Prestige Estates, Century in talks to develop Rs 600-crore property

Bengaluru asset has a development value of Rs 12,000-14,000 crore

Prestige Estates is in advanced stages of signing a joint development deal with Century Real Estate for a 16-acre land parcel in the capital city of Karnataka, according to a source in the know.

The parcel, owned by Century, is located in Hebbal area of Bengaluru and is valued at around Rs 600 crore, sources said. The land has a development value of Rs 12,000-14,000 crore, sources said.

The plot has a developable area of 3 million sq. ft, sources said, adding that Century would get 1.1 million sq. ft and a certain amount of money and balance for Prestige, which will come as a development partner.

According to the sources, though the parties have informally agreed to do the deal, a formal agreement is yet to be signed.

Mails sent to Prestige and Century did not elicit any response. 

Prestige recently signed a Rs 9,160 crore deal with US-based Blackstone to sell commercial properties in South India.

As part of the deal, Prestige sold 85-87 per cent in its nine operational malls to Blackstone. The deal also involved selling operational and under-construction office properties to the US-based fund manager.

Prestige has been signing or acquiring both commercial and residential properties in the country.

It is undertaking joint development projects in Mumbai, Pune, and Noida, among other regions.

Prestige is building over 4 million sq. ft in the BKC area of Mumbai. BKC I is a joint venture project with DB Realty for 2 million sq. ft and BKC II is a joint venture project with Avinash Bhonsle Group for 2 million sq. ft. In the Mahalaxmi area, the firm is building 2 million sq. ft of office development. It has also got NCLT clearance for a 6 million sq. ft residential development in Mulund area of Mumbai. 

In Pune, the developer is working on an 800,000 sq. ft development in the Kharadi area.  

Century is one of the largest owners of land in Bengaluru. It has been selling land parcels and getting into joint ventures to generate cash.

Recently, it sold a piece of land in Bengaluru to Godrej Fund Management for Rs 700 crore.

Century is looking at monetising around 500 acres of land in the next four to five years, P Ravindra Pai, managing director, Century Real Estate Holdings, told a newspaper last year.

The company has three business verticals — affordable (Rs 50 lakh) and mid-market (up to Rs 80 lakh) homes and commercial — and it is looking at developing projects in all these verticals. “We are planning to develop 500 acres in the next five years,” Pai said.

Century had a development pipeline of 7 million sq. ft for the next four to five years. Among the projects planned is a prime office development on St. Marks Road, in central Bengaluru, which Century is developing with the Vaswani Group.

Home sales rebounded in the top cities such as Mumbai, NCR, Bengaluru, and Pune primarily due to the pent up demand backed by lower interest rates and a drop in levies after a washout in the second quarter of this calendar year.

“The demand for good quality homes will continue. There was a lot of pent up demand and we believe the customers have just been waiting for some course corrective measures. We see that some key measures are now in place and this will help build the momentum in the demand,” said Mohit Malhotra, managing director of Godrej Properties.