DLF sells Mumbai land for Rs 2,700 cr

In a big-ticket land deal, realty major DLF has sold 17 acres of prime land in Mumbai to Lodha Developers for about Rs 2,700 crore, nearly four times higher than the price at which the company had bought this parcel seven years ago in 2005.

DLF had bought the land from National Textile Corporation for Rs 703 crore. The company decided to sell this piece of land as part of the strategy to exit from non-core business.

"Lodha Developers has entered into a binding agreement to acquire DLF's wholly-owned subsidiary Jwala Real Estate, which is the owner of the strategic 17-acre Mumbai textile mill property at Worli," Lodha said in a statement.

"The acquisition is for a consideration of Rs 1,200 crore for both equity and debentures of the company. In addition, Lodha is also expected to take over about Rs 1,500 crores of liabilities that Jwala has incurred for the development since it purchased the property from NTC in 2005," it added.

The valuation of DLF's land is lower when compared with Indiabulls' deal in 2010 for 8.39 acre of NTC land for Rs 1,580 crore.

The acquisition is 3-4 times cheaper than deals recently done by other real estate players. At a cost of Rs 5,000 per sq ft, this land acquisition gives Lodha significant competitive advantage to build a mixed-use development over 5 million sq ft at the prime location of Worli," Lodha said.

With this current deal, DLF has raised nearly Rs 8,000 crore from sale of non-core-assets (hotel plots and IT SEZs/Parks) in the last couple of years. The divestment proceeds are largely utilised to reduce net debt, which stood at Rs 22,680 crore as on June 30.

DLF, the country's largest realty firm, has also put on block two other major non-core assets -- luxury hotel business Amanresorts and wind energy -- and expects about Rs 3,000 crore from these two deals.

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