MUMBAI: Realtor Nirmal Lifestyle Developers is in talks with Godrej Properties and Piramal Realty separately to enter into a joint development agreement for a 26-acre land parcel in Mumbai’s North central suburb of Mulund, said two persons familiar with the development.
The land parcel on LBS Marg in Mulund is estimated to have a development potential of nearly 3 million sq ft. “All possible options to monetise the company’s land parcels are being explored right now. However, the developer is keen on a joint development pact as it would help the company get future revenues too apart from an upfront payment,“ said one of the persons mentioned above.
Recently , the Debt Recovery Tribunal directed the developer to not sell any of its properties and Nirmal Lifestyles was asked to disclose all movable and immovable assets in response a petition filed by IDBI Trusteeship Services. The tribunal also restrained Dharmesh Jain, the promoter, from selling any of his personal assets.
The objective behind the proposed transaction is to support a part repayment of the com pany’s debt currently at more than `1,100 crore with an annual cost of debt of about 14%. The developer had acquired the land parcel in Mulund (west) from another Mumbai-based realty developer in 2005.
“Given the sluggish property market and developers’ increasing preference towards joint developments as against outright acquisition of land parcels, the company is considering this as the most feasible option that can fetch response,“ said the person mentioned earlier. ET’s email queries to Nirmal Lifestyle Developers and Piramal Realty remained unanswered till the time of going to press. Godrej Properties declined to offer comment for the story.
As part of the proposed transaction the partner is expected to pay about `400-500 crore as an upfront deposit to Nirmal Lifestyle Developers.In the proposed space-sharing, Nirmal Lifestyle will come in as a land lord and the project will be executed by the partner. The ratio in which developed space will be shared between both the partners will be dictated by the upfront payment to be made by the incoming partner.