Bengaluru: Real estate firm BPTP Ltd has sold a 14.8 acre land parcel in Dwarka Expressway to Mumbai-based Godrej Properties Ltd and is in the process of selling a second parcel around the same location to another developer. The sale of both will help BPTP raise around Rs500 crore, said a top company executive.
This is part of BPTP’s larger monetization strategy through which it aims to settle all dues to foreign investors JP Morgan Chase and Co. and Apollo Global Management LLC. by March 2018.
Between 2006-08, Gurgaon-based BPTP raised over $250 million from a clutch of investors who bought stake in the company.
“We want to use most of these funds for exiting our investors, who are shareholders in the company. Some of it will be used for our projects in Gurgaon and Faridabad. We have also raised around Rs500 crore of debt in the last year which isn’t fully utilized, so we are trying to strike a balance between raising debt and equity,” said BPTP chairman and managing director Kabul Chawla on a telephone interview.
The BPTP land is the fourth acquisition under the Godrej Residential Investment Program II (GRIP-II), a $275 million fund that was announced in March 2016, to invest in residential projects. The fund was raised from a clutch of investors with Dutch pension fund asset manager APG Asset Management NV as the lead investor.
A Godrej Properties spokesperson said that the company bought the land on Dwarka Expressway because it liked the price, the good location and is appropriate for a mid-income residential project. The land allows approximately 1.5 million sq ft of developable area. He didn’t give details of the deal value or the seller.
Earlier this year, BPTP also exited the Hyderabad property market, when it sold a land parcel in Hitec City to Bengaluru-based developer Salarpuria Sattva Group for around Rs200-250 crore. Apart from selling land, BPTP also sold BPTP Crest, a 8,00,000 sq ft office building in Gurgaon, to investment partners Bengaluru-based developer RMZ Corp. and Qatar Investment Authority for around Rs850 crore in 2015.
BPTP, which has nearly 2000 acres of land in Faridabad and has utilized only 1000-1100 acres so far, also plans to enter into joint ventures with established, corporate developers.
“We will remain NCR focused and want to work with credible developers, backed by strong financial capabilities, who will add value to the projects,” Chawla said.
The firm, which has net debt of around Rs375 crore, plans to deliver around 2,500 homes in the next three months and deliver five of its projects within the year.
The National Capital Region (NCR), which is India’s largest property market, has also been the worst impact in the over four-year long real estate slowdown that still continues. Developers have slowed down or stalled project launches, trying to finish projects on hand and in certain cases, trying to get partners on board to help execute them or selling them off.
“Most developers have monetisation and alternative strategies to sell land parcels or partner with other developers, where the latter can give higher deposits so that they can survive the current difficulties in the sector when projects sales are tepid,” said Santhosh Kumar, chief executive officer-operations at property advisory JLL India.
Real estate firms are not launching any new projects, particularly in NCR, and are trying to complete ongoing projects by raising debt or construction finance from alternate investors, Kumar added.