In one of the biggest land deals in the country in the past one year, the Mumbai-based Wadhwa Group today said it had bought 18.18 acres in Mumbai’s Ghatkopar suburb for Rs 571 crore from Hindustan Composites Ltd. The deal works out to Rs 7,210.31 a sq ft (1 acre equals 43,560 sq ft).
The developer has tied up Rs 300 crore from the Indiabulls Group to pay for the land and will use internal accruals to fund the rest of the deal. Consultants termed the deal expensive, given the prevailing property prices.
“I think it is a good price for the seller. The buyer will be able to make his returns by the time the project gets all approvals and gets going. Since markets have improved, such deals are happening now,” said Akshaya Kumar, chief executive of Park Lane Property Advisors.
In 2008, another developer, K Raheja Universal, had almost bought the same land for Rs 700 crore but the deal did not go through.
The Wadhwa Group plans to sell the property for about Rs 9,000 a sq ft. It plans to launch a complex by the name Address, with 10 buildings on the said land. “The plan is to launch the project by January 31,” said Vijay Wadhwa of the group. Apartment prices in Ghatkopar range from Rs 6,000 to Rs 10,000 a sq ft.
“We have paid a price that is a little high. But, you do not get such a big chunk of land in Mumbai. We want to build and sell the products at affordable rates. We are getting enquiries from diamond merchants, NRIs and stock brokers,” he added.
The national record for a commercial land deal was created by the Wadhwa Group itself, when it won a plot that was less than two acres in size at the Bandra-Kurla Complex in Mumbai for Rs 831 crore in November, 2007. When the property market went down, the Mumbai Metropolitan Region Development Authority came to its rescue and increased the floor space index (FSI)— the amount of construction permitted on a given piece of land. The group got an FSI of 9.34 for the land.