Real estate developers Oberoi Realty and Kalpataru have emerged front runners in a race to acquire Tata Steel’s 25-acre plot in Mumbai.
The land, in the northern suburb of Borivali, is expected to fetch the Tatas about Rs 1,155 crore (Rs 11.55 billion), making it the biggest deal in the city this year.
At a floor space index of 4.7 million sq foot, the cost works out to Rs 2,455 per sq foot.
After including the payouts to the government, the deal would be at about Rs 4,000 per sq foot, according to a realty consultant.
FSI refers to permissible construction on a given plot of land.
“At Rs 1,155 crore, it will be a good deal, given that property rates are at around Rs 12,000-15,000 per sq ft,” said the consultant.
Tata Housing, Peninsula Land and software firm Tata Consultancy Services were among those in the previous round of bidding for the plot.
But now, the race had narrowed to Oberoi and Kalpataru, said sources in the know.
The winner was expected to build a premium residential tower on the plot, they added.
Senior executives at Oberoi and Kalpataru didn’t respond to text messages and calls. A mail sent to Tata Steel did not elicit any response.
Consultants said the fact that Oberoi had no debt on its books and Kalpataru had low debt helped the two in the slow realty market.
It is expected Mumbai will see a number of large-ticket deals this year.
Late last year, Dilipkumar Lakhi, a diamond merchant and the city’s highest individual taxpayer until a couple of years ago, bought Cadbury House, the India headquarters of Mondelez, for Rs 350 crore (Rs 3.5 billion).
The one-acre property, with 90,000 sq foot of saleable area, is on Peddar Road in Mumbai.
Recently, National Centre for Performing Arts, the cultural organisation set up by JRD Tata and Jamshed Bhabha, had put the iconic Bhabha Bungalow here on the block for a reserve price of Rs 257 crore (Rs 2.57 billion).
The US-based banking major Citibank plans to sell Citi Centre, its erstwhile headquarters in the tony Bandra-Kurla Complex in Mumbai.
The eight-storeyed building, with about 90,000 sq foot of space, was expected to fetch about Rs 300 crore (Rs 3 billion), as BKC commanded a price of about Rs 30,000 per sq foot, consultants said.
Image: A Tata Steel factory; Photograph: Reuters