Realty developer Prestige Estates Projects’ subsidiary Prestige Projects has acquired a prime sea-facing land parcel in south Mumbai from DB Realty’s subsidiary Marine Drive Hospitality & Realty for over Rs 704 crore. The deal values the plot at over Rs 306 crore per acre, making it one of the most expensive land transactions in the country. DB Realty had initially planned to develop a 125-storey luxury hotel on the plot. The plan was later modified in favour of a luxury residential project with two towers, which remained a non-starter.
Prior to this acquisition, Edelweiss Asset Reconstruction Company had attempted to auction the land parcel to recover Rs 473 crore of a loan and interest. Edelweiss ARC had taken possession of the plot last year after DB Realty’s subsidiary Marine Drive Hospitality failed to repay a Rs 439 crore loan. Following the transaction with Prestige Projects, DB Realty has utilised the money to repay the lenders.
The Prestige Group is planning to develop two luxury residential towers on the acquired plot. This will further expand the group’s presence in Mumbai’s luxury space. The group aims to develop these towers overlooking the Queen’s necklace and the Arabian sea. Tariq Ahmed, CEO, West India, Prestige Group, has confirmed the expansion plans.
In addition to this, Prestige Estates Projects had previously acquired complete ownership of two of DB Realty’s key projects in central Mumbai’s Bandra-Kurla Complex (BKC) and south Mumbai’s Mahalaxmi locality. The acquisition was made by picking up the balance stake for a total consideration of over Rs 1,176 crore. The projects include potential gross leasable areas of 2.79 million sq ft of Grade A office space in BKC and 2.9 million sq ft of Grade A office space in Mahalaxmi. Both projects are currently under construction and are expected to be completed in the next 3-4 years.
Market experts believe that the ongoing market consolidation in favour of large and established developers will gain further momentum as they have better execution ability and access to liquidity. Transactions for land parcels have started to gather pace again, with many deals, including outright acquisitions and joint ventures, being closed or expected to close soon in key property markets of Mumbai, Pune, Chennai, Hyderabad, and Bengaluru.
