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| DLF gears up to sell Bombay Mills property |
| Pooja Sarkar / Kolkata Dec 18, 2011, 00:06 IST |
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This article has ben modified. Please read the clarification at the end of the article.
DLF will hire an investment banker and an international property consultant (IPC) by mid-January to sell off its Bombay Mills parcel in the country’s western metropolis. The 18-acre premises at Central Mumbai’s Lower Parel is likely to fetch Rs 2,500-3,500 crore for the country’s largest realtor going by market capitalisation, according to sources close to the development.
One of them said three international property consultants have already pitched in. Jones Lang LaSalle India, Knight Frank India and CB Richard Ellis are expecting the announcement by the middle of January next year, he revealed. “DLF has clearly told them that they want to close the Aman transaction by this end-December and then announce the mandate for the Lower Parel parcel,” the source told Business Standard.
A message this newspaper sent to a DLF official went unanswered.
A senior official, who was part of the pitches for the property, said JLL India has pegged the price between Rs 3,000-3,500 crore, whereas Knight Frank India is looking for somewhere between Rs 2,500-3,000 crore. CBRE had also pitched “aggresively” for the asset.
“Now that the pitches are over, the consultancies are waiting for the announcement of the mandate,” he added. DLF is seeking a compensation upwards of Rs 4,000 crore for the monetisation of this parcel, even as all the consultancies have “clearly indicated that it is not possible to strike a deal at DLF’s expectations”.
The source informed that most of the Mumbai-based developers had gone and met officials at DLF for joint developments, too, but the real-estate major “is clearly not interested”. As real estate market in Mumbai is currently going through one of its worst phases, the deal will be an outright sale. “Though none of the developers have enough balance sheet strength to go ahead and buy a land asset at the asking rate, it will mostly be on the format of 50 per cent cash and the rest as deferred payment,” he added.
Besides the three IPCs who have made their pitches, the proposed deal has spurred interest also from the investment banking side. UBS and Deutsche bank are a couple of examples, a source said.
DLF’s first footsteps into the Mumbai realty market was with this land parcel called Bombay Mill, which it had bought with an aggressive bid of Rs 702 crore from an auction by National Textile Mill. It was quoted to be the largest realty deal in the country in 2005.
DLF had then announced that it would launch a “promising and futuristic retail-cum-entertainment centre” on that site. In the last 6 years the realty major has changed many a drawing-sheet for the “perfect launch”. In fact, in June last year, it was planning to launch a 90-storeyed luxury residential tower on the site— with an expected revenue of Rs 15,000 crore.
CORRECTION
This article had mentioned that Oberoi Realty had made an offer to DLF for Rs 2,500 crore. Oberoi Realty has clarified that it has not been in talks with DLF for a land deal. The article had also said that there could be investor pressure on Oberoi Realty to look at the land parcel. The company has clarified that there is no investment pressure on the company to look at any land parcels. The article had also said that Oberoi's Worli project was delayed. Oberoi Realty has clarified that its project at Worli, Mumbai is on schedule.The errors are regretted.
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