L&T Realty, the property development arm of Larsen & Toubro, has entered into a binding agreement with Valor Estate, earlier known as DB Realty, to jointly develop a more than Rs 20,000-crore project on a 10-acre land parcel in Mumbai’s Bandra-Kurla Complex (BKC), said people aware of the development.
Both companies are planning to build a mixed-use project with premium housing, commercial spaces, and a 1,000-key five-star luxury hotel, on a combination of revenue and area-share basis. The land parcel is located next to the upcoming Bombay High Court complex.
“The project has a total development potential of over 7.5 million sq ft area, and as per the terms of the agreement, L&T Realty and Valor Estate will share developed area in effective ratio of 58% and 42%, respectively,” said one of the persons cited earlier. “Valor Estate will completely own the proposed luxury hotel.”
The land parcel is a part of a 13-acre plot that has some 5,500 families living in slums, who will be rehabilitated as part of the project.
Valor Estate will be responsible for getting the land vacated and obtaining necessary approvals for the development, which is expected to be completed in the next 12-18 months. As per the timelines, the entire project, including the rehabilitation work, is expected to be completed over the next 5-6 years.
“Valor Estate is also in advanced talks with international hotel brands for a 30-year operating agreement for the luxury hotel expected to be developed as part of the larger layout on this land parcel,” said another person mentioned earlier.
In the proposed development, about 3.75 million sq ft will be free-sale component and 3.2 million sq ft will be under rehabilitation as part of the project. Out of the free-sale component, around 1.5 million sq ft will be developed as the luxury hotel property, while the remaining 2.25 million sq ft will be commercial, including retail and premium housing.
L&T Realty declined to comment. ET’s email query to Valor Estate remained unanswered till as of press time.
Valor Estate recently entered into a similar binding agreement with Macrotech Developers also for a residential project spread over 5.4-acre land parcel in Mumbai’s Malad west suburb.
The company has been working on its growth strategy through these alliances to monetize its key land parcels for the last couple of years. It has so far entered into such partnerships with realty developers including Prestige Estates Projects, Adani Realty, Godrej Properties, RMZ Corp etc to develop projects on its prime land parcels across Mumbai.
L&T Realty also recently entered into an agreement to jointly develop a 12.2-acre land parcel in Thane’s Panchpakhadi locality. The project, involving rehabilitation of a large layout of slums, has development potential of more than 3.12 million sq ft.
Real estate projects involving joint development and redevelopment play a crucial role in the functionality of most property markets. This importance is heightened in the context of rising land prices and the decreasing availability of vacant land parcels in major urban centres.
