Godrej Properties Limited (GPL) has conceptualised the development management agreement (DMA) model and is currently handling seven projects in NCR. These include six under the joint venture model and one under the development management model. The other 52 projects that Godrej has around the country include 10 under the DMA model and 42 under JV/own projects.
Mohit Malhotra, executive director, GPL, says the company entered the NCR market this year for the joint development agreement (JDM) project with Lotus Greens in Sector 150, Noida. It has the mandate to develop a 36 acre parcel for the company. “The project is at the design development stage. Under this model we take full control of the project, designing, developing, marketing and constructing it. Our funds are parked in an escrow account. The company intends taking up only greenfield projects and not those that are half way through,” he says.
Tata Housing has recently conceptualised, marketed and is managed a project, Eleve, in Mumbai. Priority markets where this development model will be explored are Mumbai, Delhi, Bangalore and Kolkata,” says Brotin Banerjee, MD & CEO, Tata Housing.
In north India, Lotus Greens, a local player active in the Noida market, has entered into a joint development agreement with a land owner in Gurgaon in an attempt to step into the Gurgaon market.
“In Gurgaon, we have a JDA for a 19 acre parcel on Sohna Road and constructing a township in Gurgaon. While we are doing 50 acres, as part of the second phase of the project, we have entered into a JDA with Orris to construct a township and will be handing over 40% of the built area to them. The arrangement has helped us foray into the Gurgaon market,” says Tapan Sangal, group director, Lotus Greens.
In Noida, the company owns 300 acres in Sports City, in Sector 150. “We have tied up with Godrej under the DMA model for the project. National brands help bring in discipline and give a local developer the much needed trust factor which is missing today because of undelivered projects. The tie-up will help us push our inventory in the market. We are entering into DMAs only for greenfield projects where approvals are in place,” he says.
Headquartered in Bengaluru, Sobha Developers Ltd, is working through two models in north India - one with a land owner with whom revenue sharing is involved (JDA). The other is through the development management agreement (DMA) model which allows the landowner to hold the land and a developer gets 12% to 15% development management fees to execute the project.
“Under RERA customers rights will get protected better. RERA will help organised players to do more so small developers will have to scale up. We are also open to executing projects that have been left unfinished midway but will get into them only after extra due diligence as third party interest has already been created in such projects,” says JC Sharma, vice chairman and managing director, Sobha Group Ltd.
Shakti Nath, CMD, Logix Group says that as a company “We have realised that it is better to enter into JDAs not with large players but with local ones
who have executed projects. DMAs with big brands is a relatively expensive proposition as their management fees and cost of construction is usually very high. In sector 150, Noida, we have entered into DMAs with local players such as ATS, Mahagun and Antriksh for around 100 acres of land that we possess. We still have another 100 acres left, out of which 20 acres we are developing ourselves.”