T Realty Ltd for a residential project in suburban Mumbai.
The joint development agreement (JDA) was signed on Tuesday. Nirmal, which owns the land in suburban Mulund, has brought in L&T Realty to develop the residential project.
Nirmal has raised the debt from L&T Finance to repay Rs400 crore to Kotak Realty Fund, part of the Kotak Mahindra Group, which is exiting the project. The balance will be used for project construction.
L&T Realty will also invest around Rs200 crore to procure approvals for the project and start construction. The project, which has around three million sq. ft of saleable area, will be launched by January 2018.
“With this launch, L&T Realty would be developing close to 15 million sq. ft of residential space within Mumbai alone. The proposed development of over 3 million sq. ft comprising over 2,000 apartments will be developed in phases spanning seven to eight years and has an estimated project revenue of close to Rs5,000 crore," said Shrikant Joshi, chief executive, L&T Realty.
An L&T Finance spokesperson didn’t immediately respond to an email query.
In July, realty firm BPTP Ltd raised around Rs190 crore from L&T Finance to complete two residential projects in Faridabad.
Mint reported on 11 March that Nirmal and L&T Realty were close to signing an agreement to develop this land parcel.
A number of mid-sized developers such as Nirmal, which builds malls and corporate offices apart from residential projects, has been in talks with larger developers to strike development agreements, to monetize land parcels and reduce debt. In certain cases, developers have also sold their land.
“It’s a great opportunity for us to partner with a developer like L&T Realty as it adds tremendous value not only to the project but also Mulund as a property market. I will continue to develop projects on my own but whenever we feel there is an opportunity to bring in a partner, we will do so," Nirmal chairman and managing director Dharmesh Jain said over the phone.