K Raheja-GIC close to buying prime Worli land for Rs 600 cr

By | December 12, 2016

Realty developer K Raheja Corp and Singapore’s sovereign wealth fund GIC are close to acquiring a prime three-acre land parcel in Worli in Mumbai from Siemens India for around Rs 600 crore, said three persons familiar with the development.

Following the conclusion of the joint bid , Raheja and GIC are planning to develop a 5 lakh sq ft commercial project at the site.

Two other Mumbai-based realty developers too had bid for the land, but K Raheja-GIC alliance has emerged as the highest bidder, said one of the persons mentioned above. “The deal is in advanced stage and is expected to be inked soon,” he added.

Very little land is available for development in Worli, in the heart of the city, except for some slum redevelopment projects.

Last year, K Raheja Corp had acquired another land parcel spread over 1.4 acres in Worli from HSBC for Rs 230 crore.

Email queries sent to GIC and KRaheja Corp remained unanswered until the time of going to press while Siemens India declined to comment for the story.
“We do not comment on market speculations,” Siemens India said in an email response.

GIC has been investing heavily in Indian real estate over the last few years. It was one of the largest investors in Indian real estate in 2015.

Last year, in one of the largest realty transactions, GIC invested nearly Rs 2,000 crore in two projects of DLF’s subsidiary DLF Home Developers. It also invested $149 million in Sheth Developers’ Viviana mall in Thane, near Mumbai last year.

In 2014, GIC bought BSE-listed Nirlon, which owns an IT park in Mumbai’s Goregaon suburb, for Rs 800 crore. Land transactions have seen a sudden freeze following the demonetisation of high denomination notes.

However, conclusion of deals involving corporate land divestments such as this one is unlikely to be impacted given the institutional and transparent nature of the transactions.

Prices of residential properties in Worli range between Rs 45,000 and Rs 55,000 per sq ft, while ready commercial property is available at Rs 35,000 per sq ft for purchase and a Rs 300 per sq ft on lease, according to property consultants.
Prime corporate office space in Worli is limited and the locality has not seen any major commercial development of late. However, there is robust demand for office space here owing to the presence of several key corporate headquarters in the vicinity.

Aditya Birla Group, Mahindra Group, RPG Group, Credit Suisse, Crompton Greaves, Novartis, Gammon India, Nomura and Axis Bank are some of the major corporates headquartered in Worli.

The last major land transaction in Worli area was concluded in 2012, when realty developer Lodha Group bought a 17-acre land parcel from DLF for Rs 2,750 crore. In 2010, Indiabulls Real Estate had paid nearly Rs 2,000 crore for two land parcels of Bharat Mills and Podar Mills, spread over nearly 12 acres in Worli.

Source: Economic Times