Godrej Properties has entered into an agreement with realty developer Akshaya Sthapatya (ASPL) to jointly develop a 1.1 million sq ft residential project at Worli, Mumbai, two people aware of the development said.
The big-ticket, sea-view project is the first such deal in the country since the Covid-19-led lockdown disrupted work and demand in the real estate sector. “The transaction is envisaged on a profit-sharing basis between ASPL and Godrej Properties,” said one of the persons cited earlier.
Realty developers Satellite Group and Aniline are key shareholders of ASPL. Dynamix Group, another developer, is a shareholder in Aniline. An email query to Godrej Properties remained unanswered as of press time. Satellite Group declined to comment for this report. The land parcel is part of a slum rehabilitation project being jointly developed by ASPL. The project will be spread over 5 acres and will include rehabilitation of the more than 1,500 families living in slum dwellings.
The project was started in 2002 with a few other partners who are not part of the venture anymore. It was stuck for almost a decade due to regulatory logjam over Coastal Regulation Zone (CRZ) norms. A spokesperson for Dynamix Group confirmed the alliance and said the estimated free sale component is approximately 1.17 million sq ft, subject to statutory approvals, including CRZ clearance. The spokesperson did not give more information.
As per the agreement, ASPL, through Dynamix and Satellite, will be executing the rehabilitation part of the project located next to the National Sports Club of India (NSCI), while Godrej will be responsible for the free-sale component.
According to the people cited earlier, the project’s marketing and branding will be done jointly by the entities involved. The design and master layout of the project is being worked out by Godrej Properties. Godrej Properties has inked the deal and already paid a token amount for the same and will pay a further premium upon successful completion of agreed milestones, they said.
The land parcel is diagonally opposite Nehru Center with access from Annie Besant Road.
Based on a lower range of market rate of Rs 35,000 per sq ft and 1 million sq ft development potential, the project revenue is estimated to be Rs 3,500 crore, according to industry experts. Each party will get their share of profit after factoring the cost. But most of these numbers are tentative as the free-sale part of the project would start after at least a year.
As per the slum rehabilitation regulations, the permissions for free-sale components of such projects are issued in proportion to completion of rehabilitation part.