DLF, the largest realtor according to market capitalization, is back in the market to sell its Mumbai Mills Property located in Lower Parel, say sources close to development. But the valuation that DLF is seeking, casts a shadow over the proposed selloff, according to developers and consultants.
In December last year three international property consultants Jones Lang LaSalle India, Knight Frank India and CB Richard Ellis had made their pitches for the property’s mandate. DLF was to announce the mandate by January 15 this year, which finally did not happen.
A senior official of one of the consultancy said, “They met all the developers and heard their pitches but they are not interested to sell at less than Rs 3,000 crore($600 million). But it is impossible that any one will pay that amount because after the Maharashtra government’s regulation on floor space index, the FSI is now 1.2x as compared to 4 earlier.”
DLF had first sought valuation upwards of Rs 4,000 crore for the property which it had acquired in 2005 with an aggressive bid of Rs 702 crore from National Textile Mill (NTC) in an auction, in one of the largest realty deals till that time.
According to a senior industry executive who did not wish to be identified, “There are new bids coming for the parcel , one is a consortium of Vallabh Sheth and Pune based realtor Avinash Bhonsle and the other being from Ajay Piramal.”
Both parties are offering to cough up a little over Rs 2,000 crore with staggered payment options, sources said.
When contacted by VCCircle, DLF said it does not respond to market speculations. Vallabh Sheth could not be immediately contacted for a comment. Ajay Piramal Group spokesperson also responded that it does not comment on market speculation.
Analysts say as per their calculations, the land parcel available for development is close to 1.2 million square feet and the final selloff pricing could be in the range of Rs 1700-2200 crore. Even as it is in a Grade A location, due to oversupply in Lower Parel region it may be difficult for DLF to get more for the asset, they add.