Hyderabad realty firm buys 25 acres for Rs 800 cr

In the largest land deal in the country in 2020, Hyderabad-based Rajapushpa Properties has spent Rs 800 crore in acquiring 25 acres with a tag along joint development agreement in the Telangana capital, said two people aware of the transaction. The land located on the Outer Ring Road in Hyderabad will be used to develop a high-rise residential project. “The builder has bought 18 acres through direct purchase for Rs 550 crore and the remaining economic interest under joint development will be another Rs 250 crore,” one of the people said. The project will be launched next month and will comprise 2 BHK and 3 BHK units spread between 1,370 and 2,680 sq ft.

Rajapushpa Properties and real estate consultancy firm CBRE, which brokered the deal, refused to comment on the transaction. The deal holds significance as most funds and builders are now opting for the joint development model to acquire assets rather than investing in land. Also, stressed developers are increasingly forming joint ventures, monetising land and extending development management contracts across major cities. Large funds like Blackstone and Brookfield have recently purchased income-generating assets rather than land. However, companies such as Godrej Properties and Prestige Group have been actively looking to buy land or enter into joint development deals. Rajapushpa is also trying to expand its footprint to the commercial segment in Hyderabad.

“The company has over 30 acres of land bank in the IT corridor of Kokapet and will develop office space as the demand will continue to grow,” said one of the people cited above. The southern residential and commercial market continues to lead the recovery in the realty sector with average residential price and office rental seeing an upward trend, with Hyderabad and Bengaluru being the key drivers. In the third quarter of 2020, Hyderabad and Bengaluru were the only residential markets that witnessed a price increment, 4% and 3%, respectively, from a year earlier.