L&T Realty looks for partners in Bengaluru, Navi Mumbai projects
The firm has a huge development portfolio of about 50 million sq.ft. comprising both ongoing and upcoming projects
Bengaluru: L&T Realty Ltd, the real estate development arm of Larsen and Toubro Ltd, is looking to bring in a development partner and investor in a couple of its projects in Bengaluru and Navi Mumbai as it seeks to monetise its retail mall portfolio and use some of the land to build offices.
The four-year-old firm from the L&T stable may bring in a developer partner in its north Bengaluru project in Hebbal, where it is developing residential apartments on about 45 acres. It plans to bring in a joint venture partner who will develop the remaining 20 acre.
In its upcoming transit-oriented development (TOD) project at Seawoods, Navi Mumbai, built around the railway station of Seawoods — Darave, L&T Realty is looking at a strategic investor in the 1 million sq.ft. of retail development.
The developer also has 4 million sq.ft. of office space coming up there as part of a 40-acre contiguous development under the project Seawoods Grand Central.
Mumbai-based L&T Realty, which has a huge development portfolio of about 50 million sq.ft. comprising both ongoing and upcoming projects, sold its commercial real estate project in Chandigarh to the Carnival Group for Rs.1,785 crore. The project included Elante mall, a Hyatt hotel and office premises with a central courtyard.
“As a policy, we don’t plan to run malls and want to monetise them, though we continue to build them in our projects. In the Hebbal project, we are thinking of bringing in a joint venture partner because our office portfolio is already large and we have big obligations and so we are trying to strike a balance. We are hoping to conclude these transactions next year. In Seawoods, we are talking to investor partners, but we want someone who will be a worthy successor,” said Shrikant Joshi, chief executive, L&T Realty.
With the Chandigarh transaction, L&T Realty also exited its real estate business in northern India and plans to focus on projects in Bengaluru, Mumbai, Navi Mumbai, Chennai and Hyderabad.
For the Hebbal project, L&T Realty is speaking to a few developers such as Assetz Property Group, RMZ Corp. and another large Singapore developer and investor, though these are just early talks, said a person familiar with the development, who didn’t wish to be named.
In 2016, L&T Realty plans to start delivering homes in its project in Powai in suburban Mumbai and complete its Seawoods project. The real estate sector has undergone a number of challenges in the last year, said Joshi, and with customers becoming more discerning, there seems to be a movement towards bigger, branded developers, who are also part of a larger corporate entity.
“Our strategy for next year will be continue building projects we have, selectively look at joint venture partnerships with outstanding partners and to monetise the land that we already have,” Joshi said.
“There are several reasons why larger branded developers such as Godrej Properties have done so well when most others have struggled,” said Shashank Jain, partner, transaction services, at consultancy firm PricewaterhouseCoopers India. “Homebuyers have displayed a lot of faith in the larger brand association of these real estate firms, as well as factors such as delivery capability, brand equity and goodwill they naturally bring.”
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