India Inc makes gains from land sale
Mumbai has seen three quick, mega land deals. The deals are Oberoi Realty buying Tata Steel’s Borivali land for Rs. 1,155 crore, Tata Housing buying land from KEC International at Rs. 214 crore and Clariant Chemicals selling its land in Thane to Lodha Developers for around Rs.1,154 crore. Rohit Poddar, Managing Director of Mumbai-based Poddar Developers points out that this has resulted for very good gains for the sellers.
Reliance Industries sold 2.5 acres at the Bandra-Kurla Complex in 2010 to Wadhwa Group for nearly Rs. 1,000 crore. The land was bought for Rs.60 crore in 2006.
In Bangalore, the Malleswaram-Rajaji Nagar belt and Yeshwantpur and Bellary Road are likely to see some transactions.
Kalapana Murthy, Associate Director, Residential Services, Cushman & Wakefield, a real estate advisory points out that last couple of years have seen many land deals on the outskirts of metros and tier-2 cities.
The sale of land provides gains that can be used by companies for their businesses. For example, DLF used the Rs.2,700 crore it got in 2013 selling land to Lodha Group to decrease its debt.
Usually, lands owned by corporate attract premium as the lands do not have ownership issues.
Berinder Sahni, Director, Unicus Advisors, a Mumbai-based real-estate advisory, points out that 35 per cent of Mumbai land is locked in slums, making redevelopment a long process. Shreekant P Shastry, Vice-President, Business, Ozonegroup informs that the new Land Acquisition Act will increase the price of land and also the cost of aggregation. This will make such corporate land even more attractive.
Source: Business Line
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