Peninsula Land buys Mumbai property for Rs 650 cr from Mahindra JV

In one of the biggest land deals in the country this year, realty developer Peninsula Land has signed an agreement to buy a five-acre property in the Byculla area of Mumbai from its joint owners, Mahindra Lifespaces, the realty arm of Mahindra Group, and the Kanorias, for around Rs 650 crore, an executive in the know said.

Peninsula Land has beaten developers such as Lodha, Sunteck Realty and Sheth Developers in buying the property called The Great Eastern Mills, with an estimated 600,000 sq ft area that could be developed.

At this value, the rate comes to Rs 150 crore an acre, which is a decent price for the location, consultants said. Ready residential prices hover around Rs 40,000 per sq ft in the area and under construction projects fetch Rs 25,000 a sq ft.

Peninsula is looking to build a residential project on the plot, the executive said.

Both Peninsula and Mahindra Lifespaces’ spokespersons were not available for comments.

Though the Kanorias were original owners of the property, they did a joint development with the Mahindras. A couple of months ago, the partners decided to put the property on the block. “It shows that credible players with sound financial background still believe in the Mumbai story and putting value into it,” the executive said.

Peninsula Land, which was among the more cautious realty groups, has aggressively bought land parcels in the last couple of years.

The company spent over Rs 2,500 crore in the last three years to buy land in Mumbai, Bangalore and Hyderabad.

In 2011, Peninsula bought Bishopgate, the property co-owned by Standard Chartered Bank and HSBC, for Rs 272 crore, outbidding four others including Mahindra Lifespaces, Wadhwa group and others.  In late 2011, Peninsula announced a joint venture with Brookfield Asset Management to float a real estate fund.

Peninsula Land stock went up 9.75 per cent on Friday to close at Rs 33.20 while Mahindra Lifespaces’ stock went down 0.20 per cent to close at Rs 438.55