Six years after signing a joint development agreement for a prime sea facing Prabhadevi plot, developer Wadhwa Group is believed to have walked out of the Rs 7,500-crore project following differences with partner Hubtown (formerly Ackruti). The partners ‘cordially’ decided to end the agreement for the luxury residential development called 25 South, comprising three towers of about 50-storeys each on a 5.5-acre plot.
On Monday, both sides vehemently denied the split during a con call with TOI.“It’s not true. We had issues which any two partners have and we both have moved on and are focusing on what is important,” said Navin Makhija, MD, Wadhwa Group. “We are jointly developing the project. There is no disagreement. Rivals are spreading rumours,” sai Vimal Shah, MD, Hubtown.
However, market sources confirmed the differences between the two builders were settled before an arbitration tribunal of Justice (retired) MG Gaikwad. TOI has learnt the two developers have already signed consent terms to end the partnership and the papers have been sent to be formally registered. The Prabhadevi plot owned by Hubtown used to be the Hindoostan Mills.
In December 2014, the developer tied up with Wadhwa to jointly develop the land. Sources familiar with the agreement said that Wadhwa had raised Rs 130 crore from its own capital to start the project. As part of the deal, Wadhwa was to receive 13.5% from the total sale of apartments in the three towers and a fixed fee of Rs 30 crore for planning, developing and executing the entire project. The dispute between the two partners arose over payment issues, it is learnt.
The first of the three skyscrapers (Wing A South Tower) has reached up to the 38 floors of the sanctioned 47 floors. According to sources, Wadhwa will now only have claim over portions of this tower and not the other two. “Hubtown will now take over the entire project while Wadhwa will assist in completion of the first tower. Wadhwa will have no rights or interest in the balance project,’’ said sources.
Hubtown will reimburse Wadhwa to the tune of Rs 225 crore which will be in the form of 45,897 sq ft of space in the under-construction tower. This includes 21 apartments and 55 car parks in the tower. Some of the corporate honchos and businessmen who have booked flats in Wing A include Rajesh Mandawewala of Welspun Group, Rajiv Sabharwal, MD & CEO of Tata Capital and Sandeep Bakshi, MD & CEO of ICICI bank. Recently, Oaktree Capital Management invested Rs 425 crore in the project.
