Tata Realty, StanChart PE JV buys Thane-Belapur land for Rs325 crore

Mumbai: In the biggest land deal in the year so far, a joint venture of Tata Realty and Infrastructure Ltd (TRIL) and Standard Chartered Private Equity has acquired a 47.5 acre plot at the Thane-Belapur industrial area close to Mumbai for Rs325 crore, two people aware of the development said.

The joint venture will use the land to build around 6.5 million sq. ft of Grade A offices for information technology companies, the first of the two people cited above said.

The plot belongs to the Maharashtra Industrial Development Corporation (MIDC), a government body which develops and leases out industrial land to investors and companies.

Real estate consultant Cushman & Wakefield, the property adviser to the transaction, declined to comment. Tata Realty did not respond to an email sent on Thursday while Standard Chartered PE declined to comment.

“TRIL has been eyeing this market for the last three-four years. Thane-Belapur road is becoming an attractive micro market due to the increasing commercial activities specially IT park development happening around the area,” the second person said.

In 2015, Tata Realty, a unit of Tata Sons Ltd, and Standard Chartered formed a Rs3,000 crore investment platform to buy commercial assets. In June last year, it bought out commercial assets of Gurgaon-based builder M3M for Rs250 crore.

The Thane-Belapur deal comes at a time when outright sale of land has significantly slowed down as developers increasingly opt for joint development or revenue sharing model with land owners. No major land deal has happened this year. The last big land sale (in value terms) was in December 2016 when realty firm K Raheja Corp. and Singapore’s sovereign wealth fund GIC announced they would jointly acquire a three-acre land parcel in Mumbai’s prime Worli locality for Rs610 crore from Siemens Ltd.

Some of the other large land deals in the last one year include K Raheja Corp. acquiring 62.25 acres in Navi Mumbai from the Mafatlal Group for Rs355 crore and Godrej Properties buying 12 acres in Sarjapur in Bengaluru from Mumbai-based builder HDIL Ltd for nearly Rs100 crore.

However, many large corporate land deals, particularly in Mumbai suburbs, have been stuck due to regulatory hurdles and price expectation mismatch between the buyer and the seller. In addition, the prolonged slump in real estate has also forced real estate firms to join hands with land owners and co-develop projects.

Large companies such as GlaxoSmithKline Pharmaceuticals (GSK), Essar Group and Hindalco Industries Ltd have been looking to monetize some of their land parcels but haven’t been able to find takers.

“With a slowing market situation, the number of land transactions has significantly gone down, but paradoxically, in some micro markets, rates are also going up which are at times not viable for any project,” said Abhishek Goenka, tax partner, PwC India, a consulting firm