Parsvnath Developers Signing Deal to Sell off BEST Land at Kurla for Rs 307 crore

Parsvnath Developers, the New Delhi-based realtor, is close to signing a deal with a local developer for its BEST land at Kurla for Rs 307 crore, sources involved with the deal said. Parsvnath had received development rights in 2007 for the land, which included constructing of a fully-equipped bus depot, staff housing and buildings for commercial utilisation. Sources said that Mumbai based Kanakia Spaces is a close contender for the tract of land in Kurla and the final closure of the deal would happen by March-end.
Property consultants Jones Lang LaSalle are advisors to the deal. Vishal Doshi, the spokesperson of Kanakia Spaces, did not deny the development. A source involved with the deal told DNA, “Parsvnath is now assigning the new entrant the development rights, but not the entire part for the BEST bus depot. Parsvnath had received a component of free-sale floor space index for the development which will go to the new player.” Parsvnath spokesperson did not deny the development and said they would not like to comment on it. It had plans to raise Rs 242 crore by the end of the quarter through the private equity route which hasn’t happened yet.
Parsvnath had signed a deal with private equity fund Yatra Capital and Saffron India Real Estate Fund I to invest in the BEST project on April 21, 2008. Repeated attempts to reach Saffron Asset advisors remained unsuccessful. Yatra Capital’s non-executive director, David Hunter, had told DNA last year, “I have read that Parsvnath has difficulty but that’s not our problem. We are reviewing the project so that we can look at correct timing of participation. It’s under review by Saffron. A minimal amount has gone for the project.”
Parsvnath was awarded the development rights for the land under a tender process for the 30,820 square metres in Kurla. Parsvnath’s subsidiary, Jarul Promoters and Developers, was undertaking the project. Parsvnath and Jarul had entered into agreements with Yatra Capital Ltd and SIREF I whereby the funds were to each hold a 15% equity stake in Jarul, on a fully diluted basis.
For the purpose of acquiring this stake, the funds were to make an investment of Rs 186 crore, thereby valuing the BEST project at Rs 620 crore. In August 2007 Parsvnath had bagged redevelopment project from BEST for Mahim bus terminus, with a developable area of 40,000 sq ft.
The company has submitted a letter for surrender and expects to receive Rs 75 crore from it. An analyst said Parsvnath does not have money to develop these projects and the deal value for the BEST project is coming at Rs 11,000 per square feet.