L&T Realty, the property development arm of engineering major Larsen & Toubro, and Valour Estate, formerly DB Realty. Have signed a binding agreement to jointly develop a Rs 8,500-crore project on a 7.5-acre land parcel at Bandra Reclamation in Mumbai’s Bandra west locality, according to sources.
As per this agreement, the companies are planning to develop a nearly 1.6 million sq ft premium residential project on the plot.
In 2013, Valor Estate’s subsidiary Goregaon Hotel & Realty Pvt Ltd (GHRPL) had entered into an agreement with a consortium led by a hydro-mechanical engineering services company Om Metals to develop this project.
Om Metals Consortium had secured the approval to develop this project from the Maharashtra Housing and Area Development Authority in 2006.
As part of the agreement.L&T Realty, which signed the agreement last month, will retain 80% of the revenue and share 20% with Valor Estate. If the project’s average sale rate is up to Rs 55,000 per sq ft of RERA carpet area.
“Valor Estate’s revenue share may increase with an upside in the project’s realization price above this mark. If the average price is above Rs 80,000 per sq ft. Valor’s revenue share will increase to 27%,” said one of the persons mentioned above.
L&T Realty Development For Future
L&T Realty is expected to provide Valor Estate with a developed area of 2.75 lakh sq ft. Additionally, Valor plans to retain this space as a luxury hotel with around 200 keys.
Valor Estate is in advanced talks with an international hotel brand for a 20-year operating agreement for the luxury hotel. This will be the second luxury hotel in Bandra west after the Taj Lands End.
“GHRPL is expected to comply with certain condition precedents and satisfy. L&T Realty with respect to a few factors within 180 days from the entering of this binding agreement,” said another person quoted above.
Valor Estate is responsible for vacating the land and obtaining the necessary approvals, which they plan to complete within the next 12-18 months. They will also provide rehabilitation for 1,050 tenements by 2027-28.
“We are unable to provide a comment or further information at this time,” L&T Realty said in a response to ET’s email query. Mail sent to Valor Estate remained unanswered until the time of going to press.
This is the second such agreement L&T Realty has entered into with Valor Estate. Both parties have signed a contractual settlement to collectively. Construct a assignment worth more than Rs 20,000 crore on a ten-acre plot of land in Mumbai’s Bandra-Kurla Complex (BKC). The land parcel is located next to the upcoming Bombay High Court complex.
The company has been working on its growth strategy through these alliances to monetize its key land parcels for the last couple of years. It has so far entered such partnerships with realty developers. Including Prestige Estates Projects, Adani Realty, Godrej Properties, RMZ Corp etc to develop projects. Its prime land parcels across Mumbai.
L&T Realty also recently entered into an agreement to jointly develop a 12.2-acre land parcel in Thane’s Panchpakhadi locality. The project, involving rehabilitation of a large layout of slums, has development potential of more than 3.12 million sq ft.
Real estate projects involving joint development and redevelopment play a crucial role in the functionality of most property markets. This importance is heightened in the context of rising land prices. The decreasing availability of vacant land parcels in major urban centres.
