Billionaire Chandru L Raheja promoted K Raheja Corporation, a Mumbai based real estate firm that runs retail chains and shopping centres such as Shoppers Stop Ltd, Inorbit and Mindspace, has signed a joint development deal to develop Modern Mill, a privately held defunct textile mill property in South Mumbai.
The 6 acre prime property, located near the Mahalaxmi Race Course and owned by the Jatias of real estate to textiles firm Modern India Ltd, is valued at about Rs 300 crore, according to analysts. The mill had been shut in early 2004.
“We plan to build residential apartments in the property. It is in the approval stage now,” said Vinod Rohira, director, K Raheja Corp, which has around 7 million sq ft of commercial real estate space under development across cities including Mumbai, Pune, Hyderabad and Bangalore. He didn’t give details of the deal.
In most such joint development deals, the landowner doesn’t give up ownership rights to the property but gets a portion of the developed property from the developer.
The new deal has happened almost a decade after the Jatias had signed a similar joint development agreement with Mahindra Gesco now, Mahindra Lifespace Developers Ltd, the realty subsidiary of auto maker Mahindra and Mahindra Ltd to develop about three acre on another portion of the Modern Mill property. The upscale 40 storey “Belvedere Court” residential tower was built at the location.
Vijay Kumar Jatia, chairman and managing director of Modern India, was not available for comment.
The firm has a land bank of about 1.89 million sq. ft in Mumbai and its surroundings, of which it plans to develop 1.5 million sq ft, according to information on its website. Property prices in the Mahalaxmi area are in a range of Rs 25,000 30,000 per sq ft, said two analysts.
“It’s a good location where apartments overlooking the Mahalaxmi Race Course will fetch a premium,” said Ashutosh Limaye, associate director, strategic consulting, Jones Lang LaSalle Meghraj, a property consultancy.
Limaye said it is also a good business move by K Raheja Corp, which has “Vivarea”’, its new luxury residential project in the vicinity. “With this, the real estate firm will have a stronger hold in this micro market.”
With the real estate sector staging a partial recovery from the downturn, developers are again expressing interest in land parcels in prime city locations.
Over the next two weeks, National Textile Corp. Ltd will sell its 2.5 acre Poddar Processors textile mill and 8 acre Bharat Textile Mill, both in Central Mumbai, through two separate online auctions. The reserve price for both the properties is about Rs1,000 crore.