Unitech in 97-acre Mumbai slum development project.
Unitech Ltd, Indiaâ€™s second-most valued real estate company with a market capitalisation of Rs 67,600 crore, is developing 97 acres of slums near the Vakola flyover on the Western Express Highway.
The project, which is close to the Santa Cruz railway station on the east, is estimated to cost Rs 1,900 crore, and will involve the rehabilitation of 20,000 families.
Unitech has joined hands with Pune-based developer Rohan Group for the project. Sanjay Chandra, managing director of Unitech, confirmed the development to DNA Money, but did not divulge further.
Once the families are rehabilitated, Unitech and Rohan Group will develop the land which will have a final saleable area of 80 lakh sq ft.
The cost of construction is around Rs 2,379 per sq foot, sources said.
Citigroup Global Markets analysts Ashish Jagnani, Aditya Narain and Karishma Solanki estimate the cost of land to be just Rs 2,500 per sq foot as it was acquired under the slum rehabilitation scheme.The rate for commercial property in the area is around Rs 25,000 per sq foot for A-grade projects, a local broker said. (Profit margin of 20,000 per sq ft, for a total project area of 80 lakh sq ft)
Jagnani, Narain and Solanki, in a report to clients on February 14, said the rehabilitation process for slum dwellers is ongoing with 30 of 97 acres of land cleared and the construction of rehabilitation already on.
A source close to the development said Unitechâ€™s decision to construct commercial space made more sense since the valuations are better due to the locationâ€™s proximity to the Bandra-Kurla Complex, Indiaâ€™s most expensive commercial area.
Cushman & Wakefield, international property consultant, said Mumbai is the worldâ€™s fourth-most expensive location for office occupation.
In the report titled â€˜Office Space across the World 2008,â€™ the firm said Mumbai is expensive than Paris, New York, Singapore and Dubai.
Meantime, the Citigroup report said Unitech is aggressively buying more land in Chennai and Hyderabad.
The company has picked up 29% stake in a 70-acre township in Perambur, Chennai, with the investment routed through its 50:50 venture with Arihant Foundation.
The company plans to develop 5,000 apartments, a retail mall, hotels and a hospital in the project.
In Hyderabad, Unitech has acquired 350 acres from the government through a tender process at a cost of Rs 60 lakh per acre. The realtor plans to develop a township here.
In Kolkata, Unitech has added two large projects. It is developing a township measuring 390-acre project near Howrah.
â€œIt has also picked up a 75% stake in the 6-acre prime property of Royal Calcutta Turf Club to develop luxury apartments and a premium hotel/service apartment,â€