Peninsula Land inks pact with Bhattads to develop 19-acre plot in Central Mumbai

MUMBAI: Real estate developer Peninsula Land has entered into an agreement to jointly develop a plot of about 19-acre in central Mumbai with the landowner Bhattad family and HEM Bhattad Developers. The project is expected to generate a total saleable space of about 1.85 million sq ft by 2017-18.

Under the pact, the Ashok Piramal Group company will pay Rs 144 crore to HEM Bhattad Developers and Bhattad family as an upfront consideration. The entire amount will be utilised for repayment of debt.

HEM Bhattad Developers is a 51:49 joint venture between Peninsula Land and IL&FS. The land is currently owned jointly by Bhattad family and HEM Bhattad Developers in the ratio of 35:65 equity holding, a top company official said. Peninsula Land has already developed close to 2 million sq ft space in central Mumbai and this deal will help it in strengthening its position in the market, executive vice-chairman Rajeev Piramal said.

The total development over 19 acres will be undertaken in two phases, with the first phase of nearly 6 acres estimated to provide saleable area of about 5.5 lakh sq ft. Peninsula Land will receive 64% of the revenue generated from the first phase. The second phase will be spread over 12.5 acres and Peninsula Land will be responsible for project management.

This phase is estimated to generate 1.3 million sq ft of saleable area. For this phase, Peninsula is expected to get 8% revenue as project management charges. The plot is located right next to Peninsula Land’s existing residential project, Ashok Gardens. This will be its third residential development in central Mumbai, after Ashok Towers in Parel and Ashok Gardens at Sewri, both high-end projects. On Wednesday, shares of Peninsula Land closed at Rs 51.70 on BSE, up 3.1% from Tuesday’s close.