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    Sunteck Realty acquires 110 acres land parcel at Pen-Khopoli near Mumbai

    Synopsis

    The land parcel located close to Pen city with direct access to Pen-Khopoli main road has a total development potential of around 5 million sq ft. The company has entered into a revenue share pact with the landowner.

    SunteckAgencies
    While land prices and deal terms are yet to turn very attractive, industry experts believe with no support to smaller developers in terms of interest moratorium from banks this year, unlike the relief offered last year, acquisition opportunities could be strong over the next 12-24 months.
    Realty developer Sunteck Realty has acquired a 110-acre river front land parcel at Pen-Khopoli Road near Mumbai through the asset-light strategy of joint development agreement. With this, the company is planning to foray into plotted and bungalow developments.

    The land parcel located close to Pen city with direct access to Pen-Khopoli main road has a total development potential of around 5 million sq ft. The company has entered into a revenue share pact with the landowner.

    The project to be developed in four phases in around seven years is estimated to have revenue potential of over Rs 2,500 crore. With most approvals already in place, the company is planning to launch the first phase of the project in the next 6-9 months.

    This is Sunteck Realty’s fifth such acquisition in the last 18 months, helping strengthen its presence in the Mumbai Metropolitan Region (MMR) market. With the addition of over 23 million sq ft to its portfolio, the developer is one of the largest acquirers of projects during this period.

    “We continue to make astute acquisitions and value-accretive diversifications within the housing real estate market, giving credence to the outlook that the industry is consolidating behind branded, financially strong developers. With the current project offering of a luxurious, larger second home for those yearning to be away from the hustles and bustles of the city, Sunteck is now present across the full value spectrum for our customers,” said Kamal Khetan, Chairman, Sunteck Realty.

    Some of the recent acquisitions through asset light joint development model include a 50-acre land parcel at Shahad in Kalyan with potential to develop 10 million sq ft of integrated residential township with a revenue generation of around Rs 9,000 crore. It has also added a 50-acre sea-view plot in Vasai (West) with a development potential of around 4.5 million sq ft and a revenue potential of around Rs 5,000 crore.

    The company has also picked up a large development of 2.6 million sq ft at Vasind and a waterfront luxury residences project at Borivali (West) with a revenue potential of around Rs 1,800 crore. This new acquisition at Pen is expected to add around 5 million sq ft of development potential to the company’s existing portfolio.

    The ongoing consolidation in the real estate sector has accelerated due to the outbreak of Covid19 pandemic. Large established and listed realty developers are gaining more market share in terms of sales and liquidity as homebuyers are relying more on developers’ execution track record and sound financial position to take the project to conclusion.

    With several infrastructure initiatives aimed at improving connectivity, many established realty developers have been venturing into the peripheral areas of Mumbai region.

    Over the last few quarters, peripheral locations of big cities have been witnessing better momentum in terms of residential demand and sales too as homebuyers are increasingly looking for bigger homes in gated projects with large layouts in the backdrop of Covid19 pandemic.

    Top real estate developers are expected to double their sales over the next 3-4 years driven by robust demand, increasing affordability and industry consolidation, CLSA said in a recent report on India’s property industry.

    With renewed business confidence, realty developers are also seeking to ramp up new project acquisitions.

    While land prices and deal terms are yet to turn very attractive, industry experts believe with no support to smaller developers in terms of interest moratorium from banks this year, unlike the relief offered last year, acquisition opportunities could be strong over the next 12-24 months.


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