Kotak Realty Group, the private equity arm of Kotak Mahindra Bank, is backing Mumbai-based real estate developer Sunteck Realty Ltd’s move to acquire approximately 16 acres of land in Goregaon West, Mumbai. The deal involves Sunteck Realty acquiring the land parcel for Rs 300 crore, with Kotak Private Equity pitching in with Rs 150 crore in the transaction.
Interestingly, Kotak’s realty group is increasing its bet on Sunteck Realty as it already holds 9.5 per cent stake in the listed parent through Kotak Alternate Opportunities India Fund. Kotak Realty Group has also invested Rs 100 crore in Sunteck’s Star Light Developers, which is developing a residential complex in Bandra.
The share price of Sunteck closed at Rs 371 a unit on Thursday, up 0.84 per cent after rising more than 3 per cent in intra-day trade.
The deal would further expand Sunteck’s presence in Goregaon West, where it already owns seven acres within a distance of 200m of the current acquisition. The project, proposed on 16 acres of land, will enable the company to develop approximately 4 million sq. ft. of multi-use development with a predominant share of residential development, in addition to commercial and community retail locations.
The land parcel is located just off the elevated link between SV Road and Western Expressway, which is under construction, and in close proximity to two major stations on the Western Line.
“This is yet another example of how Sunteck Realty has built out a portfolio of properties across Mumbai, with near-term cash flows through aggressive acquisitions in each down cycle of the property market. Along with our residential development in Bandra Kurla Complex, Goregaon has emerged as the next most valuable destination for the company with 23 acres in total for two projects, which would roughly involve 5-6 million sq. ft. of developable area,” said Kamal Khetan, CMD of Sunteck Realty.
“Sunteck has a total of 23 acres in Goregaon West, spread over two projects, which we believe has emerged as one the most desired locations in the western suburbs, given the proximity to world class malls, educational institutions, hospitals and commercial hubs in the city. We believe that with this acquisition, Sunteck Realty will now have a long-term play in this prominent suburb in the medium term, with the proposed multi-use developments in the immediate neighbourhood,” said Hari Krishna, director of Kotak Realty Fund.
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