Piramal arm ties up with Omkar Realtors for Mumbai project2 min read . Updated: 16 Jan 2018, 02:27 AM IST
Piramal Realty will invest Rs2,600 crore in the 12-acre project and will pay a deposit of Rs400 crore and will have a 60% revenue share in the project
Bengaluru: Piramal Realty, the real estate development arm of Piramal Group, has entered into a development agreement with Omkar Realtors and Developers Pvt. Ltd for a 12-acre project in Mahalaxmi, a prime location in Mumbai.
Piramal Realty intends to invest Rs2,600 crore in this development. It will pay a deposit of Rs400 crore and will have a 60% revenue share in the project.
According to the agreement, Piramal Realty will lead design, development, construction, sales and marketing of the project. With over 2 million sq. ft of development, this will be one of the largest premium residential projects in south Mumbai. The developer plans to build high-rise residential towers on the plot.
“Reforms such as RERA, GST, demonetization are driving consolidation in the real estate industry. This is a great time for institutionalized players with a strong track record and robust balance sheet to grow and expand their footprint," said Anand Piramal, founder, Piramal Realty.
Launched in 2012, Piramal Realty is led by Ajay Piramal’s son Anand. The firm is backed by private equity firm Warburg Pincus and investment bank Goldman Sachs Group Inc., which invested Rs1,800 crore and Rs900 crore, respectively, in 2015.
Joint development agreements have been a lifeline for mid-sized developers, who are unable to develop certain projects on their own due to a liquidity crunch, owing to a prolonged slowdown in the sector. Such pacts with larger realty firms allow them to monetize their land holdings and pare debt.
Last year, Piramal Realty bought a 3.2-acre land from Mumbai-based developer Nirmal Lifestyle Ltd for Rs153 crore. Developers such as Nirmal, which have the land but are unable to develop them on their own, have been looking for partners to monetise such assets.
Nirmal formed a joint venture with Godrej Properties Ltd to develop a residential project in suburban Thane, near Mumbai, in 2017, and also signed a joint development agreement with L&T Realty Ltd for another project in suburban Mumbai’s Mulund.
Gaurav Gupta, director, Omkar, said, “Our association with Piramal Group dates back to 2010 with the Group funding many of our projects. The current transaction with Piramal Realty will strengthen our relationship and we are excited to partner with them to deliver an excellent value proposition for all our stakeholders."
Primarily a developer of premium residential projects in Mumbai, last year Piramal Realty said it would invest Rs2,400 crore in its first commercial project, a 16-acre corporate park coming up at Kurla in Mumbai. The firm has also been looking to buy land in the Mumbai Metropolitan Region to expand its commercial real estate business.