L&T Realty has partnered with Valor Estate to develop a residential project in Bandra Reclamation, Mumbai, with an investment of over INR 8,500 crore. The project will cover 7.5 acres and feature 1.6 million square feet of luxury housing, including a planned 200-key hotel. Valor Estate will retain 20% of the revenue if sales are below INR 55,000 per square foot, with potential to increase to 27% if sales exceed INR 80,000. The development, delayed since 2006, aims to be completed in five to six years and includes rehabilitating 1,050 tenements by 2027-28.
L&T Realty, part of the well-known Larsen & Toubro group, has formed a partnership with Valor Estate, previously known as DB Realty, to develop a large real estate project in Mumbai. This collaboration involves a significant investment of over INR 8,500 crores for a residential project located on a 7.5-acre land parcel in Bandra Reclamation, a prime area of Bandra West. The plan includes constructing nearly 1.6 million square feet of luxury housing.
The history of this land dates back to 2006 when a consortium led by Om Metals received approval from the Maharashtra Housing and Area Development Authority (MHADA) for development. However, due to various delays and changes in ownership, it wasn't until now that concrete steps are being taken towards its development. Valor Estate's subsidiary had previously entered a contract to move forward with the project, which has now been revitalized through this partnership.
According to the terms of their agreement, L&T Realty will retain 80% of the revenue generated from the project, paying Valor a share of 20% if the average sale price remains below INR 55,000 per square foot based on RERA carpet area. If sales exceed INR 80,000 per square foot, Valor's share could rise to 27%. This structure incentivizes both parties to enhance the project's marketability.
A notable feature of this development is a planned luxury hotel, with around 200 keys. Valor Estate intends to keep a developed space of 2.75 lakh square feet for this hotel and is reportedly negotiating with an international hotel brand for a long-term operational agreement. If finalized, this hotel will be the second luxury establishment in Bandra West, following the well-known Taj Lands End.
Valor's immediate responsibilities include clearing the land and securing necessary approvals, all of which are expected to be completed within the next 12 to 18 months. Additionally, the company has committed to rehabilitating approximately 1,050 tenements by 2027-28. Upon commencement of work, the entire project is anticipated to be completed within five to six years.
This venture marks the second collaboration between L&T Realty and Valor Estate, having previously partnered on a INR 20,000-crore project in the Bandra-Kurla Complex (BKC). L&T Realty has been strategically leveraging such partnerships to unlock the potential of its land holdings in Mumbai, working with various developers like Prestige Estates Projects, Adani Realty, and Godrej Properties.
The trend of joint development in real estate is increasingly becoming essential, especially in urban centers like Mumbai, where land prices are soaring and available land is scarce. This approach not only facilitates better project execution but also addresses community needs, like rehabilitating low-income housing. As property markets continue to evolve, such collaborations are likely to play a vital role in shaping the skyline of Mumbai and meeting the growing demand for housing.
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