Mumbai:
In talks with DB Group to buy 2.2-acre, sea-facing land parcel for Rs 1,000 crore.
Piramal Realty is in advanced talks with DB Group to acquire a prime sea-facing, 2.2-acre plot of land at Marine Lines in south Mum . 1,000 crore. The Ajay Pibai for over` ramal-led company is also expected to give DB Group 20% of built-up space on the property , two persons familiar with the development said.
“Piramal Realty is currently doing due diligence for the deal and the talks are at an advanced stage, with the terms almost finalised,“ one of them said. Piramal Realty declined to comment. DB Realty, however, denied the development.
The proposed deal with Piramal Realty comes in the wake of the DB Group's decision to scrap its plan to develop India's tallest 126-storey fivestar luxury hotel on the plot that oversees the Arabian Sea. The group had initially proposed the project under the name of Park Hyatt Tower in 2008. It had acquired the plot, located close to SK Patil Udyan, in 2005 from Suresh Estates, another developer operating in south Mumbai.
The construction work for the proposed 718-metre skyscraper had started after approvals from the civic authority were obtained in 2010. However, the project was put on hold in 2011. DB Group will have to seek fresh approvals, including for the building plan to be prepared by Piramal Realty, whose payment of the consideration will be linked to the securing of these sanctions.
Piramal Realty, founded in 2011, is part of the Piramal Group and has invested over . 4,100 crore in acquiring ` prime properties in Byculla and Kurla in Mumbai and Thane in the past few years.
This is among the first such transactions involving DB Group after its alleged involvement in the 2G telecom spectrum scam in 2011. For the past few quarters, the developer has been looking to tie up with other developers to further some of its projects such as the MIG colony redevelopment in the Bandra suburb of Mumbai.
Late last year, the group's hospitality arm had held talks with another Mumbaibased developer, Sheth Creators, to jointly develop a high-end, sea-facing residential project on the same plot.However, these talks did not lead to any transaction.
Under the proposed agree ment, Piramal Realty will pay about ` . 60 crore as upfront, refundable deposit to DB Hospitality, which has now been rechristened Marine Drive Hospitality & Realty , as initial consideration, the people cited earlier said. Within two years of this initial payment, DB Group is expected to secure permissions for the proposed project plans and this will be treated as a trigger for payment of the balance over the next few years.
Piramal Realty will execute, brand and market the project, according to the proposed deal, while DB Group will be responsible for obtaining approvals from the civic au thority . In September 2014, Industrial Finance Corporation of India had put this plot on the block to recover its dues after the developer failed to repay secured debt. IFCI had invited bids under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act with a reserve . 606 crore for the plot.price of ` DB Group had challenged IFCI's move to auction the plot and the matter was referred to the debt recovery tribunal.
DB had moved the Supreme Court seeking directions to the state government to allow a higher hotel floor space index of 6.29 for the project. In December 2007, the court asked the state government to consider the developer's plea.
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