Lodha, Runwal, Sheth in talks to buy DLF's Mumbai land

City-based real estate developers such as Lodha Developers, Runwal Group and Sheth Creators are in talks with DLF, the country’s largest developer, to buy a piece of land here, it is learnt.

While DLF was seeking a valuation of Rs 3,000 crore for the 17-acre plot, the potential buyers were negotiating to buy it at Rs 2,000-2,200 crore, said a person with direct knowledge of the deal talks.

“Even as all the parties had talks with DLF, the developer is yet to make up his mind, as it is expecting higher valuations,” said the person.

Abhisheck Lodha, managing director of Lodha Developers, declined the company was in talks with DLF. A top Runwal group executive also responded in the negative. Vallabh Sheth of Sheth Creations was unavailable for comments. A DLF spokesperson said the company did not want to comment on market speculations.

With a total saleable space of 4.3 million square feet and public parking of 250,000 sq ft, the entire project will be one of the biggest in central Mumbai, consultants say.

DLF bought the land in an auction in 2005 from state-owned National Textile Corporation for Rs 702 crore. Initially, it wanted to do a ‘futuristic retail-cum-entertainment complex’ on the plot, but later changed it to a luxury residential project of 1,000 residential units and largest parking lots, after it obtained additional floor space index under the public parking incentive.

However, it put the plot on the block after property sales saw a decline and its debt went up over the last few years. The land sale is a part of DLF’s plan to raise Rs 7,500 crore by March 2013 through non-core asset sales.

“The prospective buyers are not happy with the current plans. If they have to submit new plans, they have to shell out at least Rs 500 crore. I think the deal should happen at around Rs 2,500 crore,” said the source.

Anuj Nangpal, director, investment advisory, DTZ, an international property consultant, said: “In particular, buyers with deep pockets find themselves in an enviable position of negotiating hard to get more rational pricing on land deals. They are adopting a wait-and-watch policy and will transact actively only if the pricing is significantly to their advantage.”

Recently, Ajay Piramal Group bought HUL’s Gulita property in Worli Seaface for Rs 452 crore and HDFC took HUL’s erstwhile headquarters in Churchgate on a three-year lease.