DB Realty, the noted real estate developer is already holding discussions with fellow market player Rustomjee Group for creating a DMA (Development Management Agreement) for the DB Crown project in Mumbai. The project is located at Prabhadevi and spreads over 7 acres as per reports. The project comes with revenue potential of a whopping Rs. 5, 000 crore as per reports. The agreement will be a tripartite deal since DB Realty had already inked its agreement with the Thackersey family and Bhishma Realty who owned this formerly mill land.
This is the fourth time that DB Realty is exploring joint ventures for development. The company already has similar agreements in place for projects at Mahalaxmi and Marine Lines in South Mumbai and a project in Bandra. As per reports, the agreement should be finalized anytime soon. Rustomjee will take over the responsibility for all the remaining marketing, construction and permissions for this project which will come with approximately 1.8 million sq. ft. in saleable area.
DB Crown has already garnered project approvals such as height clearance and future approvals will be garnered by the Rustomjee Group. DB Realty had signed its agreement for development with the owners of the mill land back in the year 2009 and work had commenced post the same. DB Realty has already sold approximately 25% of this project which encompasses 3 towers of close to 70-storeys each. There are more than 700 projects on offer here. However, only 30% of the work has been executed ever since. The Rustomjee Group is expected to complete the remaining portion.
The project plan and layout are expected to remain unchanged. Rustomjee Group should get a portion of the realization from sales volumes. However, the exact percentages are still unknown. There could also be co-branding for this project as per reports. The project is expected to be completed over the next 3 years by the Rustomjee Group. Several real estate developers are keen to ink joint development agreements in a scenario where land prices remain sky-high in Mumbai, NCR, Bangalore and Pune among other markets.
The developer first enters an agreement with the landlord for joint development of the land parcel in exchange for either a revenue share in the project or a payment upfront.