Mumbai: Mumbai-based real estate firm Kalpataru Ltd has entered into a joint development agreement with pipe manufacturer Indian Hume Pipe Co. Ltd, to develop a 15-acre land parcel for a residential project in suburban Pune.
In a BSE filing, Indian Hume Pipe said it has signed a Memorandum of Understanding (MoU) with Kalpataru Gardens, a subsidiary of Kalpataru, with respect to developing the company’s land at Vadgaon, Pune.
“The Company (Indian Hume) has given power of attorney to the developer for obtaining approvals, sanctions, permissions, NOC’s relating to the development of the above project," Indian Hume said.
Kalpataru will have 66% of the revenue from the project while the rest will go to Indian Hume Pipe, which will bear the conversion charges from industrial to residential use. Kalpataru will bear and pay all construction, development, marketing and selling costs and other project related costs.
“There used to be an old factory of Indian Hume Pipe on the plot. The transaction is part of the company’s land monetizing plan," a person saware of the development said. The land parcel has a potential to develop around 1.2 million sq ft of residential space, the person said.
Property consultant JLL India is the transaction advisor to the deal.
“Kalpataru group has a track record for delivery. I believe how the market is evolving, large sized joint development transactions will consolidate with top institutionalised developers in most cities," said Nishant Kabra, director and head - land and development services (West India), JLL India.
As the real estate sector gets into a consolidation phase, several developers are opting for joint developments with landlords rather than shelling out large sums of money for outright purchase.
In the recent past several large developers like Godrej Properties and Shapoorji Pallonji Real estate have signed joint development agreements either with landlords or with smaller builders who own large land parcels.
Shares of Indian Hume Pipe closed at ₹ 291.20, up 3.23% from the previous close, while the Sensex was down 1.22% at 37,922.17 points.