DB Group's hospitality arm, Sheth Creators in joint venture talks for south Mumbai project

MUMBAI: DB Group's hospitality arm is in advanced talks with another Mumbai-based developer Sheth Creators for an agreement to jointly develop a high-end sea-facing residential project on a prime 2.2-acre land parcel at Marine Lines in south Mumbai, three people familiar with the development said.

The company had earlier scrapped its plan to develop a 126-storey five star luxury hotel on the plot that oversees the Arabian Sea.

Under terms of the proposed joint development agreement, DB will get 55% of the total area estimated to be about 7.5 lakh sq ft, while the rest will go to Sheth Creators. Sheth will pay around Rs 200 crore as an upfront refundable deposit to DB Hospitality, which has now been rechristened Marine Drive Hospitality & Realty.

“Terms of the agreement have been finalised and the pact will be entered into in a few weeks,” said one of the people quoted above. “Under the terms, Sheth will undertake execution, arrange construction finance and pay premium to the civic authority for fungible floor space index, while DB will be responsible for all approvals.” DB Realty declined comment for the story. An email query to Sheth Creators did not elicit any response until time of going to press.

It could not be ascertained if the proposed ultra-premium residential project will be branded and marketed jointly by DB and Sheth.

Besides this project, DB Realty is also holding talks to enter into a joint venture for executing the Bandra MIG colony redevelopment.

The group had acquired the plot located close to SK Patil Udyan at south Mumbai's Charni Road in 2005 from Suresh Estates Pvt Ltd, another developer operating in south Mumbai.

DB Group had initially proposed the project, under the name of Park Hyatt Tower, in 2008. The construction work for the proposed 718-metre skyscraper had started after approvals from the civic authority in 2010.

But it was put on hold in 2011. With the project being revived, the company may have to seek fresh approvals.

The developer had moved the Supreme Court seeking directions to the state government to allow a higher hotel floor space index (FSI) of 6.29 for the project. In December 2007, the court asked the state government to consider the developer's plea.
The project cost for the hotel was then estimated to be over Rs 2,500 crore. The hotel was to be operated by Hyatt Hotels and Resorts.

In September, Industrial Finance Corporation of India (IFCI) had put this plot on the block to recover its dues after the developer failed to pay back secured debt. IFCI had invited bids under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFESI) Act with a reserve price of Rs 606 crore for the plot. DB Goup had challenged IFCI's move to auction the plot and the matter was later referred to the debt recovery tribunal.