Godrej Properties may bring other investors in joint Mumbai commercial project with Jet Airways

Godrej Properties, the real estate arm of the Godrej Group, may look at diluting part stake in its new commercial project on land owned by private carrier Jet Airways in Mumbai. The joint development project located at Bandra Kurla Complex was first announced in August 2011 but has been officially launched for sale now.

The project is a joint venture between Godrej Properties and Jet Airways, where the profits will be shared between both the companies in a 50-50 ratio. Of a total saleable area of 1.3 million square feet in Godrej BKC, 161,460 square feet of carpet area will be used by Jet Airways as its new headquarters. The construction of Godrej BKC has commenced and the project is expected to be complete in 2015.

Pirojsha Godrej, managing director and CEO of Godrej Properties, said “The market is weak at the moment but we believe that BKC will see capital appreciation in coming times and the economy is starting to turn around.”

Godrej Properties is looking at an out-right sale of office space at this point and it will look at leasing at the end of the project construction cycle. It is looking to sell at Rs 27,000-28,000 per square feet.

The company already has debt of close to Rs 750 crore for this project and its primary focus on the short term is to sell space and use the money as project finance. Divesting a stake in the project to raise money is a possibility and the management indicated it wants to do it once part of the project is sold.

This is the only commercial launch that the developer is undertaking at present. It has a projected a revenue generation of Rs 3,500-4,000 crore from this project. The construction and development cost of the project is close to Rs 2,000-2,500 crore.

It has hired Skidmore Owings and Merrill (SOM) as architects for the project and has tied up with L&T for project construction. The minimum office space size in the project will be from 5,000 square feet.

(Edited by Prem Udayabhanu)

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