Tata Strikes Unconventional Deal, Launches Project in Colombo
India’s Tata Housing launched a US$ 400 million mixed development project in Slave Island, Colombo this last week. Tata Housing is a wholly owned subsidiary of Tata sons and the real estate arm of the Tata Group.
The project is a major township rejuvenation initiative, which also aims to provide improved housing units for shanty dwellers to settle in. According to the agreement, 582 families and 100 shop owners displaced by the project will be provided housing. It will be implemented in collaboration with Urban Development Authority (UDA).
The deal involves handing over an 8-acre plot of land to UDA on a 99-year lease, free of charge; although typically, such deals are signed on a lease rental basis.
Three companies had submitted their bids in addition to Tata Housing. But the latter secured the deal solely on the basis of their high credentials, said UDA chairman, Nimal Perera.
The average value of the land stands at Rs 8 million, a figure quoted by an official of the Valuation Department to The Sunday Times. The total value of the 8-acre land, thus, comes up to Rs 10.3 billion and the minimum lease value could be estimated at Rs 5 million.
The mixed development project will also host 1.1 million sq ft of residential apartments, commercial space extending to 5,30,000 sq ft, 1,15,000 sq ft of retail space, and 150-room city hotel.
Source: The Sunday Times
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