JSW, Orbit sign pact to develop Parel property

The Rs 360 crore deal is for a 35-storey office building.

Sajjan Jindal-promoted JSW Steel has entered into a Rs 360 crore deal with realty developer Orbit Corporation to build a 35-storeyed office building in Lower Parel in Mumbai. According to the deal, Orbit Corporation will construct the building and hand it over to JSW. The land belongs to Orbit.

Seshagiri Rao, director-finance, JSW said: "The building would house its own group companies." Branded JSW House, the building is being promoted as one of Hafeez Contractor's signature creations in chrome, glass and steel.

Rao said three floors would be used by Contractor. The Orbit Corporation website says that the building is designed to cater to Fortune 500 companies and big business houses operating in India, with each office comprising five floors, according to the plan.

The company is about to clinch a deal to sell its 2.5 acre Kalina property for nearly Rs 800 crore. The developer bought the property from Gujarat Ambuja Cement for Rs 330 crore. Orbit will sell the land along with the commercial property developed on the plot.

The company is planning to sell the property at Rs 25,000 to Rs 30,000 per sq feet, amounting to total valuation of Rs 900 crore. The project is expected to be over within 22 months.At present, Mumbai is the only metro facing short supply of office space, according to international property consultant DTZ.

While 6.4 million sq ft office space was absorbed in Mumbai in 2006, it is expected to absorb 7.5 million sq ft office space in 2007, as against the supply of 6.9 million sq ft this year, resulting in a supply-demand gap of 0.6 million sq ft, DTZ said.