Home Rentals Residential L&T Realty and Nirmal Lifestyle Sign a Joint Development Deal for 3 Million sq ft

L&T Realty and Nirmal Lifestyle Sign a Joint Development Deal for 3 Million sq ft

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L&T Realty and Nirmal Lifestyle Sign a Joint Development Deal for 3 Million sq ft

Larsen & Toubro’s real estate wing, L&T Realty and Nirmal Lifestyle Developers, Mumbai have signed an agreement to jointly develop approximately 20 acres of land in northern Mumbai and central suburb of Mulund.

The proposed ₹ 570 crore development project will be financed by L&T Finance, out of which NCD’s issued from Green Maiden A 2013 Trust, Kotak Investment Advisors and INQ Holding LLC, acting on behalf of Debenture Trustee IDBI Trusteeship Services, will be repaid up to ₹ 400 crore and the remaining balance will be used for the project.The project has a saleable development prospect of 3 million sq ft with an expected revenue generation of approximately ₹ 5,500 crore in the next 7 to 8 years. The revenue generated from the project will also be used to repay L&T Finance.

Dharmesh Jain, Chief Managing Director, Nirmal Lifestyle Developers, said that the company has balance developmental opportunities of more than 1 crore sq ft in Mulund, which they aim to develop through similar partnerships with other reputed establishments. L&T Realty has also confirmed the joint development agreement with Nirmal Lifestyle.

Nirmal Lifestyle Developers was already looking to monetize its land parcel and was exploring all possible opportunities to make it happen. But the company was interested in joint development ventures which will help them to get future revenues besides upfront payment.

The Debt Recovery Tribunal (DRT) recently instructed the developer to hold the sale of any of its properties as well as disclose all movable and immovable assets, after a petition was filed by IDBI Trusteeship Services. One of the main reasons behind the proposed deal is to partly pay off the company’s debt which is more than ₹ 1800 crore with an annual cost of debt of around 20%. Nirmal Lifestyle Developers acquired the proposed land parcel in Mulund (west) in 2005 from another realty developer in Mumbai.

The integrated residential township will be developed in several phases, with a total of 2000 apartments which will be handed over in the next 7-8 years. The project launch is expected to take place over the next 4-6 months, post that it will be self-funded. According to the proposed development agreement, Nirmal Lifestyle will be responsible for land and permissions while L&T Realty will execute, develop and market the project.

Also Read: Tax relief may spur joint developments in realty

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