L&T Realty has partnered with Jagdale Infrastructure to develop a 12.2-acre slum rehabilitation project in Thane's Panchpakhadi area, with L&T Realty leading the project and earning 69% of the profits. The development, which involves over 20 slum pockets and has a potential of 3.12 million square feet, is expected to be completed in five years. L&T Realty will manage the design, construction, and sale of the free-sale component, while also overseeing the rehabilitation process for slum dwellers.
L&T Realty, the real estate development division of engineering giant Larsen & Toubro, has entered into a partnership to develop a 12.2-acre plot in the Panchpakhadi area of Thane. This venture aims to rehabilitate a large slum area with a development potential exceeding 3.12 million square feet.
Initially, the project was led by Jagdale Infrastructure, which secured a letter of intent from the Slum Rehabilitation Authority in 2022. Now, Jagdale Infrastructure is collaborating with L&T Realty to advance this project. Under the agreement terms, L&T Realty will take the lead developer role, earning a 69% share of the project's profits, while Jagdale Infrastructure will receive the remaining 31%. The project, which encompasses over 20 slum pockets, is anticipated to be completed within five years.
According to documents accessed via CRE Matrix, L&T Realty's profit share from the project is estimated to be around INR 698 crore, whereas Jagdale Infrastructure is projected to earn approximately INR 303 crore. The joint development agreement has been executed by L&T Realty through its subsidiary, L&T Parel Project, with a stamp duty payment of over INR 34.88 crore for the transaction registration on May 7.
The land in question is owned by the government of Maharashtra and was designated as a slum rehabilitation area under the Maharashtra Slum Area (Improvement, Clearance & Development) Act, 1971, as per a notification in October 2016. This land has been encroached upon and occupied by slum dwellers who have formed over 20 slum societies. The rehabilitation component of the project, which will provide housing for these slum dwellers, is estimated to cover more than 1.2 million square feet.
L&T Realty is responsible for the design, development, construction, completion, marketing, branding, and sale of the project's free-sale component. The floor space index required for the free-sale buildings will be generated through a proportionate rehab component. Besides handling the free-sale buildings, L&T Realty will also supervise the partner's duties, which include obtaining approvals and constructing the rehabilitation component.
Joint development and redevelopment projects are crucial in many property markets, especially with rising land prices and diminishing availability of vacant land in major urban centres. As cities grow and space becomes more limited, such projects offer innovative solutions to optimise land use, revitalise existing properties, and make efficient use of limited space.
These initiatives play a significant role in maintaining the growth and vibrancy of urban property markets, making them essential in the current real estate landscape. By addressing the challenges of urban expansion and space scarcity, joint development and redevelopment projects contribute to the sustainable development and dynamic nature of modern cities.
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