Lodha in talks with HDFC to develop 1.4-million-sq-ft office project in Mumbai's Andheri
Realty major Lodha Group, also known as Macrotech Developers, is in advanced talks with India’s largest mortgage lender HDFC to enter into an agreement to develop a 1.4-million sq ft commercial project in Mumbai’s Andheri suburb, said people with direct knowledge of the development.
HDFC is a financial investor in the development that is currently being undertaken by Omkar Realtors & Developers as a slum rehabilitation project. Other large developers including Runwal Group and Rustomjee Group also held discussions earlier for this project.
As part of this proposed tripartite agreement, Lodha will be responsible for development of the 15-storey office tower with five basements, while Omkar is expected to secure approvals in addition to completing the rehabilitation part.
“The talks have moved forward and terms are being finalised now,” said one of the persons mentioned above. “The pact is expected to be concluded in the next few weeks. The proposed alliance is expected to help Lodha build its commercial development portfolio further while pushing HDFC’s returns.”
The project, Kenspeckle on the Western Express Highway, has already completed 90% of the rehabilitation part, while the free-sale commercial component has reached the plinth level.
Lodha, as the new entrant in the development, is expected to provide a certain part of commercial space, once completed, to HDFC as part of the consideration.
ET’s separate email queries to HDFC, Lodha Group and Omkar Realtors remained unanswered until the time of going to press.
The proposed transaction is the latest instance of the ongoing consolidation in the real estate sector in the backdrop of the Covid-19 pandemic. Owing to the changing business scenario, Lodha Group has also witnessed increase in its market share in its most important market, the Mumbai Metropolitan Region (MMR) region, and is now expanding the business in the Pune property market.
Macrotech Developers recently announced entering into two joint development agreements for Mumbai’s western suburb Malad and Pune’s NIBM locality. Both the projects hold an estimated gross development value of around Rs 1,500 crore.
Recently, the company’s managing director Abhishek Lodha told investors in a conference call that Macrotech would share revenue with landowner partners in these two projects.
The company is looking at entering into more such alliances to widen its presence in several micro-markets. Lodha said the company would go for outright land purchases only if there are good opportunities.
Macrotech Developers has reported a 31% on-year rise in consolidated net profit of Rs 312 crore for the quarter ended March. Revenue from operations increased 20% at Rs 2,534 crore. The company’s pre-sales from India operations rose 116% during the quarter to Rs 2,531 crore with collections increasing 10% to Rs 2,089 crore.
Being one of the largest land bank owners, Macrotech holds nearly 5,000-acre land parcels across MMR including Malabar Hill, Napean Sea Road, Tardeo, Prabhadevi, Mira Road, Palava and Upper Thane.