17 Acres Of Mumbai Plots Were Sold By Dlf To Lodha For Rs 2700 Cr.

In the biggest realty deal in the country this year

, DLF on Monday proclaimed sale of seventeen acres of prime land in Mumbai to Lodha Developers for Rs 2700 crore, almost four times the value it had in 2005. Largest real estate company of India, DLF had bought the land from National Textile Corporation for Rs 703 crore. It determined to sell this piece of land as a part of the strategy to exit from non-core business.In a statement, DLF mentioned that the corporate has sold-out the whole stake in its arm Jwala Real Estate, that owns this land at Worli in Mumbai, for an enterprise price of about Rs 2700 crore. Separately, Lodha Developers mentioned it's entered into an agreement with DLF to acquire the land.

The acquisition is for a thought of Rs 1200 crore for each equity and debentures of the corporate. Additionally, Lodha is also expected to require over about Rs 1500 crores of liabilities that Jwala has incurred for the development since it purchased the property from NTC in 2005, as said by Mumbai-based Lodha Group. Although DLF has earned Rs 2000 crore profit on this deal, the estimation is lower than the deal of Indiabulls' in year 2010 for the 9 acres of NTC land for Rs 1580 crore.

The acquisition is 3-4 times cheaper than deals recently done by alternative real estate players. At a value of just over Rs 5000 per sq ft, this land acquisition offers Lodha important competitive advantage to create a mixed-use development over five million sq ft at the prime location of Worli. When contacted, DLF Group, Mr. Ashok Tyagi, CFO stated that we have received Rs 500 crore in advance from Lodha. The deal can get completed by the month of October.On valuations, the size of the deal is fair. We've broadly got what we were looking for and added that the funds would be accustomed cut debt that presently stands at Rs 22680 crore. DLF aims to chop debt by Rs 5000 crore this financial year, adding that talks are on for sale of hotel business Amanresorts and wind energy.Lodha mentioned real estate players, as well as Oberoi and Runwal, had conjointly place in their bids to purchase this land. The investment of Rs 2700 crore would be funded through equity and bank loans as said by Lodha Developers MD, Mr. Abhisheck Lodha. When asked whether or not the corporate would rope in private equity players in the deal, Lodha Group mentioned "not sure".

DLF share costs rose by 3.47 % at Rs 218 on the BSE in anticipation of announcement of this deal. DLF has raised nearly Rs 8000 crore from sale of non-core-property (hotel plots and IT SEZs/ Parks) in the previous years. This is the most important and biggest land deal since March 2011 once Wave Infra bought 151 acres of land in Noida for a whopping Rs 6570 crore.For Lodha's, this can be the second high-value land deal in the recent times in the history of property in Mumbai. In 2010, the corporate had bought a 25000 sq m plot at Wadala in Mumbai for Rs 4050 crore, termed as the costliest deal in Mumbai Real Estate. Among other major land deals within the country, BPTP had bagged ninety five acres of land in Noida for Rs 5006 crore through an auction, however the deal fell through because the company was unable to make the total payment.

DLF had bagged a 350-acre plot for Rs 1750 crore in Gurgaon in 2009 and bought 38 acres in the heart of Delhi for Rs 1675 crore in year 2007. Unitech had won 340 acres in Noida for Rs 1582 crore in year 2006. The deal has been stricken at a time once the general real estate market is facing strong times due to economic holdup and high interest rates.Commenting on the deal, Lodha Developers Dept MD Mr. Abhinandan Lodha stated that this could be a distinctive transaction wherever we not just received land, however a current project with all approvals and with construction well progressed. We predict that the acquisition has given us very competitively priced land in the island town.

When contacted, with the property adviser Jones Lang LaSalle India Country Head Mr. Anuj Puri mentioned it's not correct to mention that valuation of deal is lower or cheaper as "there weren't several players to be able to write a cheque of half a billion dollar whether in India or globally to purchase a real estate. Given this state of affairs, it is a great deal for both DLF and Lodha in present market condition.In 2011-12 financial year, Lodha achieved Rs 5000 crore of sales, delivered three million sq ft of space and spent over Rs 1600 crore on construction.

by: proptiger11

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