As per the latest reports, noted real estate developer Kanakia Group has entered into a MoU (memorandum of understanding) with the management of Indian Tube Mills and Metals (ITM) Industries Limited to purchase its plot in Mumbai that currently contains its factory and office. This would mean another record real estate deal in Mumbai’s property market.
The purchase is likely to be for around Rs. 363 crore according to reports. The Kanakia Group will be buying this plot at Vikhroli in Mumbai for either residential projects or mixed-use projects. The Kanakia Group is known for its luxury residential ventures and will be looking to maximize value creation from this 7 acre land parcel. Due diligence is reportedly ongoing for this big ticket deal and the land will have overall development potential touching 10-15 lakh sq. ft.
The Kanakia Group will reportedly purchase the SPV (special purpose vehicle) that is the holder of the land. This also includes shares of all the company’s shareholders. India Tube Mills had a net worth of approximately Rs. 8.69 crore as of the 31st of March, 2017 and revenues were around Rs. 18.59 lakh. The company has not been bidding for new orders and this will be on hold at present as per reports. The company was founded in the year 1948.
Real estate experts are positive about Mumbai’s revival over the last few months and highlight how big ticket land deals are also reviving the sector overall. Top real estate developers are looking out for plots for expanding their business with new projects. Market sentiments have already improved in Maharashtra overall with the implementation of RERA and GST along with other reforms. The market is steadily recovering from the impact of demonetization and all these policy changes and buyers are steadily coming back to the market. The Mumbai Metropolitan Region (MMR) witnessed good growth in real estate sales over the last few months as well as per reports.
The new Mumbai Development Plan will also be a shot in the arm for the city’s real estate sector while land prices are steady at present. With the development plan, new land parcels will be unlocked for development. Multiple new retail, residential and commercial projects will be coming up in Mumbai as a result. Previously, GSK Pharmaceuticals sold its land parcel at Thane to Oberoi Realty for a whopping Rs. 555 crore. Earlier in 2018, DLF Limited had a record deal in Gurgaon when it purchased a land parcel for Rs. 1, 496 crore. Godrej Properties has also purchased land of 14.8 acres near the Dwarka Expressway from BPTP Limited, the real estate firm although the selling amount has not been officially revealed yet.