Bengaluru-based developer Nitesh Estates Ltd on Wednesday said that it has signed agreements to sell and exit two land parcels in the city for Rs227 crore,, which is in line with its plan to monetize assets to pare debt.
Of the Rs227 crore, around Rs152 crore would be used to reduce debt by repaying the lender and the remaining money for repaying the liability towards customer refunds and land owner’s obligations.
The developer is selling one land parcel in Bengaluru’s Old Madras Road, to Pune-based developer Kolte Patil Developers Ltd, for around Rs113 crore and the second parcel in north Bengaluru to another developer, through a consortium of land owners.
Together, both these land assets have a potential of around 2 million sq. ft. of residential development.
Besides these, another Rs200 crore of debt will be reduced by exiting three other luxury residential land parcel, in the next few months, Nitesh Estates said in a stock exchange filing.
In April, the premium residential developer had said that around Rs700 crore of debt would be reduced through asset monetization in the course of the year. Around Rs440 crore was repaid earlier in the year, through the sale of land and a shopping mall.
The overall strategy of the developer is not just towards paring debt but also to eventually exit the residential development business in a phased manner.
In an interview with Mint in April, chairman and managing director Nitesh Shetty had said that from being a B2C or a business-to-customer company, they are moving towards being B2B (business-to-business) company where they don’t own the products.
The residential development business has increasingly become tough for many developers in the country, on the back of tepid homebuyer demand, demand-supply mismatch, overhang of unsold inventory and multiple stumbling blocks in terms of regulatory changes in the last few years.