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Mumbai: A continuing liquidity crisis and slowdown in sales of new homes is forcing some property developers to sell their commercial assets to raise money for financing their incomplete projects. Many of them are also rushing to secure partners and co-investors to fund their ongoing residential projects.

Mumbai-based Rajesh LifeSpaces, which has at least seven incomplete residential projects in the city, is planning to sell its upcoming 316-room five-star hotel along with a commercial office building at suburban Kanjurmarg, two people aware of the development said. According to the first of the two persons, the property is currently up for sale, even though the company had tied up with Singapore-based GHM Hotel to operate the hotel under the ‘The Chedi’ brand. Both persons spoke under the condition of anonymity.

The property is under construction for the past six-seven years. The Chedi website, though, says the hotel is expected to open this year.

“Raising fresh funds has become a big challenge now. Construction pace has gone extremely slow. It’s a tough task to meet the completion deadlines of some of their ongoing projects. They (Rajesh LifeSpaces) are looking for prospective buyers to sell the hotel and an office project to raise funds," said the first person mentioned above. A potential sale could fetch up to 1,400 crore, the second person said.

Emailed queries to Rajesh LifeSpaces remained unanswered.

“There are only two strategies left in this market. One is to divest whatever you can, and what you can’t divest, get into partnership with somebody else because there is no capital available for everybody," said Mohit Saraf, senior partner at L&L Partners, a Mumbai-based law firm. Capital is available only in a few pockets, he added.

Omkar Realtors, which has been looking for joint ventures and partnerships for its ongoing projects, plans to sell its commercial office projects to raise funds. The Mumbai-based builder has also been in talks with some other developers to sell the third tower of its uber-luxury residential project called 1973 at Worli in south Mumbai, said two other people aware of the matter. Faced with slow pace of luxury residential sales, Omkar has even considered converting the tower into a commercial office, they said, on condition of anonymity.

In an emailed response, a spokesperson with Omkar said the company “has plans to raise around 3,000 crore through sale of commercial space while the third tower of 1973 is currently being built as a residential-only."

Mint reported on 6 May that Omkar has signed a pact with Piramal Realty to jointly develop a 2 million sq. ft office complex at Andheri in Mumbai. Last year, Omkar sold its upcoming shopping mall to Virtuous Retail, the retail arm of investment firm Xander.

In the past six months, Radius Developers, another Mumbai-based builder, sold its prime office complex at Bandra Kurla Complex and a software park in Pune.

While US-based private equity firm Blackstone acquired the 22-storey One BKC office complex for around 2,500 crore, Radius sold the Pune-based Radius Tech Park to a private investor for nearly 200 crore. The company is also currently looking for partners to start a residential project ‘Chembur Central’ after a delay of about four years.

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